The Colours We Bring to Life Annual Report 2012 the Colours We Bring to Life

The Colours We Bring to Life annual report 2012 The Colours We Bring to Life

In FY2012, ParkwayLife REIT (“PLife REIT”) continued to steadily enhance and grow its portfolio of healthcare properties in the region, catering to a broad spectrum of end users. Amidst the challenges of 2012, PLife REIT turned in a sterling performance and continued to give its best to all Unitholders.

Driven by its strategies of proactive asset management, selective and strategic acquisitions, and dynamic financial management, PLife REIT remains steadfast in its commitment towards achieving long-term sustainable growth and stable distributions for its Unitholders.

Contents

02 Corporate Profile Greening Realising 03 Trust Structure our pastures 19 Portfolio in Focus gOlden opportunities 51 Financial Review 25 Our Properties In the pink of health 53 Corporate Governance 05 Our Reach 67 Financial Contents 06 Financial Highlights Laying the 08 Significant Events yellow brick road 45 Our Growth Strategy Like well-polished silver 47 Investor Relations 10 Message to Unitholders 48 Market Review and Outlook 12 Board of Directors 16 Management Team

ParkwayLife REIT Annual Report FY2012

CORPORATE PROFILE

PLife REIT is one of Asia’s largest listed healthcare REITs. It invests in income-producing real estate and real estate-related assets used primarily for healthcare and healthcare-related purposes.

As at 31 December 2012, PLife REIT’s total portfolio size stands at 37 properties totaling approximately S$1.4 billion.

Mission Statement We aim to deliver regular and stable distributions and achieve long- term growth for our Unitholders.

02 Annual Report FY2012 ParkwayLife REIT

TRUST STRUCTURE Structure of PLife REIT

The following diagram illustrates the relationship between PLife REIT, the Manager, the Trustee and the Unitholders:

UNITHOLDERS

Holding of Units Distributions

Management Fee Acts on Behalf of and Other Fees Unitholders THE TRUSTEE THE MANAGER HSBC Institutional Parkway Trust Trust Services Management (Singapore) Limited Limited ParkwayLife Management Trustee’s Fee and Other Services REIT

Net Property Ownership Income/Dividends

THE PROPERTIES1

Note: 1 Refers to properties acquired by the Trust whether directly or indirectly held through the ownership of special purpose vehicles. In Japan, the ownership of the properties is held through the Tokumei Kumiai (“TK”) structure. 03 In the pink of health A healthy portfolio delivering a healthy performance Despite challenging market conditions, PLife REIT recorded a strong set of results for the year. DPU for 4Q 2012 once again reached a historical high and has grown 69.2% since listing. The success of its growth efforts bears testament to its strategy to bolster the strength of its property portfolio whilst effectively managing its finances. Annual Report FY2012 ParkwayLife REIT

OUR REACH Fortifying Long-Term Growth and Sustainability

PLife REIT continued to progress steadily in 2012 through a multi-pronged approach of focusing on deploying prudent financial management strategies, whilst seeking organic and inorganic growth opportunities in both new and established markets. Over the year, PLife REIT acquired three Japan nursing home properties. It also made its first foray into Malaysia where it acquired strata-titled units/lots at Gleneagles Intan Medical Centre, Kuala Lumpur. These brought PLife REIT’s total portfolio to 37 healthcare properties valued at S$1.4 billion as at 31 December 2012.

With a diversified portfolio of high-quality and value-generating assets, PLife REIT has a keen eye on opportunities in growing healthcare markets in the region. It remains well-positioned as a key beneficiary and player in the Asia Pacific healthcare industry, for the long term.

Number of Properties Portfolio Number of Lessees 3 S$831.6 million 13 1 S$1.05 billion 8 2007 21

2008 S$1.15 billion 14

2009

2010 2011 2012

32 S$1.3 billion 18 33 S$1.38 billion 18 37 S$1.4 billion 21 05 ParkwayLife REIT Annual Report FY2012

FINANCIAL HIGHLIGHTS Steady Revenue and DPU Growth

PLife REIT continued to deliver steady income stream and growing Distribution Per Unit (“DPU”) during the year. FY2012 gross revenue and DPU grew by 7.2% and 7.5% year-on-year respectively, driven mainly by positive contribution from yield- accretive acquisitions made in the year, higher revenue from existing properties and interest cost savings as a result of prudent financial management.

Gross Revenue (S$ ’000)

FY2011 87,763 FY2012 FY2010 80,048 94,074 increased 7.2% FY2009 from FY2011 66,679 Net property income (S$ ’000)

FY2011 80,308 FY2012 FY2010 (S$ ’000) 86,426 Distributable income 73,625 increased 7.6% FY2011 FY2009 58,051 from FY2011 FY2012 61,983 FY2010 53,173 62,405 increased 7.5% FY2009 from FY2011 46,716 Distribution per unit (cents)1

FY2011 9.60 FY2012 FY2010 10.31 8.79 increased 7.5% FY2009 from FY2011 7.74

1 The number of units used to calculate the DPU comprise of units in issue and issuable as at 31 December of 2012, 2011, 2010 and 2009 respectively. 06 Annual Report FY2012 ParkwayLife REIT

Robust Financial Position

PLife REIT maintained its strong financial position in FY2012 with a series of prudent and pre-emptive capital management measures. In June, PLife REIT has completed the pre-emptive refinancing exercise to ensure it has no refinancing needs for its existing debt portfolio until FY2014. It has put in place a four-year S$80.0 million committed and unsecured Revolving Credit Facility (the “Facility”) to term out short-term loan facilities. Concurrently, the Facility has been utilised to pre-emptively purchase and cancel S$35.75 million of the outstanding S$50 million Floating Rate Notes (“FRN”) maturing in FY2013. The S$14.25 million of the FRN will be term out using the Facility when the FRN falls due in March 2013.

Attributed to its prudent financial risk management, PLife REIT has not been affected by the volatility in Japanese Yen exchange rate in FY2012. PLife REIT’s natural hedge strategy adopted since its first investment in Japan in 2008 to borrow loans denominated in Japanese Yen for its investments in Japan insulates it from exposure to foreign currency fluctuations. In 1Q 2012, in view of the increasingly volatile Japanese Yen exchange rate, PLife REIT has pro-actively extended its Japanese Yen denominated net income forward hedge for another five years till 1Q 2017. These proactive financial risk management measures have strengthened PLife REIT’s resiliency against foreign exchange risks, thereby enabling it to maintain a stable net asset value and distributable income to Unitholders.

As at 31 December 2012, PLife REIT’s gearing level stood at a healthy 32.9%. With a “BBB” investment grade credit rating from Fitch Ratings and further debt headroom of S$322.9 million before reaching gearing level of 45%, PLife REIT’s robust balance sheet strengthens its resilience against market uncertainties and provides it with access to attractively-priced funding to support its future growth.

Prudent Financial Risk Management

Ample Debt Headroom of Diversified S$322.9 Million Funding Before 45% Sources Gearing Level

Investment Grade Healthy Credit Rating Gearing of BBB of 32.9%

Low Effective Healthy Weighted All-in Debt Cost Average Term of 1.62% to Loan Maturity of 2.45 Years

07 ParkwayLife REIT Annual Report FY2012

SIGNIFICANT EVENTS

25 January 2013 Announced 4Q 2012 results: Gross revenue increased 5.0% year-on-year to S$23.99 million. Distributable income (net of amount retained for capital expenditure) increased 9.5% year-on-year to S$16.31 million. DPU of 2.69 cents for the period declared.

Achieved revaluation gains amounting to S$49.7 million.

Announced completion of its sixth Asset Enhancement Initiative (“AEI”) for Japan Portfolio involving the creation of a central kitchen at Sawayaka Obatake Nibankan to facilitate the catering and preparation of food for other K.K. Sawayaka Club facilities in the vicinity. Achieved ROI of 10.0% with gross rent for the unexpired lease term increasing by 5.04%. 8 November 2012 Announced 3Q 2012 results: Gross revenue increased 8.5% year-on-year to S$23.9 million. Distributable income (net of amount retained for capital expenditure) increased 7.1% year-on-year to S$15.57 million. DPU of 2.58 cents for the period declared. 2 August 2012 Announced 2Q 2012 results: Gross revenue increased 9.5% year-on-year to S$23.40 million. Distributable income (net of amount retained for capital expenditure) increased 4.9% year-on-year to S$15.01 million. DPU of 2.48 cents for the period declared.

Announced the 6.31% increase in Minimum Guaranteed Rent for sixth year of lease term commencing 23 August 2012 for Singapore Hospital Properties, under the CPI+1% rental revision formula.

Announced the completed acquisition of strata-titled units/lots within Gleneagles Intan Medical Centre, Kuala Lumpur.

Announced the roll-out of its new “Refurbishment AEI” concept at Maison des Centenaire Ishizugawa to yield a 2.0% increase in gross rent for unexpired lease term and ROI of 18.5%. 25 June 2012 Completed the pre-emptive refinancing exercise to ensure PLife REIT has no refinancing needs for its existing debt portfolio until FY2014.

Put in place a four-year S$80.0 million committed and unsecured Revolving Credit Facility (the “Facility”) to term out short-term loan facilities.

Concurrently, the facility has been utilised to pre-emptively purchase and cancel S$35.75 million of the outstanding S$50.0 million Floating Rate Notes (“FRN”) maturing in FY2013. The remaining S$14.25 million of the FRN will be term out using the Facility when the FRN falls due in March 2013. 3 May 2012 Announced 1Q 2012 results: Gross revenue increased 6.0% year-on-year to S$22.78 million. Distributable income (net of amount retained for capital expenditure) increased 8.5% year-on-year to S$15.51 million. DPU of 2.56 cents for the period declared. 8 March 2012 Pro-actively extended its Japanese Yen denominated net income forward hedge for another five years till 1Q 2017, insulating PLife REIT from volatility in the Japanese Yen exchange rate and enabling it to maintain stable distributable income to Unitholders. 6 March 2012 Announced the completed acquisition of three Japan nursing homes, Sawayaka Parkside Shinkawa, Sawayaka Hirakatakan and Sawayaka Higashikagurakan.

08 Like well-polished SILVER Silver, an age characterised by wisdom, maturity and being well-grounded In 2012, PLife REIT continued to progress steadily through a multi-pronged approach: by focusing on deploying prudent financial management strategies, whilst seeking organic and inorganic growth opportunities in both new and established markets.

Over the years, the business and portfolio of PLife REIT have begun to flourish and mature. Like well-polished silver, the growth strategies and efforts invested have begun to sparkle with shining and sustainable returns. ParkwayLife REIT Annual Report FY2012

MESSAGE TO UNITHOLDERS Dear Unitholders,

As the business environment remains challenging in 2012 given the on- DPU going uncertainties in the global (cents) economy, PLife REIT stayed focus on delivering sustained growing 3.0 1 distributions for our Unitholders. +69.2% 2.69 2.7 2.58 2.562 2.47 2.48 2.40 2.38 2.36 2.37 2.4 2.25 2.07 2.09 Shield Amidst 2.1 2.05 1.84 1.89 1.89 1.91 Market Uncertainty 1.71 1.8 1.62 1.66 PLife REIT seeks to preserve its 1.59 valued resiliency and defensiveness 1.5 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q and through disciplined execution 2007 2008 2008 2008 2008 20092009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 of our growth strategies, PLife REIT continue to deliver steady returns in Note: 2012 with a registered DPU growth of 1 Accumulated DPU payout since IPO is 45.54 cents (inclusive of 3Q 2007 pro-rated payout). approximately 69.2% since IPO. 2 For FY2012, S$3 million amount available for distribution was retained for capital expenditure (S$0.75 million per quarter)

For the year, PLife REIT reported a year-on-year increase of 7.2% in gross revenue to sector participation in the elderly care industry will S$94.1 million and 7.6% increase in net property continue to bolster demand for quality senior care income to S$86.4 million. Distributable income for services and living facilities. Leveraging on our the financial year grew 7.5% to S$62.4 million with a strategic partnership approach, PLife REIT further corresponding increase in DPU to 10.31 cents. expanded our footprint in Japan with the acquisition of three more nursing homes in March 2012. With PLife REIT’s consistent returns are underpinned by its an enlarged nursing home portfolio of 32 properties inherent portfolio strengths. As at 31 December 2012, strategically located across Japan, PLife REIT is in a 97.8% of our leases have built-in rent review provision favorable position to benefit from the trend. with 90.0% enjoying downside revenue protection. Our properties are also secured with long-term As we seek to enhance the revenue diversity of master leases with a weighted average lease term PLife REIT, we remain discerning and prudent in to expiry (by gross revenue) of approximately 11.29 our acquisition strategy. Similar to our approach for years. With 67.0% of our total Portfolio pegged to CPI Japan market, we embarked on our maiden entry linked rent revision formulae, PLife REIT continues to into Malaysia in August 2012 with a small-sized be a key beneficiary of the rising inflationary trends. acquisition of strata-titled units/lots at Gleneagles Intan Medical Centre, Kuala Lumpur. This seed investment in Malaysia marks the beginning of Riding on Proven Growth Strategies our long term strategy of establishing a significant The robust demand for healthcare services and presence in the growing healthcare sector there. facilities in the region continues to present growth opportunities for PLife REIT to expand our footprint For the year, PLife REIT remains steadfast in the in the region. proactive asset management of our portfolio to unlock greater value for Unitholders. Leveraging on For Japan, the rapidly ageing population and the our past successes, we continue to embrace the government’s continued encouragement for private strategic collaborative asset enhancement initiative

10 Annual Report FY2012 ParkwayLife REIT

The natural hedge strategy we have adopted since our first acquisition in Japan in 2008 to match our assets and liabilities that are denominated in We believe that the long-term Japanese Yen has shielded us from the Japanese prospects of the regional healthcare Yen foreign currency volatility, providing stable net asset value. The year sees us further extending our industry will continue to be robust Japanese Yen-denominated net income hedge for due to the rising demand for better five years till 1Q2017, cushioning PLife REIT from the volatility in Japanese Yen. quality private healthcare services As at 31 December 2012, our gearing remains driven by the fast-ageing population. healthy at 32.9% with a low weighted average all-in cost of debt. The robust balance sheet with ample debt headroom, no near-term refinancing risks and a positive “BBB” investment grade credit rating has attested to PLife REIT’s stable fundamentals, enabling sustainability of distributions to its Unitholders.

Our Appreciation We wish to extend our appreciation to our Board Members, management and staff for your hard work (“AEI”) scheme to buttress PLife REIT’s organic and dedication and to our Unitholders, business growth in 2012. The year sees us completing the partners and lessees for your continual support. 5th and 6th AEIs for our Japan portfolio and the roll out of a new “Refurbishment AEI” concept, whereby While outlook of the global economy remains property refurbishment costs are being borne by uncertain, we believe that the long-term prospects PLife REIT in exchange for incremental rent from of the regional healthcare industry will continue to its Lessee. The Refurbishment AEI which serves to be robust due to the rising demand for better quality preserve the competitiveness of our property and private healthcare services driven by the fast-ageing revenue sustainability of our nursing home operator population. is one of our innovative asset management strategies to generate attractive organic returns for PLife REIT. Backed by solid fundamentals and sound strategies, favorable portfolio attributes and resilient growth of the healthcare industry in Asia Pacific region, we are Strengthened Foundation with Dynamic confident that PLife REIT is well positioned for future Financial and Capital Management growth. During the year, PLife REIT continues to strengthen our foundation through dynamic financial and capital management to generate greater value for our Lim Kok Hoong Unitholders. Following the pre-emptive refinancing of Chairman our short-term loan facilities and Floating Rate Notes in June 2012, PLife REIT has no refinancing needs Yong Yean Chau for our existing total debt portfolio until FY2014. Chief Executive Officer and Executive Director

1 Based on share price of S$2.15 as at 31 December 2012. 11 ParkwayLife REIT Annual Report FY2012

BOARD OF DIRECTORS

Mr. Lim Kok Hoong Independent Director and Chairman

Mr. Lim is an Independent Director on the Board of several public listed companies in Singapore.

Mr. Lim has over 32 years experience in public accountancy. He was a Senior Partner with Ernst & Young Singapore from 2002 to 2003 and prior to that was the Managing Partner of Arthur Andersen Singapore from 1990 to 2002. He also previously held the position of Regional Managing Partner, Asean, for Arthur Andersen during the period 2000 to 2002.

Mr. Lim graduated from the University of Western Australia in 1971 with a Bachelor of Commerce. He is a member of the Institute of Chartered Accountants in Australia and the Institute of Certified Public Accountants of Singapore.

Mr. Puah Tuan Soon Benson Independent Director and Chairman of the Remuneration Committee

Mr. Puah has been the Chief Executive Officer (CEO) of The Esplanade Co Ltd (TECL) since 1998. Concurrent to his position as CEO of TECL, Mr. Puah was also appointed as CEO of the National Arts Council (NAC) with effect from 1 August 2009. Prior to these appointments, he was the CEO of Temasia Health Pte Ltd, the international business and management arm of Health Corporation of Singapore (HCS), an entity linked to the Government of Singapore that invests and develops businesses in health services, from 1997 to 1998. From 1995 to 1997, Mr. Puah was the Director and Chief Executive of Sentosa Development Corporation (SDC), a government statutory board responsible for the development, management and promotion of Sentosa, Sentosa Cove and 11 off-shore islands. From 1982 to 1994, Mr. Puah worked in various senior positions in hotels managed by global hotel operators including Mandarin Oriental Hotel Group in Hong Kong and Singapore. Shangri-la’s Rasa Sentosa Resort in Singapore, Shangri-la Hotel Surabaya in Indonesia, Hilton International in Singapore amongst others.

Mr. Puah graduated from the University of Surrey, Guildford in the United Kingdom with a Bachelor of Science in Hotel, Catering & Tourism Administration.

Mr. Tan Bong Lin Independent Director and Chairman of the Audit Committee

Mr. Tan has over 28 years experience working in financial institutions. Between 1990 and 2007, he was with Citigroup Global Markets Singapore Pte Ltd and was its Managing Director from 1991 to 2007.

His responsibility included overseeing the Smith Barney brokerage and advisory business. Prior to his appointment in Citigroup Global Markets Singapore Pte Ltd, he held various positions in Drexel Burnham Lambert (S) Pte Ltd, including as a Dealer, an Operations Manager and an Assistant General Manager, from 1980 to 1990. Mr. Tan was a member of the Finance Committee at Singapore Broadcasting Authority from 1997 to 2002.

Mr. Tan graduated from the University of Singapore in 1980 with a Bachelor of Accountancy.

12 Annual Report FY2012 ParkwayLife REIT

Dr. Lim Cheok Peng Non-Executive Director

Dr. Lim has over 25 years international experience in the healthcare sector. He was the Managing Director of Parkway Holdings Limited (the Sponsor), an appointment which he has held since 2000 and became the Vice Chairman in 2009.

On 1 May 2011, Dr. Lim was appointed as Executive Director of IHH Healthcare Berhad (formerly known as Integrated Healthcare Holdings Berhad) and re- designated to Managing Director of IHH Healthcare Berhad in April 2012. He is also a Consultant Physician & Cardiologist in private practice in Singapore.

Dr. Lim is the Co-Chairman of Health & Life Science of the Singapore British Business Council and is a member of the Council for the Third Age of Ministry of Community Development, Youth & Sports. He was a member of Singapore Medical Council from 2005 to 2011 and was a board member of Republic Polytechnic from 2005 to 2009.

Dr. Lim graduated from the University of Singapore in 1972 with a Bachelor of Medicine and Bachelor of Surgery (MBBS). In 1976, he obtained a Master in Medicine (Internal Medicine) from the University of Singapore. Dr. Lim was elected to the membership from the Royal College of Physicians of the United Kingdom in 1977. In 1991, Dr. Lim obtained the Diploma of Fellowship from the Royal College of Physicians and Surgeons of Glasgow and Royal College of Physicians and Surgeons of Edinburgh and was admitted as a Fellow of the Academy of Medicine, Singapore (Cardiology) at the Academy of Medicine, Singapore in 2003.

Dr. Tan See Leng Non-Executive Director

Dr. Tan is the Group CEO and Managing Director of Parkway Pantai Limited.

Dr. Tan first joined Parkway Holdings Limited in September 2004 as Chief Operating Officer of Mount Elizabeth Hospital. He was subsequently appointed Senior Vice President, International Operations in November 2006 and was later seconded to Pantai Holdings Berhad as CEO of the Hospitals Division, a position he held till February 2008. In 2009, Dr. Tan held the position of Executive Vice President of Singapore and Malaysia Operations at Parkway till April 2010 when he was appointed as Managing Director and CEO of Parkway Holdings Limited. Due to the restructuring of the Group, Dr. Tan became the Group CEO and Managing Director of Parkway Pantai Limited in May 2011. On 5 April 2012, Dr. Tan was appointed as Executive Director of IHH Healthcare Berhad (formerly known as Integrated Healthcare Holdings Berhad).

Prior to joining Parkway and Pantai, Dr. Tan founded a private primary healthcare group in Singapore. Dr. Tan has over 20 years of experience in the healthcare industry and is an active member of various medical committees in Singapore. This includes serving as an Appointed Member on the Ministry of Health’s Steering Committee for Primary Healthcare for the country for 2010 in 2003.

In 2007, Dr. Tan successfully organized the 18th Wonca World Conference in Singapore which netted the College of Family Physicians Singapore (CFPS) a

13 ParkwayLife REIT Annual Report FY2012

BOARD OF DIRECTORS

net profit of more than US$1.3 million. In recognition of his contribution to CFPS, Dr. Tan was awarded the prestigious Albert and Mary Lim award – the highest accolade, awarded for contribution and services rendered to the College and to the discipline of Family Medicine.

In 2008, Dr. Tan was appointed Chairman to the Board of Directors and to the Board of Trustees CFPS Holdings Pte Ltd. On 25 June 2011, Dr. Tan was elected as Vice President of CFPS.

In 2011, Dr. Tan was appointed as Adjunct Assistant Professor in the Duke-NUS Graduate Medical School Singapore.

In 2012, Dr. Tan was appointed a Council Member of the Singapore-Guangdong Collaboration Council to deepen Singapore’s engagement with Guangdong and benefit Singapore businesses through joint exploration of new opportunities in the province.

Dr. Tan holds an MBBS as well as a Master of Medicine (Family Medicine) from the National University of Singapore. In addition, Dr. Tan also has a Master of Business Administration from the University of Chicago Booth School of Business.

Mr. Ahmad Shahizam Bin Mohd Shariff Non-Executive Director

Mr. Ahmad, 42, is Parkway Pantai Limited’s Executive Director. He heads Parkway’s Corporate Services functions and is responsible for leading all corporate functions of the Group including Human Resources, Information Technology, Legal & Risk Management and Corporate Communications.

Prior to joining Parkway, he was Director, Investments of Khazanah Nasional Berhad where he was responsible for investments in the healthcare and power sectors. He first joined Khazanah Nasional Berhad in 2004 and as Director, Communications & External Relations Unit, he was Khazanah’s spokesperson and was also responsible for Khazanah’s communications strategy for media, investor, government and stakeholder relations. He graduated from the London School of Economics and Political Science with a Bachelor of Laws and he also holds a Master in Public Administration from Harvard University.

Mr. Ahmad has been a Board member of Parkway since 2008 and is also a Board member of Pantai Holdings Berhad and IMU Health Sdn Bhd.

Mr. Tan See Haw Non-Executive Director

Mr. Tan joined Parkway Holdings Limited (the Sponsor) as the Group Chief Financial Officer (“CFO”) on 5 January 2009 and was appointed the Group CFO of Parkway Pantai Limited upon its acquisition of both the Sponsor and Pantai Irama Ventures Sdn Bhd on 28 April 2011. On 10 January 2013, Mr. Tan was appointed as Chief Financial Officer of IHH Healthcare Berhad.

Prior to his appointment with the Sponsor, Mr. Tan was the Vice President of IT and Supply Chain of Unisem (M) Bhd, overseeing these functions for all of Unisem’s worldwide operations. Concurrently, he was also the CFO of Advanced

14 Annual Report FY2012 ParkwayLife REIT

Interconnect Technologies (AIT), a position which he held since 1999. As the CFO of AIT, Mr. Tan was head of the Group Finance and Purchasing globally. Before joining AIT, Mr. Tan held key regional finance positions for major corporations such as Asia-Pacific Breweries Ltd (Director of Group Finance) and Pepsi-Cola International (Asia Division Financial Controller). He also held finance and audit positions at NL Petroleum (Far East) Pte Ltd and Price Waterhouse & Co.

Mr. Tan graduated with a Bachelor Degree in Accountancy from the former Singapore University in 1980. He is also a Fellow of Institute of Certified Public Accountants of Singapore.

Mr. Yong Yean Chau Chief Executive Officer and Executive Director

Mr. Yong is the CEO and Executive Director of Parkway Trust Management Limited, the manager of Parkway Life REIT. He joined Parkway Trust Management Limited as CFO in February 2008 and was promoted to CEO in December 2008. Mr. Yong was previously the CFO of the Singapore Tourism Board, overseeing its finance and corporate services functions. Prior to that, he was the CFOof Ascendas Pte Ltd (Ascendas). During his tenure with Ascendas, he was seconded to China-Singapore Suzhou Development Ltd and Singapore-Suzhou Township Development Pte Ltd as the CFO, in Suzhou, China. Before joining Ascendas, Mr. Yong held other finance and audit positions in Beijing ISS International School, Housing and Development Board and Arthur Andersen.

Mr. Yong graduated from the National University of Singapore in 1992 with a Bachelor of Accountancy (Honours) and was conferred a Fellow Certified Public Accountant (FCPA) by the Institute of Certified Public Accountants of Singapore. He has also completed the Advanced Management Programme with Harvard Business School.

15 ParkwayLife REIT Annual Report FY2012

MANAGEMENT TEAM

From left Mr. Yong Yean Chau Mr. Loo Hock Leong Mr. Tan Seak Sze

From left Ms. Liu Chen Yin Ms. Teo Chin Ping Ms. Ang Lay Kheng

Mr. Yong Yean Chau Chief Executive Officer and Executive Director

(Please see biography under Board of Directors)

Mr. Loo Hock Leong Chief Financial Officer

Mr. Loo brings with him 19 years of extensive banking and corporate experience. He was previously the Senior Vice President, Corporate Advisory of Global Financial Markets with DBS Bank Ltd. He has provided advisory services on corporate treasury management to large corporations in area of corporate finance and merger & acquisition. He has extensive experience in financial structuring of interest rate and foreign exchange risk management solutions for these clients.

Mr. Loo graduated from the National University of Singapore with a Bachelor of Electrical Engineering (Hons) degree in 1995. In 2000, he obtained a Masters of Applied Finance from the Macquarie University with three distinguished awards: Best Overall Performance, Best in Derivatives Valuation and Best in Legal & Tax Risk in Finance.

Mr. Tan Seak Sze Senior Vice President, Investment

Mr. Tan was the Vice President, Investment of CapitaLand Group before joining Parkway Life REIT. He was responsible for the investment activities of CapitaLand’s retail business unit in India. Prior to this, he worked for two years in the Philippines as the Chief Operating Officer of a business process outsourcing firm. In 2004, he was seconded by Ascendas Pte Ltd (Ascendas) to the position of Chief Executive Officer of L&T Infocity-Ascendas Ltd, a developer company of IT complexes in Hyderabad, India. In 2003, he was the Finance Manager of Ascendas-MGM Funds Management Limited. Prior to this, he was Assistant Vice President, Corporate Finance of Ascendas and was responsible for the Ascendas Group’s domestic and international financing programmes including cross border financing and strategically managed the group’s capital structure.

From 1994 to 2000, Mr. Tan was with JTC International Pte Ltd where he joined as a Business Development Officer and eventually assumed the post of Senior Manager, Investment and Planning. During this period, Mr. Tan accumulated regional work experience in areas ranging from project evaluation, financial modeling, financial structuring, marketing with extensive exposure to strategic planning. After graduation, Mr. Tan was with the Corporate Banking Department (Real Estate Division) of DBS Bank Ltd from 1991 to 1994. He was responsible for the marketing and credit assessment of a portfolio of the bank’s real estate corporate clients.

Mr. Tan holds a Master of Business Administration with High Honours from the University of Chicago, Graduate School of Business and a Bachelor of Arts with Honours in Accounting and Law from the University of Kent at Canterbury, United Kingdom.

16 Annual Report FY2012 ParkwayLife REIT

Ms. Liu Chen Yin Vice President, Asset Management

Ms. Liu brings with her 13 years of experience in the areas of valuation, marketing and leasing, investment and asset management.

Prior to her appointment in the Manager, she was with CapitaCommercial Trust Management Limited, the manager of CapitaCommercial Trust (CCT). She was involved in the sourcing and evaluating of potential investment opportunities as well as the development and implementation of asset management strategies and plans for CCT’s asset portfolio.

From 2002 to 2006, she was with City Developments Limited where she was responsible for the marketing and leasing of its office portfolio. From 1999 to 2002, she was a Senior Valuer with CKS Property Consultants Pte Ltd.

Ms. Liu graduated from National University of Singapore in 1999 with a Bachelor of Science (Honours) degree in Real Estate. She is also a registered licensed appraiser.

Ms. Teo Chin Ping Assistant Vice President, Asset Management

Ms. Teo brings with her 17 years experience in the field of architecture design, master planning, management and administration of projects in Singapore and overseas.

Prior to her current appointment, Ms. Teo was a project manager with Thomson International Health Services Pte Ltd (TIHS). While at TIHS, Ms. Teo worked on the International Women and Children Hospital and a Fertility Centre proposal in Vietnam. She also worked with Singapore General Hospital on an addition and alteration project for the Department of Emergency Medicine, as well as design and renovation for various departments within the hospital.

Ms. Teo was stationed in Kunming, China, briefly while working on a hospital project there; she also has experience with some school and residential projects in Singapore for PMLink Pte Ltd. She was with ACP Construction Pte Ltd prior to her role with PMLink Pte Ltd, where she worked on Biopolis II. Ms. Teo joined ST Architects & Engineers Pte Ltd after graduation, where she worked on master planning in Jordan, an international airport proposal in Myanmar, factories in China, office towers, conventional and automated warehouses as well as the Changi Naval Base in Singapore.

Ms. Teo graduated from University of Tasmania, Australia in 1995 with a Bachelor of Architecture. She is also a Qualified Architect with the Board of Architects, Singapore.

Ms. Ang Lay Kheng Assistant Vice President, Corporate Finance

Ms. Ang brings with her 12 years experience in financial and management reporting, taxation, corporate finance, treasury, financial risk management and compliance. Prior to her appointment in the Manager, she was an audit manager with PricewaterhouseCoopers (“PwC”). While at PwC, Ms. Ang had worked on the audit of several Singapore listed corporations and multinational companies, mainly in the real estate sector. Prior to this, she was with KPMG and has worked on the audits of manufacturing and trading companies, restructured hospitals in Singapore and financial institutions. Her experience includes financial and management reporting, consolidation, taxation, compliance with statutory requirements, appraising effectiveness of internal controls, treasury, corporate advisory and financial risk management.

Ms. Ang graduated from Nanyang Technological University in 2000 with a Bachelor of Accountancy, minor in Banking and Finance. She is also a Chartered Financial Analyst.

17 Greening our pastures Employing proactive and innovative asset management strategy PLife REIT ensures that its portfolio of assets continues to generate healthy organic growth in the long run. Annual Report FY2012 ParkwayLife REIT

PORTFOLIO IN FOCUS

PLife REIT’s portfolio of 37 quality healthcare assets continues to provide steady returns in a sterling display of defensiveness, augmented by favourably structured rental leases.

Portfolio Summary (As at 31 December 2012)

Asset Type Location Properties Lessee (s)

Hospitals and Singapore 1. Mount Elizabeth Hospital Parkway Hospitals Singapore medical centres 2. Gleneagles Hospital Pte. Ltd. 3. Parkway East Hospital

Malaysia 4. Gleneagles Intan Medical Centre, Gleneagles Hospital (Kuala Kuala Lumpur Lumpur) Sdn. Bhd. CIMB Bank Berhad Indocape Consolidated Sdn. Bhd.

Nursing homes Japan 5. Bon Sejour Shin-Yamashita Benesse Style Care Co., Ltd1 6. Bon Sejour Ibaraki

7. Palmary Inn Akashi Asset Co., Ltd 8. Palmary Inn Suma

9. Senior Chonaikai Makuhari Kan Riei Co., Ltd 10. Iyashi no Takatsuki Kan

11. Himawari Home Kamakura Chojukaigo Center, Inc

12. Smiling Home Medis Musashi Urawa Medis Corporation 13. Smiling Home Medis Koshigaya Gamo

14. Fureai no sono Nerima Takanodai Y.K. Shonan Fureai no Sono 15. Fureai no Sono Musashi Nakahara

16. Amille Nakasyo Message Co., Ltd; Shakai Fukushi Houjin Keiyu-Kai

17. Hapine Fukuoka Noke Care Link Co., Ltd

18. Fiore Senior Residence Hirakata K.K. Vivac

19. Supercourt Kadoma City Estate Co., Ltd 20. Supercourt Takaishi-Hagoromo

21. Maison des Centenaire Ishizugawa Miyako Kenkokai Medical 22. Maison des Centenaire Haruki Corporation

23. Sawayaka Obatake Ichibankan K.K. Sawayaka Club 24. Sawayaka Obatake Nibankan 25. Sawayaka Shinmojikan 26. Sawayaka Nokatakan 27. Sawayaka Nogatakan 28. Sawayaka Sakurakan 29. Sawayaka Fukufukukan 30. Sawayaka Higashikagurakan 31. Sawayaka Parkside Shinkawa 32. Sawayaka Hirakatakan

33. As Heim Nakaurawa As Partners Co., Ltd

34. Legato Higashi-Sumiyoshi Planning Care Co. Ltd 35. Legato Katano

36. Royal Residence Gotenyama Shakai Fukuishi Sougou Kenkyujo

Pharmaceutical product 37. P-Life Matsudo Nippon Express Co., Ltd distributing and manufacturing facility

1 On 1 April 2012, Benesse Style Care Co., Ltd merged as the surviving company with Bon Sejour Corporation.

19 ParkwayLife REIT Annual Report FY2012

Portfolio IN FOCUS

Key Portfolio Statistics 1

Appraised value S$1.43 billion

Net lettable area 2 224,743 sqm Weighted average lease term to expiry (by gross revenue) 11.29 years

Number of lessees 21 % of Leases (by NLA) with rent review provision 97.8%

Downside protection (gross revenue) 90.0%

20 Portfolio Diversification 3

Top 5 Tenants

Tenants Parkway Hospitals Singapore Pte. Ltd. 63.9% K.K. Sawayaka Club 10.0% Riei Co., Ltd 3.1% By Geography Benesse Style Care Co., Ltd 2.9% K.K. Asset 2.7% Malaysia

Japan Singapore 0.4%

By Asset Class 63.9% 35.7% Nursing Homes 33%

Hospitals and Medical Centres 64%

Pharmaceutical Product Distributing and Manufacturing Facility 3%

1 As at 31 December 2012. 2 Based on aggregate strata areas for Mount Elizabeth Hospital, Gleneagles Hospital and Gleneagles Intan Medical Centre, Kuala Lumpur, gross floor areas for Parkway East Hospital, and net lettable areas for 33 Japan properties. 3 Based on Gross Revenue as at 31 December 2012. 21 ParkwayLife REIT Annual Report FY2012

Portfolio IN FOCUS

Singapore Our Presence in Asia Pacific PLife REIT has a portfolio of three strategically-located world-class private hospitals, namely Mount Elizabeth Hospital, Gleneagles Hospital and Parkway East Hospital valued at approximately S$980.4 million1.

Distinct features of our Singapore Hospital Properties

Long-term Master Leases with Parkway Hospitals Singapore Pte. Ltd. • 15 + 15 years with effect from 23 August 2007 • cf. average lease period of three to five years 2 3 • 100% committed occupancy 1 Triple Net Lease Arrangement • Does not bear these costs: property tax, property insurance2, property operating expenses 1 Mount Elizabeth Hospital • Minimal exposure to escalating operating expenses 2 Gleneagles Hospital 3 Parkway East Hospital Favourable Lease Structure • CPI + 1% rent review formula for Singapore Hospital Properties guarantees minimum 1% rental growth annually (CPI deemed as zero if it is negative)

Malaysia In August 2012, we made our first foray into Malaysia with the acquisition of strata-titled units/lots at Gleneagles Intan Medical Centre, Kuala Lumpur (“GMCKL Portfolio”).3

Gleneagles Intan Medical Centre, Kuala Lumpur is strategically located next to Gleneagles Hospital (Kuala Lumpur) and the medical precinct is well known in Kuala 1 Lumpur for providing quality medical care. The GMCKL Portfolio constitutes 23.1% of the total share value of GMCKL. It enjoys close to full occupancy with a good tenancy profile4. With Malaysia being one of the growth markets identified to enhance our portfolio diversity, we will continue to be on the lookout for acquisition opportunities to increase our presence there.

1. Gleneagles Intan Medical Centre, Kuala Lumpur

1 Based on appraised values as at 31 December 2012. 2 Except Property Damage Insurance for Parkway East Hospital. 3 Comprising three ground floor units, three medical consulting suites on the 2nd and 7th floor, entire 8th floor and 69 carpark lots. 4 Bulk of strata area is leased to a strong healthcare operator, Gleneagles Hospital (Kuala Lumpur) Sdn. Bhd. 22 Annual Report FY2012 ParkwayLife REIT

Japan Our Japan portfolio of 33 high-quality healthcare properties worth S$438.8 million1 comprises 1 pharmaceutical product distributing and manufacturing facility and 32 private nursing homes. PLife REIT’s nursing home properties are well-equipped, in good physical condition and are strategically located in residential districts in various prefectures of Japan. The facilities offer a wide range of nursing care services and are operated by experienced service and nursing staff, making them attractive retirement facilities.

Our nursing homes are managed by 16 quality operators, which diversifies tenant risk. Furthermore, we have secured long-term lease agreements and backup operator arrangements for the properties, offering protection to PLife REIT and ensuring certainty of distributions to PLife REIT’s Unitholders.

Distinct features of our Japan Properties

Favourable Lease Structure • Long-term lease structure with weighted average lease term to expiry of 14.322 years • “Up-only” Rental Review Provision for most of our nursing homes

Master Tenanted • Signifies 100% committed occupancy

1 Tokyo 6 Okayama Fureai no sono Nerima Takanodai Amille Nakasyo 2 Chiba 7 Hyogo P-Life Matsudo Palmary Inn Akashi Senior Chonaikai Makuhari Kan Palmary Inn Suma 3 Kanagawa 8 Osaka Bon Sejour Shin-Yamashita Bon Sejour Ibaraki Fureai no Sono Musashi Nakahara Fiore Senior Residence Hirakata Himawari Home Kamakura Legato Katano Legato Higashi-Sumiyoshi 4 Saitama Iyashi no Takatsuki Kan As Heim Nakaurawa Maison des Centenaire Haruki Smiling Home Medis Musashi Urawa Maison des Centenaire Ishizugawa 4 1 Smiling Home Medis Koshigaya Gamo Royal Residence Gotenyama Sawayaka Hirakatakan 5 Fukuoka Super Court Kadoma 3 2 Hapine Fukuoka Noke Super Court Takaishi-Hagoromo 7 Sawayaka Fukufukukan Sawayaka Obatake Ichibankan 9 Akita Sawayaka Obatake Nibankan Sawayaka Sakurakan 6 Sawayaka Parkside Shinkawa 8 Sawayaka Shinmojikan 10 Hokkaido Sawayaka Nogatakan Sawayaka Higashikagurakan Sawayaka Nokatakan 5

Locations with Parkway Life REIT’s Properties Nursing Home Manufacturing Facility

1 Based on appraised values as at 31 December 2012 and on an exchange rate of S$1.00=JPY70.18. 2 As at 31 December 2012. 23 ParkwayLife REIT Annual Report FY2012

Portfolio IN FOCUS

Competitive Strengths of Our Properties

Beneficiary of rising demand for private healthcare in growing healthcare sector

Diversified and quality portfolio

Quality tenant base

Long-term master leases ensure sustainable income stream

Weighted average lease term to expiry (by gross revenue) of 11.29 year

Favourable lease structure ensures good organic growth

Rent review provision for 97.8% of the leases (by NLA) and 90.0% with downside revenue protection; CPI+1% rent review for Singapore Hospital Properties guarantees minimum 1% rental growth annually

Minimal exposure to escalating operating expenses: Largely borne by lessees

Japan nursing homes innovatively structured for added rental security: Backup operator arrangement, lease/rental guarantee

Defensive lease structure ensures portfolio resiliency

24 Annual Report FY2012 ParkwayLife REIT

OUR PROPERTIES Hospitals

Mount Elizabeth Hospital Gleneagles Hospital 3 Mount Elizabeth, Singapore 228510 6 Napier Road, Singapore 258499 and 6A Napier Road Singapore 258500 The Mount Elizabeth Hospital Development comprises Mount Elizabeth Hospital, a medical centre and car parks. Mount Elizabeth Hospital is made up of a 10-storey block and a 5-storey block as well as car park lots. The medical centre comprises a 17-storey medical and retail block with a total of 232 strata units and a car park on the 4th to 8th storey. All the blocks are linked by a common podium with basement car park.

Parkway Life REIT owns 56.71% of the total share value of the strata lots in Mount Elizabeth Hospital Development, representing the Mount Elizabeth Hospital which has 345 beds, 30 strata units and 363 car park lots.

The Gleneagles Hospital Development comprises Gleneagles Hospital, a medical centre and car parks. Gleneagles Hospital is made up of a 10-storey block with 2 basements and a 5-storey annexe block. The medical centre is a 10-storey block with 3 basements and comprises 164 strata units from the 2nd to 10th storey. The car parks with an aggregate of 402 car park lots are located at basement 2 to 1st storey of the hospital building and basement 3 to 1st storey of the medical centre within the compound of the development.

PLife REIT owns 69.05% of the total share value of the strata lots in Gleneagles Hospital Development, representing the Gleneagles Hospital which has 272 beds, 10 strata units and 121 car park lots.

Key Statistics Mount Elizabeth Hospital Gleneagles Hospital

Land Tenure Leasehold of 67 years from 23 August 2007 Leasehold of 75 years from 23 August 2007 Strata Area of Property 58,139 sq m 49,003 sq m Number of beds 345 272 Number of Strata units 232, of which 30 are owned by PLife REIT 164, of which 10 are owned by PLife REIT Number of Car Park lots 363 402, of which 121 are owned by PLife REIT Year of Completion Hospital building - 1979 Hospital Building - 1991 and 1993 Medical Centre - 1979 and 1992 Annexe Block - 1979 Medical Centre - 1991 and 1993 Committed Occupancy 100.0% 100.0% Name of Lessee(s) Parkway Hospitals Singapore Pte. Ltd. Parkway Hospitals Singapore Pte. Ltd. Appraised Value (as at 31 December 2012) S$620 million1 S$313 million1 Gross Revenue (2012) S$36,073,281 S$18,800,265 (38.5% of Total Gross Revenue) (20.0% of Total Gross Revenue) Purchase Price S$524.43 million S$216.0 million Year of Purchase 2007 2007

Note: 1 The property was valued by Knight Frank Pte. Ltd. using Capitalisation and Discounted Cash Flow Approaches. 25 ParkwayLife REIT Annual Report FY2012

OUR PROPERTIES

Malaysia

Parkway East Hospital Gleneagles Intan Medical Centre, 319 Joo Chiat Place, Singapore 427989 and Kuala Lumpur 321 Joo Chiat Place, Singapore 427990 282 Jalan Ampang, 50450 Kuala Lumpur, Malaysia

The Parkway East Hospital property comprises Parkway East Hospital, a medical centre and car parks. Parkway East Hospital is a 4-storey block with 113 hospital beds and the medical centre is a 5-storey block comprising 28 Medical Centre units. The 1st and 5th storey of the medical centre are linked to the 1st and 4th storey of the hospital block. The car park lots are located on the 1st storey deck and within the compound of the development.

The Gleneagles Intan Medical Centre, Kuala Lumpur (“GMCKL”) is an 8-storey purpose built medical office building comprising 110 medical consulting suites accommodating various specialties and sub-specialties for outpatient services. There is a 180-seat auditorium located at top floor and commercial offerings like retail pharmacy, bank and café at ground floor. GMCKL has a basement level car park and is linked by a pedestrian bridge to Gleneagles Hospital Kuala Lumpur. Located along Jalan Ampang, it is easily accessible from any parts of the city centre and approximately 3 km away from integrated development of Kuala Lumpur City Centre (KLCC). The Jelatek PUTRA LRT station is located about 1 km due north-west of GMCKL.

PLife REIT owns approximately 23.1% of the total share value of GMCKL comprising three ground floor units, three medical consulting suites units at 2nd and 7th floors, the entire 8th floor and 69 car park lots (“GMCKL Portfolio”).

Key Statistics Parkway East Hospital Gleneagles Intan Medical Centre, KL

Land Tenure Leasehold of 75 years from Freehold 23 August 2007 Strata Area of Property 2,444 sq m (owned by PLife REIT) Gross Floor Area 10,994 sq m Number of beds 113 Number of Medical Centre units 28 Number of Car Park lots 75 69 (all of which owned by PLife REIT) Year of Completion Hospital building - 1982 Medical Centre - 1987 1999 Committed Occupancy 100.0% 99.7% (excluding car park) Name of Lessee Parkway Hospitals Singapore Pte. Ltd. Gleneagles Hospital (Kuala Lumpur) Sdn. Bhd. CIMB Bank Berhad Indocape Consolidated Sdn. Bhd. Appraised Value (as at 31 December 2012) S$47.4 million1 RM 19.8 million (S$ 8.1 million)2 Gross Revenue (2012) S$2,839,378 RM 435,997.97 (3.0% of Total Gross Revenue) (0.2% of Total Gross Revenue) Purchase Price S$34.19 million RM 16 million ($6.38 million) Year of Purchase 2007 2012

Note: 1 The property was valued by Knight Frank Pte. Ltd. using Capitalisation and Discounted Cash Flow Approaches. 2 The property was valued by DTZ Nawawi Tie Leung using the Income, Discounted Cash Flow and Comparison Approaches. Based on an exchange rate of S$1.00 to RM2.44. 26 Annual Report FY2012 ParkwayLife REIT

Nursing Akita Prefecture Chiba Prefecture Homes

Sawayaka Sakurakan Senior Chonaikai Makuhari Kan 126-2 Nakadomari, Nishi-nagano, Kakunodate-machi 5-370-4 Makuhari-cho, Hanamigawa-ku, Senboku City, Akita Prefecture Japan Chiba City, Chiba Prefecture, Japan

Sawayaka Sakurakan is a freehold 4-storey paid nursing care home with care service consisting of 110 rooms.

Well nestled in a conducive residential area, the property is approximately 6km from JR Tazawako line “Kakunodate” Station.

Senior Chonaikai Makuhari Kan is a freehold 5-storey paid nursing home with care service consisting of 108 units.

Located along the JR Sobu line in Hanamigawa-ku, Senior Chonaikai Makuhari Kan is within a short walk from Makuhari station and is near to Chiba Kensei Hospital and Makuhari Clinic.

Key Statistics Sawayaka Sakurakan Senior Chonaikai Makuhari Kan

Land Tenure Freehold Freehold Land Area 6,276 sq m 2,853 sq m Net Lettable Area 5,044 sq m 4,361 sq m Number of Units (Rooms) 110 108 Year of Completion 2006 1992; Conversion works were completed in 2004 Committed Occupancy 100.0% 100.0% Name of Lessee (s) K.K. Sawayaka Club Riei Co., Ltd Appraised Value (as at 31 December 2012) ¥ 743 million (S$10.6million)1 ¥ 1,450 million (S$20.6 million)2 Gross Revenue (2012) ¥70,300,000 ¥101,496,000 (1.2% of Total Gross Revenue) (1.7% of Total Gross Revenue) Purchase Price ¥760 million (S$11.59 million) ¥1,442 million (S$19.43 million) Year of Purchase 2010 2008

Note: 1 The property was valued by International Appraisals Incorporated using the Direct Income, Cost and Discounted Cash Flow Approaches. Based on an exchange rate of S$1.00 to 70.18 units JPY. 2 The property was valued by Colliers International using the Direct Income, Cost and Discounted Cash Flow Approaches. Based on an exchange rate of S$1.00 to 70.18 units JPY. 27 ParkwayLife REIT Annual Report FY2012

OUR PROPERTIES

Hyogo Prefecture

Palmary Inn Akashi Palmary Inn Suma 486 Yagi, Okubo-cho, Akashi City, 1-5-23 Chimori-cho, Suma-ku, Kobe City, Hyogo Prefecture, Japan Hyogo Prefecture, Japan

Palmary Inn Akashi is a freehold 6-storey paid nursing home with care service consisting of 96 units.

Located in the waterfront area of Harima Sea, Palmary Inn Akashi enjoys a fine seaview. It is easily accessible by Sanyo Dentetsu line and within a short walk to Nakayagi station.

Palmary Inn Suma is a freehold 6-storey paid nursing home with care service consisting of 59 units.

Located in the coastal district in the south of Suma-ku, Palmary Inn Suma is easily accessible by Sanyo Dentetsu line and within a short walk from Sumadera station.

Key Statistics Palmary Inn Akashi Palmary Inn Suma

Land Tenure Freehold Freehold Land Area 5,891 sq m 2,676 sq m Net Lettable Area 6,562 sq m 4,539 sq m Number of Units (Rooms) 96 59 Year of Completion 1987; 1989 Conversion works were completed in 2003 Committed Occupancy 100.0% 100.0% Name of Lessee (s) Asset Co., Ltd Asset Co., Ltd Appraised Value (as at 31 December 2012) ¥ 1,500 million (S$21.4 million)1 ¥ 872 million (S$12.4 million)1 Gross Revenue (2012) ¥ 113,400,000 ¥ 67,890,000 (1.9% of Total Gross Revenue) (1.1% of Total Gross Revenue) Purchase Price ¥ 1,498 million (S$20.19 million) ¥ 867 million (S$11.68 million) Year of Purchase 2008 2008

Kanagawa Prefecture

Bon Sejour Shin-Yamashita Himawari Home Kamakura 2-12-55 Shin Yamashita, Naka-ku, Yokohama City 1-13-1 Iwase, Kamakura City Kanagawa Prefecture, Japan Kanagawa Prefecture, Japan

Bon Sejour Shin-Yamashita is a freehold 5-storey paid nursing home with care service consisting of 74 units.

Located in an attractive setting, next to a scenic canal, Bon Sejour Shin-Yamashita is about 1.2 kilometres to the southeast of Minatomirai Line Motomachi-Chukagai Station.

Himawari Home Kamakura is a freehold 3-storey paid nursing home with care service consisting of 53 units.

Located along the JR Tokaido Line and JR Yokosuka Line in Kamukura-City, Himawari Home Kamakura is within a short drive from Ofuna station and is near to Kamakura Hospital and Ofuna Hospital.

Key Statistics Bon Sejour Shin-Yamashita Himawari Home Kamakura

Land Tenure Freehold Freehold Land Area 1,653 sq m 1,307 sq m Net Lettable Area 3,273 sq m 1,689 sq m Number of Units (Rooms) 74 53 Year of Completion 2006 1992 Conversion works were completed in 2003 Committed Occupancy 100.0% 100.0% Name of Lessee (s) Benesse Style Care Co., Ltd1 Chojukaigo Center, Inc Appraised Value (as at 31 December 2012) ¥ 1,310 million (S$18.7 million)2 ¥ 977 million (S$13.9 million)3 Gross Revenue (2012) ¥ 95,007,297 ¥ 65,880,000 (1.6% of Total Gross Revenue) (1.1% of Total Gross Revenue) Purchase Price ¥ 1,440 million (S$18.97 million) ¥ 972 million (S$13.10 million) Year of Purchase 2008 2008

Note: 1 On 1 April 2012, Benesse Style Care Co., Ltd merged as the surviving company with Bon Sejour Corporation. 2 The property was valued by International Appraisals Incorporated using the Direct Income, Cost and Discounted Cash Flow Approaches. Based on an exchange rate of S$1.00 to 70.18 units JPY. 3 The property was valued by Colliers International using the Direct Income, Cost and Discounted Cash Flow Approaches. Based on an exchange rate of S$1.00 to 70.18 units JPY. 29 ParkwayLife REIT Annual Report FY2012

OUR PROPERTIES

Okayama Prefecture

Fureai no Sono Musashi Nakahara Amille Nakasyo 5-14-25 Shimo Kotanaka, Nakahara-ku, Kawasaki 923-1 Aza Miyata, Hirata, Kurashiki Cty, Kanagawa Prefecture, Japan Okayama Prefecture, Japan

Fureai no Sono Musashi Nakahara is a freehold 4-storey paid nursing care home with care service consisting of 47 units.

Well nestled in a conducive residential area dotted with senior citizens’ facilities in the surrounding vicinity, the property is approximately 15 minutes walk from JR Nanbu line “Musashi-Nakahara” Station.

Amille Nakasyo is a freehold 3-storey paid nursing home with care service consisting of 75 units.

Well nestled in a conducive residential area with retail facilities in the vicinity, the property is approximately 2.3km from JR Sanyo line “Kurashiki” Station.

Key Statistics Fureai no Sono Musashi Nakahara Amille Nakasyo

Land Tenure Freehold Freehold Land Area 935 sq m 2,901 sq m Net Lettable Area 1,847 sq m 3,259 sq m Number of Units (Rooms) 47 75 Year of Completion 2006 2001 Committed Occupancy 100.0% 100.0% Name of Lessee (s) Y.K. Shonan Fureai no Sono Message Co., Ltd; Shakai Fukushi Houjin Keiyu-Kai Appraised Value (as at 31 December 2012) ¥ 762 million (S$10.9 million)1 ¥ 592 million (S$8.4 million)2 Gross Revenue (2012) ¥ 52,800,000 ¥ 48,980,400 (0.9% of Total Gross Revenue) (0.8% of Total Gross Revenue) Purchase Price ¥ 641 million (S$10.03 million) ¥ 572 million (S$8.8 million) Year of Purchase 2010 2009

Note: 1 The property was valued by Colliers International using the Direct Income, Cost and Discounted Cash Flow Approaches. Based on an exchange rate of S$1.00 to 70.18 units JPY. 2 The property was valued by International Appraisals Incorporated using the Direct Income, Cost and Discounted Cash Flow Approaches. Based on an exchange rate of S$1.00 to 70.18 units JPY. 30 Annual Report FY2012 ParkwayLife REIT

Osaka Prefecture

Bon Sejour Ibaraki Fiore Senior Residence Hirakata 25-2, Nishi-Toyokawacho, Ibaraki City, 4-10, Higashikori-Shinmachi, Hirakata City, Osaka Prefecture, Japan Osaka Prefecture, Japan

Bon Sejour Ibaraki is a 4-storey paid nursing home with care service consisting of 94 units.

It sits within a serene residential district in northern part of Osaka prefecture and is located adjacent to the picturesque Exposition Memorial Park, University of Osaka campus and the Ibaraki Country Club.

Easily accessible by Osaka Monorail Saito Line, Bon Sejour Ibaraki is located within a short walk to Toyokawa Station and Handai Byoinmae Station. The Osaka Monorail runs to Osaka Itami Airport which is approximately half an hour away.

Fiore Senior Residence Hirakata is a freehold 3-storey paid nursing home with care service consisting of 40 units.

The property is approximately 3.5 km from Keihan-Katano Line “Hirakata City” Station of the Keihan-Katano line. Well nestled in a conducive residential area, there are also retail shops and restaurants located in the vicinity.

Key Statistics Bon Sejour Ibaraki Fiore Senior Residence Hirakata

Land Tenure Leasehold of 50 years from 1 May 2007 Freehold Land Area 3,051 sq m 727 sq m Net Lettable Area 3,651 sq m 1,155 sq m Number of Units (Rooms) 94 40 Year of Completion 2008 2007 Committed Occupancy 100.0% 100.0% Name of Lessee (s) Benesse Style Care Co., Ltd1 K.K. Vivac Appraised Value (as at 31 December 2012) ¥ 1,054 million (S$15.0 million)2 ¥ 450 million (S$6.4 million)2 Gross Revenue (2012) ¥ 98,495,436 ¥ 33,600,000 (1.6% of Total Gross Revenue) (0.6% of Total Gross Revenue) Purchase Price ¥ 1,177 million (S$15.51 million) ¥ 433 million (S$6.6 million) Year of Purchase 2008 2009

OUR PROPERTIES

Supercourt Kadoma Supercourt Takaishi-Hagoromo 11-27, Yanagimachi, Kadoma CIty 4-1-22, Takashinohama, Takaishi City Osaka Prefecture, Japan Osaka Prefecture, Japan

Supercourt Kadoma is a leasehold 5-storey paid nursing home with care service consisting of 88 units.

Easily accessible by Keihan Line, Supercourt Kadoma is well nestled in a conducive residential area and located within a short walk to “Keihan Kadoma” Station.

Supercourt Takashi-Hagoromo is a leasehold 3-storey paid nursing home with care service consisting of 98 units.

Easily accessible by Nankai Line, Supercourt Takashi-Hagoromo is located within a short walk to “Takashinohama” Station. Well nestled in a conducive residential area, the property is also located near to Takaishi Hospital and Takaishi Shrine.

Key Statistics Supercourt Kadoma Supercourt Takaishi-Hagoromo

Land Tenure Leasehold of 50 years from 1 December 2007 Leasehold of 30 years from 1 November 2008 Land Area 1,518 sq m 2,010 sq m Net Lettable Area 2,794 sq m 3,021 sq m Number of Units (Rooms) 88 98 Year of Completion 2007 2008 Committed Occupancy 100.0% 100.0% Name of Lessee (s) City Estate Co., Ltd City Estate Co., Ltd Appraised Value (as at 31 December 2012) ¥ 594 million (S$8.5 million)1 ¥ 671 million (S$9.6 million)1 Gross Revenue (2012) ¥ 58,080,000 ¥ 64,680,000 (1.0% of Total Gross Revenue) (1.1% of Total Gross Revenue) Purchase Price ¥ 522 million (S$8.0 million) ¥ 568 million (S$8.7 million) Year of Purchase 2009 2009

Maison des Centenaire Ishizugawa Maison des Centenaire Haruki 2-1-9, Hamaderaischizucho, Nishi-ku, Sakai City 12-20 Haruki-Miyakawacho, Kishiwada-City Osaka Prefecture, Japan Osaka Prefecture, Japan

Maison des Centenaire Ishizugawa is a freehold 5-storey paid nursing home with care service consisting of 52 units.

Easily accessible by Nankai Wakayama Line, Maison des Centenaire Ishizugawa is located within a short walk to “Ishizugawa” Station. Well nestled in a conducive residential area, the property is also located near to Kusuhara Hospital.

Maison des Centenaire Haruki is a freehold 4-storey paid nursing home with care service consisting of 36 units.

Easily accessible by Nankai-Dentetsu Line, Maison des Centenaire Haruki is located within a short walk to “Haruki” Station. Well nestled in a conducive residential area, the property is also located near to Amanogawa Hospital.

Key Statistics Maison des Centenaire Ishizugawa Maison des Centenaire Haruki

Land Tenure Freehold Freehold Land Area 1,111 sq m 801 sq m Net Lettable Area 2,129 sq m 1,263 sq m Number of Units (Rooms) 52 362 Year of Completion 1988 1996 Conversion works were completed in 2003 Conversion works were completed in 2006 Committed Occupancy 100.0% 100.0% Name of Lessee (s) Miyako Kenkokai Medical Corporation Miyako Kenkokai Medical Corporation Appraised Value (as at 31 December 2012) ¥ 773 million (S$11.0 million)1 ¥ 603 million (S$8.6 million)1 Gross Revenue (2012) ¥ 60,826,000 ¥ 47,124,000 (1.0% of Total Gross Revenue) (0.8% of Total Gross Revenue) Purchase Price ¥ 690 million (S$10.64 million) ¥ 500 million (S$7.7 million) Year of Purchase 2009 2009

Note: 1 The property was valued by International Appraisals Incorporated using the Direct Income, Cost and Discounted Cash Flow Approaches. Based on an exchange rate of S$1.00 to 70.18 units JPY. 2 As at Sep 2009, the total number of units increased from 33 to 36 following the completion of Asset Enhancement Initiative. 33 ParkwayLife REIT Annual Report FY2012

OUR PROPERTIES

Iyashi no Takatsuki Kan Legato Higashi-Sumiyoshi 3-19, Haccho-Nishimachi, Takatsuki City 1-7-30, Kuwazu Higashisumiyoshi-ku Osaka Prefecture, Japan Osaka Prefecture, Japan

Iyashi no Takatsuki Kan is a freehold 6-storey paid nursing home with care service consisting of 87 units.

Well nestled in a conducive residential area, the property is within a short walk to JR Kyoto Line “Takatsuki” Station.

Legato Higashi-Sumiyoshi is a freehold 7-storey paid nursing care home with care service consisting of 71 units.

Nestled in a residential area with offices and retails stores within the surrounding vicinity, the property is approximately 10 minutes walk from JR Osaka Circular line “Teradacho” Station.

Key Statistics Iyashi no Takatsuki Kan Legato Higashi-Sumiyoshi

Land Tenure Freehold Freehold Land Area 2,023 sq m 951 sq m Net Lettable Area 3,915 sq m 2,828 sq m Number of Units (Rooms) 87 71 Year of Completion 1997 2006 Conversion works were completed in 2005 Committed Occupancy 100.0% 100.0% Name of Lessee (s) Riei Co., Ltd Planning Care Co., Ltd Appraised Value (as at 31 December 2012) ¥ 1,380 million (S$19.7 million)1 ¥ 926 million (S$13.2 million)2 Gross Revenue (2012) ¥ 100,034,688 ¥ 70,886,400 (1.7% of Total Gross Revenue) (1.2% of Total Gross Revenue) Purchase Price ¥ 1,136 million (S$17.52 million) ¥ 783 million (S$12.26 million) Year of Purchase 2009 2010

Legato Katano Royal Residence Gotenyama 2-5-2, Kisabe, Katano City 16-4 Gotenyamacho, Hirakata City Osaka Prefecture, Japan Osaka Prefecture, Japan

Legato Katano is a freehold 3-storey paid nursing home with care service consisting of 49 units.

Well nestled in a residential area with retail stores and hospitals in the surrounding vicinity, the property is approximately 4 minutes walk from Keihan Electric Railway Katano Line Katano Station.

Royal Residence Gotenyama is a freehold 4+1 (basement) storey paid nursing care home with care service consisting of 44 units.

Well nestled in a quiet residential area with retail stores and medical institutions in the surrounding vicinity, the property is approximately 5 minutes walk from Keihan Electric Railway Main Line Gotenyama Station.

Key Statistics Legato Katano Royal Residence Gotenyama

Land Tenure Freehold Freehold Land Area 1,139 sq m 794 sq m Net Lettable Area 1,688 sq m 1,560 sq m Number of Units (Rooms) 49 44 Year of Completion 2004 2006 Committed Occupancy 100.0% 100.0% Name of Lessee (s) Planning Care Co., Ltd K.K. Shakai Fukuishi Sogo Kenkyujo Appraised Value (as at 31 December 2012) ¥ 589 million (S$8.4 million)1 ¥ 485 million (S$6.9 million)1 Gross Revenue (2012) ¥ 46,040,400 ¥ 38,220,000 (0.8% of Total Gross Revenue) (0.6% of Total Gross Revenue) Purchase Price ¥ 514 million (S$8.0 million) ¥ 402 million (S$6.3 million) Year of Purchase 2010 2010

OUR PROPERTIES

Fukuoka Prefecture

Sawayaka Hirakatakan Sawayaka Parkside Shinkawa 2-1160-13 Shoudaiotani, Hirakata City, 103 Shinkawa-machi, Tobata-ku, Kitakyushu City Osaka Prefecture, Japan Fukuoka Prefecture, Japan

Sawayaka Hirakatakan is a freehold 5-storey paid nursing care home with care service consisting of 108 units.

Well nestled in conducive residential area in the vicinity, the Property is approximately 2.2km from JR Katamachi line “Nagao” Station.

Sawayaka Parkside Shinkawa is a freehold 5-storey paid nursing care home with care service consisting of 58 units.

Well nestled in conducive residential area in the vicinity, the Property is approximately 1km from JR Kagoshima line “Tobata” Station.

Key Statistics Sawayaka Hirakatakan Sawayaka Parkside Shinkawa

Land Tenure Freehold Freehold Land Area 1,850 sq m 1,445 sq m Net Lettable Area 3,696 sq m 2,855 sq m Number of Units (Rooms) 108 58 Year of Completion 2008 2003 Conversion works completed in 2009 Committed Occupancy 100.0% 100.0% Name of Lessee (s) K.K. Sawayaka Club K.K. Sawayaka Club Appraised Value (as at 31 December 2012) ¥ 1,308 million (S$18.6 million)1 ¥ 951 million (S$13.6 million)1 Gross Revenue (2012) ¥ 72,360,000 (1.2% of Total Gross Revenue) ¥ 56,795,328 million (0.9% of Total Gross Revenue) Purchase Price ¥ 1,247 million (S$20.78 million) ¥ 967 million (S$16.12 million) Year of Purchase 2012 2012

Hapine Fukuoka Noke Sawayaka Obatake Ichibankan 4-35-9, Noke, Sawara-ku, Fukuoka City, 3-3-51 Obatake, Kokura-kita-ku, Kita-kyushu City, Fukuoka Prefecture, Japan Fukuoka Prefecture, Japan

Hapine Fukuoka Noke is a freehold 5-storey paid nursing home with care service consisting of 64 units.

Well nestled in a conducive residential area, the property is approximately 0.9km from Subway Nanakuma Line “Noke” Station.

Sawayaka Obatake Ichibankan is a freehold 5-storey paid nursing home with care service consisting of 78 unit.

Well nestled in a conducive residential area, the property is approximately 2.5km from JR line “Kokura” Station.

Key Statistics Hapine Fukuoka Noke Sawayaka Obatake Ichibankan

Land Tenure Freehold Freehold Land Area 1,396 sq m 1,786 sq m Net Lettable Area 2,912 sq m 3,491 sq m Number of Units (Rooms) 64 78 Year of Completion 2006 2007 Committed Occupancy 100.0% 100.0% Name of Lessee (s) Care Link Co., Ltd K.K. Sawayaka Club Appraised Value (as at 31 December 2012) ¥ 768 million (S$10.9 million)1 ¥ 692 million (S$9.9 million)1 Gross Revenue (2012) ¥ 57,996,000 ¥ 57,050,000 (1.0% of Total Gross Revenue) (1.0% of Total Gross Revenue) Purchase Price ¥ 752 million (S$11.60 million) ¥ 687 million (S$10.48 million) Year of Purchase 2009 2010

OUR PROPERTIES

Sawayaka Obatake Nibankan Sawayaka Nokatakan 1-6-26 Obatake, Kokura-kita-ku, Kita-kyushu City 4-34-1, Nokata, Nishi-ku, Fukuoka City Fukuoka Prefecture, Japan Fukuoka Prefecture, Japan

Sawayaka Obatake Nibankan is a freehold 3-storey paid short stay / day care home consisting of 26 units.

Well nestled in a conducive residential area, the property is approximately 2.5km from JR line “Kokura” Station.

Sawayaka Nokatakan is a freehold 3-storey paid nursing care home with care service consisting of 100 units.

Well nestled in a conducive residential area, the property is approximately 2km from Subway Nanakuma Line (No.3) “Hashimoto” Station.

Key Statistics Sawayaka Obatake Nibankan Sawayaka Nokatakan

Land Tenure Freehold Freehold Land Area 1,042 sq m 5,748 sq m Net Lettable Area 1,538 sq m 4,566 sq m Number of Units (Rooms) 26 short stay / day care rooms 100 Year of Completion 2007 2007 Committed Occupancy 100.0% 100.0% Name of Lessee (s) K.K. Sawayaka Club K.K. Sawayaka Club Appraised Value (as at 31 December 2012) ¥ 309 million (S$4.4 million)1 ¥ 851 million (S$12.1 million)1 Gross Revenue (2012) ¥ 25,105,083 ¥ 67,142,256 (0.4% of Total Gross Revenue) (1.1% of Total Gross Revenue) Purchase Price ¥ 276 million (S$4.2 million) ¥ 821 million (S$12.53 million) Year of Purchase 2010 2010

Sawayaka Shinmojikan Sawayaka Nogatakan 1543-1 Oaza Hata, Moji-ku, Kita-kyushu City 442-1 Oaza Yamabe, Nogata City Fukuoka Prefecture, Japan Fukuoka Prefecture, Japan

Sawayaka Shinmojikan is a freehold 6-storey paid nursing care home with care service consisting of 112 units.

Well nestled in a conducive residential area with farms and nursing homes in the surrounding vicinity, the property is approximately 7km from JR Kagoshima line “Moji” Station.

Sawayaka Nogatakan is a freehold 5-storey paid nursing care home with care service consisting of 78 units.

Well nestled in a conducive residential area, the property is approximately 400m from JR Chikuho line “Nogata” Station.

Key Statistics Sawayaka Shinmojikan Sawayaka Nogatakan

Land Tenure Freehold Freehold Land Area 2,813 sq m 2,707 sq m Net Lettable Area 5,088 sq m 3,147 sq m Number of Units (Rooms) 112 78 Year of Completion 2007 2005 Committed Occupancy 100.0% 100.0% Name of Lessee (s) K.K. Sawayaka Club K.K. Sawayaka Club Appraised Value (as at 31 December 2012) ¥ 875 million (S$12.5 million)1 ¥ 645 million (S$9.2 million)1 Gross Revenue (2012) ¥ 75,400,000 ¥ 57,400,000 (1.3% of Total Gross Revenue) (1.0% of Total Gross Revenue) Purchase Price ¥ 886 million (S$13.52 million) ¥ 660 million (S$10.06 million) Year of Purchase 2010 2010

OUR PROPERTIES

Saitama Prefecture

Sawayaka Fukufukukan Smiling Home Medis Musashi Urawa 11-24-4 Fukuyanagi, Tobata-ku, Kita-Kyushu City 5-5-6 Shikatebukuro, Minami-ku, Saitama City Fukuoka Prefecture, Japan Saitama Prefecture, Japan

Sawayaka Fukufukukan is a freehold 4+1 storey paid nursing care home with care service consisting of 72 units.

Well nestled in conducive residential area in the vicinity, the Property is approximately 2.5km from JR Kagoshima line “Tobata” Station.

Smiling Home Medis Musashi Urawa is a freehold 3-storey paid nursing home with care service consisting of 44 units.

Located along the JR Saikyo Line, Smiling Home Medis Musashi Urawa is within a short walk from Musashi Urawa station and is near Akiba Hospital.

Key Statistics Sawayaka Fukufukukan Smiling Home Medis Musashi Urawa

Land Tenure Freehold Freehold Land Area 1,842 sq m 802 sq m Net Lettable Area 3,074 sq m 1,603 sq m Number of Units (Rooms) 72 44 Year of Completion 2008 1991; Conversion works were completed in 2004 Committed Occupancy 100.0% 100.0% Name of Lessee (s) K.K. Sawayaka Club Medis Corporation Appraised Value (as at 31 December 2012) ¥ 622 million (S$8.9 million)1 ¥ 629 million (S$8.9 million)2 Gross Revenue (2012) ¥ 50,150,000 ¥ 44,820,000 (0.8% of Total Gross Revenue) (0.7% of Total Gross Revenue) Purchase Price ¥ 587 million (S$9.1 million) ¥ 627 million (S$8.4 million) Year of Purchase 2011 2008

Smiling Home Medis Koshigaya Gamo As Heim Nakaurawa 2-2-25, Gamonishimachi, Kosigaya-ku, 2-21-9, Nishibori, Sakura-ku Saitama Prefecture, Japan Saitama Prefecture, Japan

Smiling Home Medis Koshigaya Gamo is a freehold 6-storey paid nursing home with care service consisting of 100 units.

Located along the Tobu Isesaki Line, Smiling Home Medis Koshigaya Gamo is within a short walk from Gamo station and is near Dokkyo Medical University Koshigaya Hospital and Minami Koshigaya Kenshinkai Clinic.

As Heim Nakaurawa is a freehold 4+1 (basement) storey paid nursing care home with care service consisting of 64 units.

Well nestled in a residential area with large parks providing a natural green environment, the property is approximately 8 minutes walk from JR Saikyo line “Nakaurawa” Station.

Key Statistics Smiling Home Medis Koshigaya Gamo As Heim Nakaurawa

Land Tenure Freehold Freehold Land Area 1,993 sq m 1,762 sq m Net Lettable Area 3,824 sq m 2,692 sq m Number of Units (Rooms) 100 64 Year of Completion 1989; 2006 Conversion works were completed in 2005 Committed Occupancy 100.0% 100.0% Name of Lessee (s) Medis Corporation K.K. As Partners Appraised Value (as at 31 December 2012) ¥ 1,310 million (S$18.7 million)1 ¥ 964 million (S$13.7 million)1 Gross Revenue (2012) ¥ 91,260,000 ¥ 67,200,000 (1.6% of Total Gross Revenue) (1.1% of Total Gross Revenue) Purchase Price ¥ 1,321 million (S$17.80 million) ¥ 833 million (S$13.05 million) Year of Purchase 2008 2010

OUR PROPERTIES

Tokyo Prefecture Hokkaido Prefecture

Fureai no sono Nerima Takanodai Sawayaka Higashikagurakan 3-15-37 Takanodai, Nerima-ku, 2-351-4 Kitaichijo Higashi, Higashikagura-cho Tokyo Prefecture, Japan Kamikawa-gun, Hokkaido Prefecture, Japan

Fureai no sono Nerima Takanodai is a freehold 3-storey paid nursing home with care service consisting of 64 units.

Located along Seibu Ikebukuro line, Fureai no sono Nerima Takanodai is within a short walk from Nerima Takanodai station and is near Juntendo Hospital.

Sawayaka Higashikagurakan is a freehold 4-storey paid nursing care home with care service consisting of 110 units.

Well nestled in a serene location, the Property is approximately 920m from Higashikagura Bus Terminal.

Key Statistics Fureai no sono Nerima Takanodai Sawayaka Higashikagurakan

Land Tenure Freehold Freehold Land Area 2,282 sq m 4,813 sq m Net Lettable Area 2,526 sq m 5,335 sq m Number of Units (Rooms) 64 110 Year of Completion 1988; 2010 Conversion works were completed in 2005 Committed Occupancy 100.0% 100.0% Name of Lessee (s) Y.K. Shonan Fureai no Sono K.K. Sawayaka Club

Appraised Value ¥ 1,400 million (S$19.9 million)1 ¥ 891 million (S$12.7 million)2 (as at 31 December 2012) Gross Revenue (2012) ¥ 94,200,000 ¥ 60,874,047 (1.6% of Total Gross Revenue) (1.0% of Total Gross Revenue) Purchase Price ¥ 1,301 million (S$17.53 million) ¥ 906 million ($15.10 million) Year of Purchase 2008 2012

Note: 1 The property was valued by Colliers International using the Direct Income, Cost and Discounted Cash Flow Approaches. Based on an exchange rate of S$1.00 to 70.18 units JPY. 2 The property was valued by International Appraisals Incorporated using the Direct Income, Cost and Discounted Cash Flow Approaches. Based on an exchange rate of S$1.00 to 70.18 units JPY. 42 Annual Report FY2012 ParkwayLife REIT

Others

P-Life Matsudo 357 Matsuhidai, Matsudo City, Chiba Prefecture, Japan

The P-Life Matsudo property is a freehold 2-storey pharmaceutical product distributing and manufacturing facility.

Conveniently located approximately 700 metres north of Matsuhidai Station on the Hokuso- Kaihatsu Railway Line and within the vicinity of Exclusive Industrial District in Matsuhidai Industrial Park.

P-Life Matsudo property is a specially designed built-to-suit property.

Key Statistics P-Life Matsudo

Land Tenure Freehold Land Area 8,450 sq m Net Lettable Area 3,240 sq m Number of Units (Rooms) - Year of Completion 2005, Additional works were completed in 2007 Committed Occupancy 100.0% Name of Lessee (s) Nippon Express Co., Ltd (Master Lessee) Alere Medical Co., Ltd (Sub-Lessee)2 Appraised Value ¥ 2,850 million (S$40.6 million)1 (as at 31 December 2012) Gross Revenue (2012) ¥ 178,635,600 (3.0% of Total Gross Revenue) Purchase Price ¥ 2,590 million (S$34.19 million) Year of Purchase 2008

Note: 1 The property was valued by Colliers International using the Direct Income, Cost and Discounted Cash Flow Approaches. Based on an exchange rate of S$1.00 to 70.18 units JPY. 2 Corporate rebranding by Inverness Medical Japan Co., Ltd with effect from 1 April 2011. 43 Laying the yellow brick road Paving inroads to growth opportunities through the disciplined execution of our strategies Despite economic headwinds, the Asia Pacific healthcare sector continues to exhibit long-term growth prospects. Riding on a strong and defensive foundation and firmly guided by our core strategies “Targeted Investments”, “Proactive Asset Management” and “Prudent and Dynamic Capital and Financial Management”, PLife REIT continues to seek out new opportunities in the challenging market and remains well-positioned for growth moving forward. Annual Report FY2012 ParkwayLife REIT

OUR GROWTH STRATEGY

In 2012, despite scattered signs of improvement, PLife REIT leverages on its partnerships and adopts global economic uncertainties linger as business clustering approach to expand within existing markets sentiment remained tepid. Soundly anchored to a while venturing into new markets on a measured solid and defensive foundation, PLife REIT turned manner. It continues to capitalise on the opportunities in another year of steady financial performance, presented to benefit from the growing demand for which was propelled by its concerted efforts and quality healthcare services in the Asia Pacific region. the disciplined execution of its growth strategies - “Targeted Investment”, “Proactive Asset Management” and “Dynamic Capital and Financial Exploring Growth from Within Management”. Proactive Asset Management continues to serve as the bedrock in fueling PLife REIT’s organic growth. Whilst seeking to maximise its portfolio performance, Exploring Growth in the Region continual emphasis is made to foster good Landlord- PLife REIT remains vigilant for compelling yield- Lessee relationships. accretive acquisition opportunities as it seeks to further expand its footprint in the region. As PLife REIT Embracing the concept of collaborative AEIs, PLife continues to tread on its acquisition path, calibrated REIT continued to build on its track record and moves are made to ensure that assets acquired are completed two more AEIs for its Japan portfolio in not only value-generating, but would also enhance 2012. the long-term defensiveness of the overall portfolio. In May 2012, PLife REIT completed its 5th AEI In March 2012, PLife REIT fortified its position in the for its Japan portfolio with the roll-out of its new Japan nursing home market with the acquisition of “Refurbishment AEI” concept, whereby property three more nursing homes in the Fukuoka, Osaka refurbishment costs are being borne by PLife REIT and Hokkaido prefectures. in exchange for incremental rent from its Lessees. The maiden Refurbishment AEI at Maison des In August 2012, PLife REIT made its inaugural foray Centenaire Ishizugawa involved improvement works into Malaysia with the acquisition of strata titled being carried out to the property’s lift systems, units/lots within Gleneagles Intan Medical Centre, interior finishing and façade. This Refurbishment AEI Kuala Lumpur. Emulating its entry into Japan, PLife is mutually beneficial to PLife REIT and its lessee as it REIT embarked on a small-sized acquisition before unlocks greater value from the property, and serves consolidating its presence over time with enhanced to preserve the competitiveness of the property and market familiarity. revenue sustainability of the nursing home operator.

1 Based on an exchange rate of S$1.00 to JPY70.18

45 ParkwayLife REIT Annual Report FY2012

OUR GROWTH STRATEGY

On 30 November 2012, PLife REIT completed its 6th S$ million AEI for its Japan portfolio, involving the creation of 250.0 a central kitchen at Sawayaka Obatake Nibankan to facilitate the catering and preparation of food for other 202.78 200.0 K.K. Sawayaka Club facilities in the vicinity. The AEI 162.88 yielded attractive returns for PLife REIT as gross rent 150.0 for the unexpired lease term increased by 5.04%. 100.0 PLife REIT is committed to delivering continuous 58.55 and sustainable growth for its Unitholders, and 50.0 45.60 concurrently seeks to rationalise the potential and 14.251 relevance of each asset to ensure an optimal portfolio 0.0 mix. SGD due JPY due JPY due SGD due JPY due 2013 2014 2015 2016 2017

Note: 1. Covered by the 4-year S$80.0 million RCF maturing in FY2016 Growth Underpinned by Strong Financials As part of its dynamic financial and capital Attributed to its prudent financial risk management, management strategy, PLife REIT continually PLife REIT has not been affected by the volatility evaluates its position and pre-emptively secures well- in Japanese Yen exchange rate in FY2012. PLife diversified, long term financing sources to sustain its REIT’s natural hedge strategy adopted since its growth plans and strengthen its financial position. first investment in Japan in 2008 to borrow loans denominated in Japanese Yen for its investments in On 25 June 2012, PLife REIT put in place a four-year Japan insulates it from exposure to foreign currency S$80.0 million committed and unsecured Revolving fluctuations. In 1Q 2012, in view of the increasingly Credit Facility (the “Facility”) for the pre-emptive volatile Japanese Yen exchange rate, PLife REIT has refinancing of short-term loan facilities maturing pro-actively extended its Japanese Yen denominated in FY2012 as well as the S$50.0 million Floating net income forward hedge for another five years till Rate Notes (“FRN”) maturing in FY2013. Through 1Q 2017. These proactive financial risk management this exercise, the Group purchased and cancelled measures have strengthened PLife REIT’s resiliency S$35.75 million of the outstanding FRN using the against foreign exchange risks, thereby enabling it Facility. The remaining S$14.25 million of the FRN to maintain a stable net asset value and distributable will be covered by the Facility when the FRN falls due income to Unitholders. With a robust balance sheet in March 2013. Through the use of this Facility, PLife and ample debt headroom, PLife REIT remains REIT has no refinancing needs for its total existing nimble to capitalise on growth opportunities in the debt portfolio until FY2014. region.

46 Annual Report FY2012 ParkwayLife REIT

INVESTOR RELATIONS

PLife REIT is committed to engaging and fostering to engage local and foreign institutional investors and strong relationships with all its Unitholders. Through analysts includes regular face-to-face meetings with a proactive and targeted outreach programme, PLife key investors, participating in investment/industry REIT aims to better serve the specific needs of its conferences, analyst briefings and organising Non- investors as well as maintain regular and transparent deal Roadshows in key financial centre. In 2012, the communication with the investing community, media management participated in a number of investment and various Unitholders. / industry conferences and non-deal roadshows both in Singapore and overseas. Some of these key Investor Relations activities are listed below. Corporate Website PLife REIT’s corporate website (www.plifereit.com) Key IR Activities in 2012 offers easy access to comprehensive information on the company, including stock data, SGXNet 1st Quarter UBS Non-deal Roadshow (Hong Kong) announcements, financial statements, press releases, presentation slides, annual reports and other corporate 2nd Quarter Citi ASEAN Investor Conference (Singapore) developments. The website is regularly updated to keep Unitholders abreast of the company’s performance, Annual General Meeting as well as provide insights into PLife REIT’s strategy rd and latest developments. To maintain transparent and 3 Quarter Post Results Investors’ Luncheon hosted by UOB Kay Hian (Singapore) open communication with Unitholders, the Manager welcomes feedback and enquiries which can be made Post Results Investors’ Luncheon hosted by via its website. CLSA (Singapore)

Deutsche Bank Non-deal Roadshow Corporate Literature (Hong Kong) To keep Unitholders apprised of its performance and developments, PLife REIT regularly publishes UBS ASEAN Conference 2012 (Singapore) updates on its financial and operational data via its th quarterly SGXNet results announcements, annual 4 Quarter SGX/DBS Vickers Asian Horizon Conference reports as well as press releases and presentation (New York, Boston & San Francisco) slides.

In line with its continuous efforts to reach out to a To help keep investors, analysts and media better wider group of Unitholders on its assets and business understand the REIT’s portfolio, the Manager would landscape, PLife REIT has created a brochure periodically arrange site visits to its key properties. containing its key information and properties in Japanese language to better cater to its audiences Through its Outreach Program, the management in Japan, which include investors, asset managers as was able to effectively reach out to both existing and well as potential healthcare partners. new investors to raise awareness and interest in PLife REIT.

Annual General Meeting PLife REIT holds its Annual General Meeting (AGM) in Analyst Coverage April in Singapore each year. The AGM provides not The following brokerage houses provide research only a platform for Unitholders to vote on proposed coverage on PLife REIT as of 31 December 2012: resolutions, but also an opportunity for PLife REIT’s Board of Directors and management to meet • CIMB Research personally with Unitholders and better provide them • Citi Investment Research with an understanding of the strategic direction of the • DBS Vickers Research REIT and address any of their queries/concerns. • DMG & Partners Research • Phillip Securities Research • UBS Investment Research Investor Outreach Program • UOB Kay Hian Research The management undertakes to engage the investing community on a regular basis. Our outreach program

47 ParkwayLife REIT Annual Report FY2012

MARKET REVIEW AND OUTLOOK

The Asia Pacific healthcare sector’s long term urbanisation. Besides adding to the burden of public prospects present further growth opportunities healthcare systems, it is expected that more patients for PLife REIT. In 2012, the Asia Pacific healthcare will be seeking specialist consultation with private market was worth US$369.9 billion and is expected healthcare providers, thereby adding to demand in grow at a CAGR of 12.8% to US$752 billion in 2018, this medical care segment. driven by rising demand for healthcare services. This surpasses global growth rates which are expected to Growth of Chronic Diseases in Asia average 6% over the same period.1

Philippines As the region continues on its economic development, the fundamentals in quality healthcare demand Malaysia

are expected to remain robust barring unforeseen India circumstances, driven by increasing affluence and incidences of chronic illness, rise in medical tourism Indonesia and rapidly ageing populations. China

Thailand

Increasing Affluence to Drive Demand for 2016 Singapore Quality Healthcare 2011 According to World Bank statistics in 2012, GDP Hong Kong in Asia Pacific has grown by 133% from US$8.1 trillion in 2000 to US$18.8 trillion in 2011.2 This has Japan in turn translated into increased demand for quality healthcare services, which have become relatively 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% more affordable with increasing affluence across the % population with at least one chronic disease 2011, 2016

region. Source: Frost & Sullivan (2012)

Asia Pacific GDP To meet the increasing demand for healthcare US$ Trillion services due to changing demographics, about 20.00 180 million new hospital beds are estimated to be

18.00 required over the next decade in Asia Pacific, of which over 40% of the supply is expected to come

16.00 from the private sector. As a result, private hospitals in Asia Pacific are expected to grow their revenues at 133% 3 14.00 a CAGR of 17.1% between 2012 and 2018 .

12.00 Medical Tourism as a Catalyst for Private 10.00 Healthcare Growth On the back of rising affluence and ease of travel, 8.00 more medical patients are travelling within the region to seek quality healthcare services which may not be 6.00 available in their home countries. Medical patients 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 from other parts of the world are also seeking private Source: World Bank (2012) healthcare services in the Asia Pacific due to the relatively shorter waiting times and cost efficient Another factor driving higher demand for private procedures as compared to their home markets. Other healthcare in Asia Pacific is the rise in chronic key factors include the accessibility to sophisticated illnesses, which is expected to continue rising3 as medical technology, rising awareness of middle class a result of rapid lifestyle changes amidst increasing seeking affordable and quality medical care, rise in

1 Press Release: Rising patient demands and life expectancy in Asia Pacific continues to drive healthcare sector. Frost & Sullivan 2 World Bank data 2012 3 Pharma and Biotech Industry Outlook. Frost & Sullivan 48 Annual Report FY2012 ParkwayLife REIT

availability of skilled medical professionals, outside Life Expectancy at Birth for Asia Pacific their home markets. 74

Supported by the rise in standards of medical 72 treatment in Asia Pacific, as attested by the increase in number of Joint Commission International- 70 accredited hospitals in Asia from 15 in 2005 to 115 in 20114, medical tourism has become a burgeoning 68 industry in the region. It is estimated that in 2012, Asia attracted 5.6 million medical tourists, bringing in 66 revenues of nearly US$9.1 billion5. Spurred by intra- Asia Pacific and inter-region demands, the medical 64 tourism industry is expected to grow by 15% to 20% annually between 2012 and 20156. 62

60 Ageing Populations And Longer 1970 1975 1980 1985 1990 1995 2000 2005 2010

Life Expectancies Source: World Bank (2012) With continual economic and technological development, countries in the Asia Pacific region As a result of longer life spans and the trend of are faced with longer life expectancies and ageing families having fewer children due to various reasons populations. including higher cost of living, especially in more developed nations, Asia Pacific is faced with the issue of an ageing population and workforce. By 2050, it is expected that 25% or 1.3 billion of the Asia Pacific population will be above 65 years of age8. This issue is more pronounced in the more developed economies, with countries such as Japan and Hong Kong having 23.4% and 13.0% of their populations respectively being over 65 years old in 20119.

Governments in the Asia Pacific region are keen to do more to address their ageing population issues. These measures range from the provision of various healthcare and insurance schemes to supporting the set up of more elderly care facilities and advanced healthcare facilities as well as encouraging and Increasing life expectancies have a positive correlation facilitating private sector participation. with the standard of living and healthcare in the region. With the growing provision and availability of In view of the myriad factors at play, the demand for basic and advanced healthcare, populations in Asia quality healthcare services in the region is expected Pacific are expected to live longer. The average life to continue rising in the long term. PLife REIT looks to expectancy (at birth) in the region has risen from 61.7 continue meeting these growing needs with a portfolio years in 1970 to 73.3 years in 20102. that provides a spectrum of private healthcare services, and to explore further opportunities within Advances in technology have allowed for higher the region to grow its portfolio and deliver greater standards of medical care, which is attributable to value to its Unitholders. new and better treatment methods and procedures. Technology improvements and medical innovations have also helped to make certain medical procedures or medicines accessible to more people, in turn contributing to longer life expectancies7.

4 Asia Pacific Healthcare Outlook 2012- 2015: Frost & Sullivan 5 Issues Monitor: Sharing knowledge on topical issues in the healthcare sector. KPMG 6 Independent Report on the Healthcare Industry in the Asia Pacific Region: Frost & Sullivan. Religare Health Trust IPO Prospectus 7 Report: World faces challenge as technologies lengthen life expectancies, biologist says. Stanford University 8 World Population Prospects: The 2010 Revision (population database). United Nations, Department of Economic and Social Affairs. 9 Statistical Yearbook for Asia and the Pacific 2012. United Nations, Economic and Social Commission for Asia and the Pacific. 49 Realising gOlden opportunities Uncovering growing value through sustained efforts Over the years, PLife REIT remained unwavered in its commitment to deliver value for its Unitholders. By conscientiously embarking on initiatives including yield-accretive acquisitions, asset enhancement initiatives and prudent financial risk and dynamic debt portfolio management, it continued to achieve steady financial performance in 2012. To-date, our DPU has grown by 69.2% since IPO. Annual Report FY2012 ParkwayLife REIT

FINANCIAL REVIEW On Solid Ground

Stable Revenue Growth PLife REIT’s gross revenue rose 7.2% from S$87.8 million in FY2011 to S$94.1 million in FY2012. This was primarily driven by rental revenue contribution from the three Japan nursing home properties acquired in March 2012, and strata titled units/lots at Gleneagles Intan Medical Centre, Kuala Lumpur which was acquired in August 2012. Revenue increase was also boosted by the 6.31% increase in minimum guaranteed rent from the Singapore Hospital Properties, under the CPI+1% rental review mechanism for the sixth year of lease term commencing 23 August 2012.

Net property income grew 7.6% from S$80.3 million in FY2011 to S$86.4 million in FY2012. Accordingly, distributable income increased 7.5% to S$62.4 million in FY2012. Breakdown of FY2012 Gross Revenue Growth Financial Year 2012 Gross Revenue Growth from Financial Year 2011 7.2% S$94.1 million Financial Year 2011 Gross Revenue

S$87.8 million FY2012 Investments 49.8% • Acquisition of three nursing homes in Japan • Acquisition of strata-titled units/lots at Gleneagles Intan Medical Centre, Kuala Lumpur

FY2011 Investments 0.8% • Acquisition of one nursing home in Japan

Organic Growth 49.4% • Rent review of Singapore Hospital Properties • Completion of asset enhancement initiatives

Cash Flow acquired in March 2012 and strata-titled units/lots Cash and cash equivalents for FY2012 decreased at Gleneagles Intan Medical Centre, Kuala Lumpur 15.5% from S$33.6 million in FY2011 to S$28.4 million in August 2012. It also included additional security mainly due to the depreciation of the Japanese Yen. deposits received from certain existing properties and the new properties acquired in 2012. Cash from operating activities for FY2012 increased 10.5% from S$66.8 million in FY2011 to S$73.8 million Cash outflow for investing activities for FY2012 for FY2012, mainly due to the additional operating increased substantially to S$60.6 million as compared cash flows from the three Japan nursing homes to S$11.8 million for FY2011, comprising mainly capital

51 ParkwayLife REIT Annual Report FY2012

FINANCIAL REVIEW

expenditure on existing properties as well as the acquisition costs of DPU the properties acquired in March (cents) and August 2012.

3.0 1 Cash outflow from financing +69.2% 2.69 2.7 2.58 2.562 activities for FY2012 are mainly 2.47 2.48 2.40 2.38 2.36 2.37 from distributions to Unitholders 2.4 2.25 offset by the loans drawn down 2.07 2.09 2.1 1.91 2.05 to fund the 2012 acquisitions. The 1.84 1.89 1.89 1.71 buy-back of S$35.75 million of 1.8 1.59 1.62 1.66 floating rate notes and repayment 1.5 of short term borrowings is offset 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2007 2008 2008 2008 2008 20092009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 by the drawdown of long term facility. Note: 1 Accumulated DPU payout since IPO is 45.54 cents (inclusive of 3Q 2007 pro-rated payout). 2 For FY2012, S$3 million amount available for distribution was retained for capital expenditure (S$0.75 million per quarter) Assets and Asset Valuation As at 31 December 2012, As at 31 December 2012, PLife REIT’s total debt was PLife REIT’s property portfolio S$484.1 million, with a weighted average term to comprised 37 high quality healthcare assets worth maturity of 2.45 years. Its gearing ratio of 32.9% is approximately S$1.4 billion1. well within the 60% limit set by the Monetary Authority of Singapore for property trusts in Singapore with a Net Asset Value as at 31 December 2012 was S$1.57 credit rating, representing further debt headroom of per unit. On 19 July 2012, Fitch Ratings issued S$322.9 million before reaching 45% gearing. its rating report maintaining PLife REIT’s “BBB” investment grade credit rating. Unit Price Performance Despite uncertainty and headwinds in the global Leverage and Borrowings economy over the last few years, PLife REIT’s unit PLife REIT has put in place ample funding from price had grown steadily, outperforming the STI and diversified sources to support future acquisitions the S-REIT Index. and growth opportunities, including a S$500 million Multicurrency Medium Term Note Programme This bears testament to investors’ continued established since 2008 and a four-year S$80.0 million confidence in the underlying strength and resilience of committed and unsecured revolving credit facility in PLife REIT, its growth strategies as well as the positive June 2012. long-term prospects of the regional healthcare sector.

As at 31 December 2012 1 FTSE ST: Real Estate Investment Trust Index 2 STI Index: Straits Times Index Source: Bloomberg 300.00 PLife REIT 182.89% PLife REIT S-REIT 107.95% 250.00 STI 73.09% S-REIT Index (FTSE ST)1 200.00 STI Index 2 150.00

100.00

50.00 Feb Aug Jun Aug Oct Dec Feb Aug Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec 10 10 10 10 10 10 11 11 11 11 11 11 12 12 12 12 12 12

Unit Price Statistics (1 January 2012 to 31 December 2012)

Period Open: S$1.79 (3 January 2012) Period Close: S$2.15 (31 December 2012) Period High: S$2.19 (18 October 2012) Period Low: S$1.72 (8 February 2012) Volume of Trade for the Financial Year (‘million) : 131.7

1 According to independent valuations by CB Richard Ellis (Pte Ltd), Colliers Halifax, DTZ and International Appraisals Incorporated as at 31 December 2012 and based on an exchange rate of S$1.00 to JPY70.18. 52 Annual Report FY2012 ParkwayLife REIT

Corporate Governance

Parkway Trust Management Limited, in its capacity as the Manager of PLife REIT recognises that an effective corporate governance culture is critical to the performance of the Manager and consequently, the success of PLife REIT. The Manager is firmly committed to good corporate governance and has adopted a comprehensive corporate governance framework that meets best practice principles. In particular, the Manager has an obligation to act honestly, with due care and diligence, and in the best interests of Unitholders.

The following sections describe the Manager’s main corporate governance policies and practices. They encompass proactive measures for avoiding situations of conflict and potential conflicts of interest and ensuring that applicable laws and regulations within the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”) (the “Listing Manual”), the Code on Collective Investment Schemes issued by the Monetary Authority of Singapore (“MAS”) (the “CIS Code”) including the Property Funds Appendix in Appendix 6 of the CIS Code (the “Property Funds Appendix”), the CMS Licence (defined below) and the Securities and Futures Act, Chapter 289 of Singapore (“SFA”), are complied with, and that the Manager’s obligations under PLife REIT’s Trust Deed (defined below) are properly and efficiently carried out.

THE MANAGER OF PLIFE REIT

The Manager has general powers of management over the assets of PLife REIT. The Manager’s main responsibility is to manage PLife REIT’s assets and liabilities for the benefit of Unitholders.

The Manager will set the strategic direction of PLife REIT and make recommendations to the Trustee on the acquisition, divestment and enhancement of assets of PLife REIT in accordance with its stated investment strategy.

Other main functions and responsibilities of the Manager are as follows:

1. Using its best endeavours to carry on and conduct its business in a proper and efficient manner, to ensure that the business of PLife REIT is carried on and conducted in a proper and efficient manner and to conduct all transactions with or on behalf of PLife REIT at arm’s length and on normal commercial terms;

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

3. Ensuring compliance with the applicable provisions of the SFA and all other relevant laws and regulations, the Listing Manual, the CIS Code (including the Property Funds Appendix), the CMS Licence, the Trust Deed, the tax ruling issued by the Inland Revenue Authority of Singapore on the taxation of PLife REIT and its Unitholders and all relevant contracts;

4. Attending to all regular communications with Unitholders; and

5. Provision of project management services including co-ordination of pre-qualification and tender exercises as well as project meetings, recommendation of project budget and appointment of project consultants as well as monitoring and supervising any third parties engaged to provide such services.

53 ParkwayLife REIT Annual Report FY2012

Corporate Governance

PLife REIT, constituted as a trust, is externally managed by the Manager and accordingly, it has no personnel of its own. The Manager appoints experienced and well-qualified management to handle its day-to-day operations. All directors and employees of the Manager are remunerated by the Manager, and not PLife REIT.

Parkway Trust Management Limited is appointed as manager of PLife REIT in accordance with the terms of the Trust Deed dated 12 July 2007 (as amended, the “Trust Deed”). The Trust Deed outlines certain circumstances under which the Manager can be retired in favour of a corporation approved by the Trustee or be removed by notice given in writing from the Trustee upon the occurrence of certain events.

On 1 August 2008, a new licensing regime for managers of real estate investment trusts (“REITs”) was implemented under the SFA. A person conducting REIT management activities is required to hold a capital markets services licence (“CMS Licence”) pursuant to the SFA. On 11 August 2009, the Manager obtained a CMS Licence from MAS to conduct REIT management. As a holder of a CMS Licence, the Manager is required to comply with various laws and regulations applicable to CMS Licence holders which include, among others, the SFA, the Securities and Futures (Licensing and Conduct of Business) Regulations, the Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licences) Regulations and the Securities and Futures (Disclosures of Interests) Regulations.

BOARD OF DIRECTORS

The board of directors of the Manager (the “Board’’) is responsible for the overall management and corporate governance of the Manager including establishing goals for management and monitoring the achievement of these goals. All Board members participate in matters relating to corporate governance, business operations and risks, financial performance and the nomination and review of directors. The Board has established a framework for the management of the Manager including a system of internal controls and a business risk management process.

The Board meets regularly, at least once every quarter, to deliberate the strategic policies of PLife REIT. Matters requiring the Board’s decision and approval include matters relating to investments, acquisitions and disposals, leasing, assets enhancement initiatives, operating/capital expenditure, loan or debt financing or refinancing taking into consideration PLife REIT’s commitment in terms of capital and other resources, the annual budget, the release of the quarterly and full year results, the appointment of directors and such other material transactions that require the approval of the Board. The Board also reviews the financial performance of PLife REIT against a previously approved budget, assesses the risks to the assets of PLife REIT, examines liability management, and acts upon any comments from the auditors of PLife REIT. Where necessary, additional Board meetings are held to address significant transactions or issues.

The annual calendar of the Board meeting is scheduled in advance. Board papers are dispatched to directors about a week before the scheduled meetings so that directors have sufficient time to review and consider matters being tabled and discussed at the meetings. The senior executives are also requested to attend the Board meetings to provide insights into matters being discussed and to respond to any queries from the directors.

In the discharge of its functions, the Board is supported by an Audit Committee that provides independent oversight of the Manager. The Board is also supported by a Remuneration Committee which oversees the remuneration matters of the key executives of the Manager. Each of these Board Committees operates under delegated authority of the Board.

54 Annual Report FY2012 ParkwayLife REIT

The Board has adopted a set of internal controls which it believes is adequate in safeguarding Unitholders’ interests and PLife REIT’s assets. Appropriate delegation of authority has been provided to management to facilitate operational efficiency.

Changes to regulations and accounting standards are monitored closely. To keep pace with regulatory changes where these changes have an important bearing on the Manager’s or directors’ disclosure obligations, the directors will be briefed either during Board meetings or at specially-convened sessions involving the relevant professionals. The Board may also participate in seminars and/or discussion group to keep abreast of the latest developments which are relevant to the Manager and PLife REIT. The management also provides the Board with complete and adequate information in a timely manner through regular updates on financial results, market trends and business developments.

The Board has separate and independent access to senior management and the company secretary at all times. The company secretary attends to corporate secretarial administration and attends all Board meetings. The appointment and removal of the company secretary is a Board reserved matter. The Board also has access to independent professional advice where appropriate.

Board Composition

The Board presently consists of eight members, seven of whom are non-executive directors (including three independent directors). The Chairman of the Board is Mr. Lim Kok Hoong. None of the directors has entered into any service contract directly with PLife REIT.

The composition of the Board is determined using the following principles:

1. the Chairman of the Board should be a non-executive director of the Manager;

2. the Board should comprise directors with a broad range of commercial experience, including expertise in funds management and the property industry; and

3. at least one-third of the Board should comprise independent directors.

The Board has reviewed its composition and is satisfied that the existing composition is appropriate. The majority of the directors are non-executive and/or independent of the management. This enables the management to benefit from their external, diverse and objective perspective on issues that are brought before the Board. It would also enable the Board to interact and work with the management through a robust exchange of ideas and views to help shape the strategic process. This, together with a clear separation of roles of the Chairman and Chief Executive Officer described below, provides a healthy professional relationship between the Board and the management, with clarity of roles and robust oversight as they deliberate the business activities of the Manager. The composition will be reviewed regularly to ensure that the Board has the appropriate mix of expertise and experience.

55 ParkwayLife REIT Annual Report FY2012

Corporate Governance

The latest profiles of the directors are set out on pages 12 to 15 of this Annual Report and additional information on the directors is as follows:

Directorships or chairmanships both present and those held over the Academic and preceding three years in Date of professional other listed companies and Name of director appointment Function(s) qualifications other major appointments

Lim Kok Hoong 5/7/2007 Non-executive/ Bachelor of Hoe Leong Corporation Ltd, Age: 65 Independent Commerce, Genting Singapore PLC, Director, Chairman Chartered Global Logistics Properties of Board and Accountant, Ltd, Member of Audit Australia, CPA Amtek Engineering Ltd, Committee Singapore Sabana Real Estate Investment Management Pte Ltd

Puah Tuan Soon 5/7/2007 Non-executive/ B. Sc (Hons) – The Esplanade Co Ltd, Benson Independent Hotel, Catering SISTIC.com Pte Ltd, Age: 55 Director, Chairman & Tourism Ascendas Hospitality Fund of Remuneration Administration Management Pte Ltd, Committee and Ascendas Hospitality Trust Member of Audit Management Pte Ltd, Committee National Arts Council, The National Art Gallery Singapore Company Limited

Tan Bong Lin 5/7/2007 Non-executive/ Bachelor of - Age: 56 Independent Accountancy Director, Chairman of Audit Committee and Member of Remuneration Committee

Dr. Lim Cheok Peng 23/4/2007 Non-executive MBBS, M. Med. Managing Director of IHH Age: 66 Director Int. Med., MRCP, Healthcare Berhad, FRCP (Edin), FRCP Managing Director of Parkway (Glasg), FAMS Holdings Limited, (Cardiology) Executive Vice Chairman of Parkway Holdings Limited, Vice Chairman of Parkway Holdings Limited, Vice Chairman of Parkway Pantai Limited

Dr. Tan See Leng 21/6/2011 Non-executive MBBS, MMed, Executive Director of IHH Age: 48 Director and FCFPS, MBA Healthcare Berhad, Member of (ChicagoBooth) Parkway Holdings Limited, Remuneration Managing Director of Parkway Committee Pantai Limited, Trustee and Director of CFPS Holdings Pte Ltd, Vice President of College of Family Physicians Singapore

56 Annual Report FY2012 ParkwayLife REIT

Ahmad Shahizam Bin 21/6/2011 Non-executive LL.B (Hons), IHH Healthcare Berhad, Mohd Shariff Director Master in Public Parkway Pantai Limited, Age: 42 Administration Parkway Holdings Limited, Pantai Holdings Berhad

Tan See Haw 9/1/2009 Non-executive B.ACC, - Age: 56 Director Fellow Certified Public Accountant

Yong Yean Chau 29/1/2009 Executive Director/ B.ACC (Hons), Hiap Tong Corporation Ltd Age: 46 Chief Executive Fellow Certified Officer Public Accountant

Meeting Attendance

The Manager held 4 Board meetings during the financial year. The attendance at the Board meetings is set out below.

Name of director Board meetings attended

Lim Kok Hoong (Chairman) 4 Dr. Lim Cheok Peng 4 Puah Tuan Soon Benson 4 Tan Bong Lin 4 Tan See Haw 4 Yong Yean Chau 4 Dr. Tan See Leng 4 Ahmad Shahizam Bin Mohd Shariff 3

Chairman and Chief Executive Officer

The positions of Chairman and Chief Executive Officer are separately held by two persons in order to maintain an effective check and balance. The Chairman of the Board, Mr. Lim Kok Hoong is an independent director. The Chief Executive Officer is Mr. Yong Yean Chau who is also an executive director of the Manager. The Chairman and the Chief Executive Officer are not immediate family members and are not related to each other.

There is a clear separation of the roles and responsibilities between the Chairman and the Chief Executive Officer. The Chairman is responsible for the overall management of the Board as well as ensuring that the directors and the management work together with integrity and competency and that the Board engages the management in constructive debate on strategy, business operations, enterprise risk and other plans.

The Chief Executive Officer has full executive responsibilities over the business directions and operational decisions in the day to day management of PLife REIT.

57 ParkwayLife REIT Annual Report FY2012

Corporate Governance

Independent Directors

The Board has three independent directors, namely Mr. Puah Tuan Soon Benson, Mr. Tan Bong Lin and Mr. Lim Kok Hoong. The criterion of independence is based on the definition given in the Code of Corporate Governance 2012. The Board considers an “independent” director as one who has no relationship with the Manager and PLife REIT, its related corporations, its 10% shareholders or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the director’s independent business judgment with a view to the best interest of the Manager and PLife REIT.

Mr. Puah Tuan Soon Benson, Mr. Tan Bong Lin and Mr. Lim Kok Hoong have confirmed their independence as directors of the Manager.

Non-executive Directors

Non-executive directors exercise no management functions in the Manager or PLife REIT or any of its subsidiaries. Although all the directors have equal responsibility for the performance of the Manager and PLife REIT, the role of the non-executive directors is particularly important in ensuring that the performance of management in meeting agreed goals and objectives is reviewed and the reporting of performance is monitored; and the strategies proposed by the management are fully discussed and rigorously examined, taking into account the long-term interests of PLife REIT’s assets and the Unitholders.

Board Performance

A review of the Board’s performance is conducted annually to assess the effectiveness of the Board. The review of the Board’s performance includes the Board composition, access to information, procedures, accountability and standards of conduct, skills and any specific areas where improvement may be made. Directors are required to complete a questionnaire evaluating the Board. The feedback and comments from the Directors will be reviewed and discussed by the Board collectively.

Remuneration Committee

The directors’ fees and remuneration of staff of the Manager are paid in its own capacity using its own funds and fees received from PLife REIT and not from the funds of PLife REIT. As PLife REIT does not bear the remuneration of the Manager’s Board and staff, the Manager does not consider it necessary to include a report on remuneration of its directors and key executives.

The Remuneration Committee is responsible for:

(a) recommending to the Board a framework of remuneration for key executives, and to determine specific remuneration packages for each executive director and the Chief Executive Officer covering all aspects of remuneration including but not limited to director’s fees, salaries, allowances, bonuses, options, and benefits in kind;

(b) reviewing the appropriateness of remuneration awarded to attract, retain and motivate the senior executives and executive director (the “Executives”) needed to run the Manager and PLife REIT successfully;

(c) reviewing the pay and employment conditions within the industry and those of the peer companies to ensure that the Executives are adequately remunerated;

(d) reviewing the adequacy and form of remuneration to the Executives to ensure that the remuneration realistically commensurate with the responsibilities and risks involved in being an effective member;

(e) considering the eligibility of the Executives for benefits under long-term incentive schemes and the administration thereof; and

(f) reviewing the use of long-term incentives, including share schemes, for the Executives.

58 Annual Report FY2012 ParkwayLife REIT

The members of the Remuneration Committee do not participate in any decisions concerning their own remuneration.

The Remuneration Committee shall ensure that non-executive directors should not be over-compensated to the extent that their independence may be compromised. Further, the Remuneration Committee shall have the authority to consult experts (inside and/or outside the Manager) on the remuneration of all directors, if considered necessary.

The Manager held one Remuneration Committee meeting during the financial year. The attendance at the Remuneration Committee meeting is set out below.

Name of director Remuneration Committee meetings attended

Puah Tuan Soon Benson (Chairman) 1 Tan Bong Lin 1 Tan See Haw* 1 Dr. Tan See Leng# -

* Resigned on 1 August 2012 # Appointed on 1 August 2012

The Remuneration Committee, which was set up on 7 May 2009, currently comprises Mr. Puah Tuan Soon Benson as Chairman and Mr. Tan Bong Lin and Dr. Tan See Leng (effective 1 August 2012) as members. Dr. Tan See Leng is appointed as a member of the Remuneration Committee in place of Mr. Tan See Haw with effect from 1 August 2012. All these directors are non-executive and/or independent.

Audit Committee

The Audit Committee is appointed by the Board from among the directors of the Manager and is composed of three members, all of whom (including the Chairman of the Audit Committee) are independent non-executive directors. The members of the Audit Committee are Mr. Lim Kok Hoong, Mr. Puah Tuan Soon Benson and Mr. Tan Bong Lin. Mr. Tan Bong Lin has been appointed as the Chairman of the Audit Committee.

The role of the Audit Committee is to monitor and evaluate the adequacy of the Manager’s internal controls and the effectiveness of the Manager’s internal audit function. The Audit Committee also reviews the quality and reliability of information prepared for inclusion in the financial reports and statements, and is responsible for the nomination of external auditors and reviewing the adequacy of external audits in respect of cost, scope and performance.

In appointing the audit firms for the Group, the Audit Committee is satisfied that PLife REIT has complied with the Listing Rules 712 and 715 of the Listing Manual.

The Audit Committee’s responsibilities also include:

(a) monitoring the procedures established to regulate related party transactions, including ensuring compliance with the provisions of the Listing Manual relating to “interested person transactions” and the provisions of the Property Funds Appendix relating to “interested party transactions”;

(b) reviewing arrangements by which employees of the Manager may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters and ensuring that arrangements are in place for the independent investigation of such matters and for appropriate follow-up action;

(c) reviewing external and internal audit reports to ensure that where deficiencies in internal controls have been identified, appropriate and prompt remedial action is taken by the management;

59 ParkwayLife REIT Annual Report FY2012

Corporate Governance

(d) reviewing internal audit reports at least twice a year to ascertain that the guidelines and procedures established to monitor related party transactions have been complied with;

(e) ensuring that the internal audit function is adequately resourced and has appropriate standing within the Manager;

(f) monitoring the procedures in place to ensure compliance with applicable legislation, the Listing Manual and the CIS Code including the Property Funds Appendix;

(g) reviewing the nature and extent of non-audit services performed by external auditors;

(h) reviewing, on an annual basis, the independence and objectivity of the external auditors;

(i) meeting with external and internal auditors, without the presence of the Executives at least annually;

(j) examining the effectiveness of financial, operational and compliance controls at least annually;

(k) reviewing the significant financial reporting issues and judgments so as to ensure the integrity of the financial statements of PLife REIT and any formal announcements relating to PLife REIT’s financial performance;

(l) investigating any matters within the Audit Committee’s terms of reference, whenever it deems necessary; and

(m) reporting to the Board on material matters, findings and recommendations.

The Audit Committee has conducted a review of all non-audit services provided by the external auditors and is satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors. For FY2012, the aggregate amount of audit fees paid and payable by PLife REIT to the external auditors was S$346,000, comprising non-audit service fees of S$119,000 and audit service fees of S$227,000.

Audit Committee meetings are generally held after the end of every quarter of every financial year. The attendance at the Audit Committee meetings is set out below.

Name of director Audit Committee meetings attended

Tan Bong Lin (Chairman) 4 Lim Kok Hoong 4 Puah Tuan Soon Benson 3

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

Internal Audit

The Manager has put in place a system of internal controls of procedures, including financial, operational, compliance and information technology controls, and risk management systems to safeguard PLife REIT’s assets, Unitholders’ interests as well as to manage risk.

The internal audit function of the Manager is out-sourced to an independent assurance service provider. The Audit Committee is satisfied that the internal auditor has met the standards established by internationally recognised professional bodies including the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors. The internal auditor reports directly to the Audit Committee on audit matters. The Audit Committee also reviews and approves the annual internal audit plan and reviews the internal audit reports and activities. The Audit Committee is of the view that the internal auditor has adequate resources to perform its functions and has to the best of its ability, maintained its independence from the activities that it audits.

60 Annual Report FY2012 ParkwayLife REIT

Internal Controls and Risk Management

The Board acknowledges that it is responsible for the overall internal control framework and the maintenance of a sound system of internal controls. The system includes, inter alia, enterprise risk management and internal auditing. However, the Board recognises that no cost effective internal control system and risk management will preclude all errors and irregularities, as a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss.

To ensure a robust risk management system is maintained, the Manager, with concurrence of the Audit Committee, has engaged external risk consultant to assist the Manager to systematically roll out the Enterprise Risk Management (“ERM”) process and framework, including establishing the ERM Committee which comprises senior management personnel from the operational, financial and technical areas. The responsibilities of the ERM Committee include the overseeing of matters relating to the management of risks. Any material non-compliance and internal control weakness, together with the recommendations to address them, the mitigating controls or gaps (if any) are also presented to the Audit Committee and the Board accordingly.

The system of risk management is embedded in the internal control system of the Manager to address on-going changes and challenges and to reduce uncertainties to PLife REIT. The ERM Committee, assisted by the external risk consultant, will ensure the adequacy and efficiency of the internal controls. As such, the internal control system will also assist the Board and the Audit Committee in compliance with the Code of Corporate Governance and the Listing Manual. The Audit Committee and the Board will review the adequacy and efficiency of the risk management system and internal controls on an annual basis.

The internal control and risk management functions conducted by the auditors and the ERM Committee respectively are evaluated by the Manager’s key executives, and are reported to the Audit Committee for review. Based on the up-to-date evaluation of the controls by the auditors and the ERM Committee, the Chief Executive Officer and the Chief Financial Officer of the Manager provide an assurance to the Board that the financial records of PLife REIT have been properly maintained and the financial statements give a fair view of the operations and finances of PLife REIT, and the Manager’s internal controls are effective and adequate for the year under review.

Nonetheless, the Audit Committee will:

(a) satisfy itself, by such means as it shall consider appropriate, that adequate counter measures (i.e. mechanisms and processes, such as sound internal control and risk management systems) are in place to identify and mitigate any material business risks associated with the Manager and PLife REIT;

(b) ensure that a review of the effectiveness and adequacy of the Manager’s internal controls, including financial, operational, compliance and information technology controls, and risk management policies and systems, is conducted at least annually. Such review can be carried out by internal auditors, external auditors and/or the ERM Committee;

(c) ensure that the internal control recommendations made by internal auditors, external auditors and/or the ERM Committee have been implemented by the Manager; and

(d) ensure that the Board is in a position to comment on the adequacy of the internal controls of the Manager.

Based on the Audit Committee’s review, the Board with the concurrence of the Audit Committee is of the opinion that there are adequate internal controls including financial, operational, compliance and information technology controls and risk management systems in the Manager.

61 ParkwayLife REIT Annual Report FY2012

Corporate Governance

DEALINGS IN PLIFE REIT’S UNITS

The Trust Deed requires each director to give notice to the Manager of his acquisition of units or of changes in the number of units which he holds or in which he has an interest, within two business days after such acquisition or the occurrence of the event giving rise to changes in the number of units which he holds or in which he has an interest. This is in line with the requirements of the new Section 137Y of the SFA (relating to notification of unitholdings by directors and Chief Executive Officer of the Manager) which comes into effect on 19 November 2012. The Chief Executive Officer of the Manager is also required to give similar notice under the new section.

All dealings in units by the directors and the Chief Executive Officer will be announced via SGXNET, with the announcement to be posted on the SGX-ST website at http://www.sgx.com.

The directors and employees of the Manager are encouraged, as a matter of internal policy, to hold units but are prohibited from dealing in the units:

(a) in the period commencing one month before the public announcement of PLife REIT’s annual results and (where applicable) property valuations and two weeks before the public announcement of PLife REIT’s quarterly results, and ending on the date of announcement of the relevant results, or as the case may be, property valuations; and

(b) at any time while in possession of price sensitive information.

The directors and employees of the Manager have been directed to refrain from dealing in units on a short term basis.

In addition, the Manager has undertaken that it will not deal in the units during the period commencing one month before the public announcement of PLife REIT’s annual results and (where applicable) property valuations and two weeks before the public announcement of PLife REIT’s quarterly results, and ending on the date of announcement of the relevant results or, as the case may be, property valuations.

Further, the new Section 137ZC of the SFA (relating to notification of unitholdings by responsible persons) which comes into effect on 19 November 2012 requires the Manager to, inter alia, announce via SGXNET the particulars of any acquisition or disposal of interest in PLife REIT’s units by the Manager no later than the end of the business day following the day on which the Manager became aware of the acquisition or disposal.

RISK ASSESMENT AND MANAGEMENT OF BUSINESS RISK

Effective risk management is a fundamental part of PLife REIT’s business operations. Recognising and managing risk is central to the business and to protecting Unitholders’ interests and value. PLife REIT operates within overall guidelines and specific parameters set by the Board. Each transaction is comprehensively analysed to understand the risk involved. Responsibility for managing risk lies initially with the business unit concerned, working within the overall strategy outlined by the Board.

The Board meets quarterly (or more often, if necessary) and will review the financial performance of the Manager and PLife REIT against a previously approved budget. The Board will also review the business risks of PLife REIT, examine liability management and will act upon any comments from the auditors of PLife REIT.

As a result of the new licensing regime, the Manager, as a holder of a CMS Licence, has established internal procedures to ensure compliance with the relevant laws, regulations and guidelines relating to anti-money laundering and countering the financing of terrorism and has also adopted procedures to ensure that all material outsourcing comply with the MAS’ Guidelines on Outsourcing issued in October 2004 and last updated on 1 July 2005.

62 Annual Report FY2012 ParkwayLife REIT

The Manager has appointed experienced and well-qualified management personnel to handle the day-to-day operations of the Manager and PLife REIT. In assessing business risks, the Board will consider the economic environment and risks relevant to the property and healthcare industry. It reviews management reports and feasibility studies on investment risks prior to approving all investment decisions. The management meets regularly to review the operations of the Manager and discuss any disclosure issues.

WHISTLE-BLOWER PROTECTION POLICY

The Manager has established a whistle-blower policy which reflects the Manager’s commitment to conduct its business within a framework that fosters the highest ethical and legal standards. In line with this commitment and PLife REIT’s commitment to open communications, the whistle-blower policy aims to provide an avenue for employees to raise concerns and reassurance that they will be protected from reprisals or victimisation for whistle-blowing in good faith. The Audit Committee reviewed the whistle-blower policy which provides for mechanisms by which employees may, in confidence, raise their concerns about possible improprieties in financial reporting or other matters and was satisfied that arrangements are in place for the independent investigation of such matters and for appropriate follow-up action. The Chairman of the Audit Committee is the first contact for issues raised under this policy.

DEALINGS WITH CONFLICTS OF INTEREST

The Manager has instituted the following procedures to deal with potential conflicts of interest issues:

(a) The Manager will be a dedicated manager to PLife REIT and will not manage any other REIT which invests in the same type of properties as PLife REIT.

(b) All resolutions in writing of the Board in relation to matters concerning PLife REIT must be approved by a majority of the directors, including at least one independent director.

(d) All related party transactions must be reviewed by the Audit Committee and approved by a majority of the Audit Committee. If a member of the Audit Committee has an interest in a transaction, he or she will abstain from voting.

(e) In respect of matters in which Parkway Holdings Limited, the sponsor of PLife REIT (the “Sponsor”) and/or its subsidiaries have an interest, direct or indirect, any nominees appointed by the Sponsor and/or its subsidiaries to the Board to represent its/their interest will abstain from voting. In such matters, the quorum must comprise a majority of the independent directors and must exclude the nominee directors of the Sponsor and/or its subsidiaries.

(f) In respect of matters in which a director or his associates have an interest, direct or indirect, such interested director will abstain from voting. In such matters, the quorum must comprise a majority of the Board and must exclude such interested director.

(g) Under the Trust Deed, the Manager and its associates are prohibited from being counted in a quorum for or voting at any meeting of Unitholders convened to approve any matter in which the Manager or any of its associates has a material interest. For so long as Parkway Trust Management Limited is the manager of PLife REIT, the controlling shareholders (as defined in the Listing Manual) of the Manager and their respective associates are prohibited from being counted in the quorum for or voting at any meeting of Unitholders convened to consider a matter in respect of which the relevant controlling shareholders of Parkway Trust Management Limited and/or their associates have a material interest.

63 ParkwayLife REIT Annual Report FY2012

Corporate Governance

(h) It is also provided in the Trust Deed that if the Manager is required to decide whether or not to take any action against any person in relation to any breach of any agreement entered into by the Trustee for and on behalf of PLife REIT with a related party of the Manager, the Manager shall be obliged to consult with a reputable law firm (acceptable to the Trustee) which shall provide legal advice on the matter. If the said law firm is of the opinion that the Trustee, on behalf of PLife REIT, has a prima facie case against the party allegedly in breach under such agreement, the Manager shall be obliged to take appropriate action in relation to such agreement. The Board (including its independent directors) will have a duty to ensure that the Manager so complies. Notwithstanding the foregoing, the Manager shall inform the Trustee as soon as it becomes aware of any breach of any agreement entered into by the Trustee for and on behalf of PLife REIT with a related party of the Manager and the Trustee may take such action as it deems necessary to protect the rights of Unitholders and/or which is in the interests of Unitholders. Any decision by the Manager not to take action against a related party of the Manager shall not constitute a waiver of the Trustee’s right to take such action as it deems fit against such related party.

PLife REIT’s properties are located in Singapore, Japan and Malaysia and its strategy is to invest primarily in income- producing real estate and/or real estate-related assets in the Asia-Pacific region (including Singapore) that are used primarily for healthcare and/or healthcare-related purposes (including, but not limited to, hospitals, healthcare facilities and real estate and/or real estate assets used in connection with healthcare research, education, and the manufacture or storage of drugs, medicine and other healthcare goods and devices), whether wholly or partially owned, and whether directly or indirectly held through the ownership of special purpose vehicles whose primary purpose is to own such real estate. The Sponsor has interests in several healthcare and/or healthcare-related properties in the Asia-Pacific region such as those located in Malaysia. Potential conflicts of interest between the Sponsor and PLife REIT may arise in respect of acquisition and ownership of healthcare and/or healthcare-related assets in the Asia-Pacific region, including Singapore where PLife REIT’s initial properties are located, and where PLife REIT’s investment strategy is to invest in healthcare and/or healthcare-related properties located therein.

In order to mitigate any conflict of interest between the Sponsor and PLife REIT in the Asia-Pacific region, the Audit Committee will, during the course of its review of transactions to be entered into by PLife REIT in the future, take into account the expiry of the right of first refusal granted by the Sponsor, together with any other relevant factors that may arise during the assessment process and arrive at its view based on all relevant factors. The existing internal control systems on dealings with conflict of interest will be reviewed periodically to ascertain its effectiveness and suitability and further measures will be considered and implemented to fine-tune the internal control procedures to deal with potential conflicts of interest issues.

In addition, the nominee directors appointed by the Sponsor to the Board are committed not to disclose to the Sponsor information concerning offers to PLife REIT in respect of potential acquisition of new properties as well as offers made by PLife REIT in respect of the potential acquisition of new properties, save for properties which the nominee directors are in a position to confirm that the Sponsor has no intention of acquiring.

The Manager has also established a conflict of interest policy for its employees to ensure that any conflict of interest or potential conflicts of interest are disclosed and approvals are sought where required.

RELATED PARTY TRANSACTIONS

The Manager’s Internal Control System

The Manager has established an internal control system to ensure that all future related party transactions will be undertaken on normal commercial terms and will not be prejudicial to the interests of PLife REIT or the Unitholders. As a general rule, the Manager must demonstrate to the Audit Committee that such transactions satisfy the foregoing criteria, which may entail obtaining (where practicable) quotations from parties unrelated to the Manager, or obtaining one or more valuations from independent professionals valuers (in accordance with the Property Funds Appendix).

64 Annual Report FY2012 ParkwayLife REIT

The Manager maintains a register to record all related party transactions which are entered into by PLife REIT and the bases, including any quotations from unrelated parties and independent valuations obtained to support such bases, on which they are entered. The Manager also incorporates into its internal audit plan a review of all related party transactions entered into by PLife REIT. The Audit Committee reviews the internal audit reports at least twice a year to ascertain that the guidelines and procedures established to monitor related party transactions have been complied with. In addition, the Trustee will also have the right to review such audit report to ascertain that the Property Funds Appendix have been complied with.

Further, the following procedures will be undertaken:

– transactions (either individually or as part of a series or if aggregated with other transactions involving the same related party during the same financial year) equal to or exceeding S$100,000 in value but below 3.0% of the value of PLife REIT’s net tangible assets will be subject to review by the Audit Committee at regular intervals;

– transactions (either individually or as part of a series or if aggregated with other transactions involving the same related party during the same financial year) equal to or exceeding 3.0% but below 5.0% of the value of PLife REIT’s net tangible assets will be subject to the review and prior approval of the Audit Committee. Such approval shall only be given if the transactions are on normal commercial terms and are consistent with similar types of transactions made by the Trustee with third parties which are unrelated to the Manager; and

– transactions (either individually or as part of a series or if aggregated with other transactions involving the same related party during the same financial year) equal to or exceeding 5.0% of the value of PLife REIT’s net tangible assets will be reviewed and approved prior to such transactions being entered into, on the basis described in the preceding paragraph, by the Audit Committee which may, as it deems fit, request advice on the transaction from independent sources or advisers, including the obtaining of valuations from independent professional valuers. Further, under the Listing Manual and the Property Funds Appendix, such transactions would have to be approved by the Unitholders at a meeting of Unitholders.

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

PLife REIT will, in compliance with Rule 905 of the Listing Manual, announce any interested person transaction if such transaction, by itself or when aggregated with other interested person transactions entered into with the same interested person during the same financial year, is 3.0% or more of PLife REIT’s latest audited net tangible assets.

The Manager also discloses in the Annual Report the aggregate value of the related party transactions entered during the relevant financial year as required under the Listing Manual and the Property Funds Appendix.

Role of the Audit Committee for Related Party Transactions

All related party transactions must be reviewed by the Audit Committee and approved by a majority of the Audit Committee to ensure compliance with the Manager’s internal control system and with the relevant provisions of the Listing Manual as well as the Property Funds Appendix. The review will include the examination of the nature of the transactions and its supporting documents or such other data deemed necessary to the Audit Committee.

65 ParkwayLife REIT Annual Report FY2012

Corporate Governance

If a member of the Audit 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.

COMMUNICATION WITH UNITHOLDERS

The Listing Manual of the SGX-ST requires that a listed entity discloses to the market matters that would likely have a material effect on the price of the entity’s securities. The Manager upholds a strong culture of continuous disclosure and transparent communication with Unitholders and the investing community. The Manager’s disclosure policy requires timely and full disclosure of all material information relating to PLife REIT by way of public releases or announcements through the SGX-ST via SGXNET at first instance and then including the release on PLife REIT’s website atwww.plifereit.com .

The Manager also conducts regular briefings for analysts and media representatives. During these briefings, the Manager will review PLife REIT’s most recent performance as well as discuss the business outlook for PLife REIT. In line with the Manager’s objective of transparent communication, briefing materials are released to the SGX-ST and also made available on PLife REIT’s website.

It is the aim of the Board to provide the Unitholders with a balanced and comprehensive assessment of PLife REIT’s performance, position and prospects. The Unitholders are encouraged to attend annual general meeting (“AGM”) of PLife REIT to ensure a high level of accountability and to stay informed of the strategies and goals of PLife REIT. The chairpersons of the Audit Committee and/or the Remuneration Committee and external auditors should, where possible, also be present to assist the directors in addressing any relevant queries by Unitholders.

The notice of AGM is dispatched to the Unitholders in the manner set out in the Listing Manual. The Board welcomes questions from the Unitholders who have an opportunity to raise issues either informally or formally before or at the AGM.

Each item of special business included in the notice of AGM is accompanied, where appropriate, by an explanation for the proposed resolution. Separate resolutions are prepared for substantially separate issue at the AGM. The resolutions approved in the AGM will be announced on or after the day AGM is held.

As encouraged by SGX-ST and in support of the greater transparency of voting in AGM and good corporate governance, the Manager has employed electronic polling since the last AGM whereby all resolutions are voted by poll and detailed results showing the number of votes cast for and against each resolution and the respective percentage are published at the meeting. The votes cast by each Unitholder are in direct proportion to their respective unitholdings in PLife REIT.

66 Annual Report FY2012 ParkwayLife REIT

FINANCIAL CONTENTS

68 Report of the Trustee 69 Statement by the Manager 70 Auditors’ Report 71 Statements of Financial Position 72 Statements of Total Return 73 Distribution Statements 75 Statements of Movements in Unitholders’ Funds 76 Portfolio Statements 86 Consolidated Statement of Cash Flows 88 Notes to the Financial Statements 131 Additional Information 132 Statistics of Unitholdings 136 Notice of Annual General Meeting Proxy Form

67 ParkwayLife REIT Annual Report FY2012

Report of the Trustee

HSBC Institutional Trust Services (Singapore) Limited (the “Trustee”) is under a duty to take into custody and hold the assets of Parkway Life Real Estate Investment Trust (the “Trust”) and its subsidiaries (the “Group”) in trust for the holders (“Unitholders”) of units in the Trust (the “Units”). In accordance with the Securities and Futures Act (Cap. 289) of Singapore, its subsidiary legislation and the Code on Collective Investment Scheme, the Trustee shall monitor the activities of Parkway Trust Management Limited (the “Manager”) for compliance with the limitations imposed on the investment and borrowing powers as set out in the trust deed dated 12 July 2007 (as amended) (the “Trust Deed”), between the Trustee and the Manager in each annual accounting period and report thereon to Unitholders in an annual report.

To the best knowledge of the Trustee, the Manager has, in all material respects, managed the Trust during the year covered by these financial statements, set out on pages 71 to 130, in accordance with the limitations imposed on the investment and borrowing powers set out in the Trust Deed.

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

Antony Wade Lewis Director

20 March 2013

68 Annual Report FY2012 ParkwayLife REIT

Statement by the Manager

In the opinion of the directors of Parkway Trust Management Limited, the accompanying financial statements set out on pages 71 to 130 comprising the statements of financial position, statements of total return, distribution statements, statements of movements in Unitholders’ funds and portfolio statements of the Group and of the Trust, cash flow statement of the Group and a summary of significant accounting policies and other explanatory notes, are drawn up so as to present fairly, in all material respects, the financial position and the portfolio of Parkway Life Real Estate Investment Trust (the “Trust”) and its subsidiaries (the “Group”) and of the Trust as at 31 December 2012, the total returns, distributable income, movements in Unitholders’ funds of the Group and the Trust and cash flows of the Group for the year then ended in accordance with the recommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Certified Public Accountants of Singapore and the provisions of the Trust Deed. At the date of this statement, there are reasonable grounds to believe that the Group and the Trust will be able to meet its financial obligations as and when they materialise.

For and on behalf of the Manager, Parkway Trust Management Limited

Yong Yean Chau Director

20 March 2013

69 ParkwayLife REIT Annual Report FY2012

Auditors’ Report to the Unitholders of Parkway Life Real Estate Investment Trust (Constituted in the Republic of Singapore pursuant to a trust deed dated 12 July 2007)

We have audited the accompanying financial statements of Parkway Life Real Estate Investment Trust (the “Trust”) and its subsidiaries (the “Group”), which comprise the Statements of Financial Position and Portfolio Statements of the Group and the Trust as at 31 December 2012, and the Statements of Total Return, Distribution Statements and Statements of Movements in Unitholders’ Funds of the Group and the Trust and Statements of Cash Flows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 71 to 130.

Manager’s responsibility for the financial statements The Manager of the Trust is responsible for the preparation and fair presentation of these financial statements in accordance with the recommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Certified Public Accountants of Singapore, and for such internal control as the Manager of the Trust determines is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error.

Auditors’ responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about 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 judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, theauditor considers internal control relevant to the Trust’s preparation 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 Trust’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Manager of the Trust, as well as evaluating the overall presentation of the financial statements.

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 consolidated financial statements of the Group and the financial statements of the Trust present fairly, in all material respects, the financial position of the Group and of the Trust as at 31 December 2012, and the total return, distributable income and movements in Unitholders’ funds of the Group and the Trust and cash flows of the Group for the year then ended in accordance with the recommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Certified Public Accountants of Singapore.

KPMG LLP Public Accountants and Certified Public Accountants

Singapore 20 March 2013

70 Annual Report FY2012 ParkwayLife REIT

Statements of financial position As at 31 December 2012

Group Trust Note 2012 2011 2012 2011 $’000 $’000 $’000 $’000

Non-current assets Investment properties 4 1,427,331 1,384,032 980,400 924,000 Interests in subsidiaries 5 – – 428,554 382,356 Security deposit receivable 855 1,004 – – Financial derivatives 6 2,229 – 2,229 – 1,430,415 1,385,036 1,411,183 1,306,356

Current assets Financial derivatives 6 105 – 105 – Trade and other receivables 7 9,221 8,393 8,069 7,135 Cash and cash equivalents 8 30,598 36,184 2,470 6,063 39,924 44,577 10,644 13,198

Total assets 1,470,339 1,429,613 1,421,827 1,319,554

Current liabilities Financial derivatives 6 39 – 39 – Trade and other payables 9 13,084 12,757 7,696 7,191 Current portion of security deposits 1,948 2,129 – – Loans and borrowings 10 14,250 5,800 14,250 5,800 29,321 20,686 21,985 12,991

Non-current liabilities Financial derivatives 6 1,288 4,063 1,288 4,063 Non-current portion of security deposits 13,722 13,227 – – Loans and borrowings 10 467,422 489,181 467,422 489,181 Deferred tax liabilities 11 7,232 6,280 – – 489,664 512,751 468,710 493,244

Total liabilities 518,985 533,437 490,695 506,235

Net assets 951,354 896,176 931,132 813,319

Represented by: Unitholders’ funds 12 951,354 896,176 931,132 813,319

Units in issue (’000) 13 605,002 604,970 605,002 604,970

Net asset value per unit ($) 1.57 1.48 1.54 1.34

The accompanying notes form an integral part of these financial statements.

71 ParkwayLife REIT Annual Report FY2012

Statements of total return Year ended 31 December 2012

Group Trust Note 2012 2011 2012 2011 $’000 $’000 $’000 $’000

Gross revenue 14 94,074 87,763 73,763 69,484 Property expenses 15 (7,648) (7,455) (3,050) (3,051) Net property income 86,426 80,308 70,713 66,433 Manager’s management fees 16 (8,273) (7,724) (8,273) (7,724) Trust expenses 17 (2,250) (2,771) (1,730) (1,891) Interest income 10 18 4 13 Finance costs 18 (8,647) (8,861) (8,647) (8,861) Foreign exchange (loss)/gain, net (258) 414 68,161 (24,277) (19,418) (18,924) 49,515 (42,740) Total return before changes in fair value of financial derivatives and investment properties 67,008 61,384 120,228 23,693 Net change in fair value of financial derivatives 4,830 (399) 4,830 (399) Net change in fair value of investment properties 49,718 46,533 53,493 43,513 Total return before income tax 121,556 107,518 178,551 66,807 Income tax expense 19 (6,145) (5,479) – – Total return for the year 115,411 102,039 178,551 66,807

Earnings per unit (cents)

Basic and diluted 20 19.08 16.87 29.51 11.04

The accompanying notes form an integral part of these financial statements.

72 Annual Report FY2012 ParkwayLife REIT

Distribution statements Year ended 31 December 2012

Group Trust Note 2012 2011 2012 2011 $’000 $’000 $’000 $’000 Amount available for distribution to Unitholders at beginning of the year 14,943 14,425 14,943 14,425 Total return for the year 115,411 102,039 178,551 66,807 Distribution adjustments A (50,752) (43,988) (113,892) (8,756) Rollover adjustment 746 – 746 – Amount retained for capital expenditure (3,000) – (3,000) – Income for the year available for distribution to Unitholders B 62,405 58,051 62,405 58,051

Amount available for distribution to Unitholders 77,348 72,476 77,348 72,476

Distributions to Unitholders during the year: - Distribution of 2.38 cents per unit for period from 1 October 2010 to 31 December 2010 – 14,398 – 14,398 - Distribution of 2.36 cents per unit for period from 1 January 2011 to 31 March 2011 – 14,278 – 14,278 - Distribution of 2.37 cents per unit for period from 1 April 2011 to 30 June 2011 – 14,338 – 14,338 - Distribution of 2.40 cents per unit for period from 1 July 2011 to 30 September 2011 – 14,519 – 14,519 - Distribution of 2.47 cents per unit for period from 1 October 2011 to 31 December 2011 14,943 – 14,943 – - Distribution of 2.56 cents per unit for period from 1 January 2012 to 31 March 2012 15,487 – 15,487 – - Distribution of 2.48 cents per unit for period from 1 April 2012 to 30 June 2012 15,003 – 15,003 – - Distribution of 2.58 cents per unit for period from 1 July 2012 to 30 September 2012 15,609 – 15,609 – 61,042 57,533 61,042 57,533 Amount available for distribution to Unitholders at end of the year 16,306 14,943 16,306 14,943

The accompanying notes form an integral part of these financial statements.

73 ParkwayLife REIT Annual Report FY2012

Distribution statements Year ended 31 December 2012

Note A – Distribution adjustments comprise:

Group Trust 2012 2011 2012 2011 $’000 $’000 $’000 $’000

Non-tax deductible/(non-taxable) items: Trustee’s fees 265 254 265 254 Amortisation of transaction costs relating to debt facilities 908 758 908 758 Net overseas income not distributed to the Trust – – 11,293 9,080 Foreign exchange loss/(gain), net 175 (863) (68,438) 24,010 Others 403 253 403 256 Net change in fair value of financial derivatives (4,830) 399 (4,830) 399 Net change in fair value of investment properties (net of deferred tax liabilities) (47,673) (44,789) (53,493) (43,513) Net effect of distribution adjustments (50,752) (43,988) (113,892) (8,756)

Note B – Income for the year available for distribution to Unitholders

Group Trust 2012 2011 2012 2011 $’000 $’000 $’000 $’000

Unitholders’ distributions: - from operations 54,165 48,971 54,165 48,971 - from Unitholders’ contributions 8,240 9,080 8,240 9,080 Total Unitholders’ distributions 62,405 58,051 62,405 58,051

The accompanying notes form an integral part of these financial statements.

74 Annual Report FY2012 ParkwayLife REIT

Statements of movements in Unitholders’ funds Year ended 31 December 2012

Group Trust 2012 2011 2012 2011 $’000 $’000 $’000 $’000

Unitholders’ funds at beginning of year 896,176 852,950 813,319 804,487

Operations Total return for the year 115,411 102,039 178,551 66,807

Unitholders’ transactions Issue of new units: - Manager’s acquisition fees paid in units 63 – 63 – Distribution to Unitholders (61,042) (57,533) (61,042) (57,533) Net decrease in net assets resulting from Unitholders’ transactions (60,979) (57,533) (60,979) (57,533) Total increase in Unitholders’ funds before movement in other reserves 54,432 44,506 117,572 9,274

Other reserves Net movement in hedging reserve 241 (442) 241 (442) Net movement in foreign currency translation reserve 505 (838) – – Net increase/(decrease) in other reserves 746 (1,280) 241 (442)

Unitholders’ funds at end of year 951,354 896,176 931,132 813,319

The accompanying notes form an integral part of these financial statements.

75 ParkwayLife REIT Annual Report FY2012

Portfolio statements As at 31 December 2012

Remaining Percentage Percentage Tenure Term of term of At Valuation At Valuation of Net Assets of Net Assets Description of property of land lease lease Location Existing use at 31/12/2012 at 31/12/2011 at 31/12/2012 at 31/12/2011 (years) (years) $’000 $’000 % %

Group

Singapore

The Mount Elizabeth Hospital Property (1) Leasehold 67 62 3 Mount Elizabeth, Hospital and medical centre 620,000 584,000 65.2 65.2 Singapore 228510

The Gleneagles Hospital Property (1) Leasehold 75 70 6 Napier Road, Hospital and medical centre 313,000 295,000 32.9 32.9 Singapore 258499; and 6A Napier Road, Singapore 258500

The Parkway East Hospital Property (1) Leasehold 75 70 319 Joo Chiat Place, Hospital and medical centre 47,400 45,000 5.0 5.0 Singapore 427989; and 321 Joo Chiat Place, Singapore 427990 980,400 924,000

The accompanying notes form an integral part of these financial statements.

76 Annual Report FY2012 ParkwayLife REIT

Group

Singapore

The Mount Elizabeth Hospital Property (1) Leasehold 67 62 3 Mount Elizabeth, Hospital and medical centre 620,000 584,000 65.2 65.2 Singapore 228510

The Gleneagles Hospital Property (1) Leasehold 75 70 6 Napier Road, Hospital and medical centre 313,000 295,000 32.9 32.9 Singapore 258499; and 6A Napier Road, Singapore 258500

The accompanying notes form an integral part of these financial statements.

77 ParkwayLife REIT Annual Report FY2012

Portfolio statements As at 31 December 2012

Japan

P-Life Matsudo (2) Freehold N.A. N.A. 357 Matsuhidai, Matsudo City, Pharmaceutical product distributing 40,613 47,742 4.3 5.3 Chiba Prefecture, Japan and manufacturing facility

Bon Sejour Shin-Yamashita (2) Freehold N.A. N.A. 2-12-55 Shin Yamashita, Nursing home with care service 18,668 21,929 2.0 2.4 Naka-Ku, Yokohama City, Kanagawa Prefecture, Japan

Bon Sejour Ibaraki (2) Leasehold 50 45 25-2, Nishi-Toyokawacho, Nursing home with care service 15,019 17,560 1.6 2.0 Ibaraki City, Osaka Prefecture, Japan

Palmary Inn Akashi (2) Freehold N.A. N.A. 486, Yagi, Okubo-cho, Nursing home with care service 21,375 24,993 2.2 2.8 Akashi City, Hyogo Prefecture, Japan

Palmary Inn Suma (2) Freehold N.A. N.A. 1-5-23, Chimori-cho, Suma-ku, Nursing home with care service 12,426 14,547 1.3 1.6 Kobe City, Hyogo Prefecture, Japan

Senior Chonaikai Makuhari Kan (2) Freehold N.A. N.A. 5-370-4, Makuhari-cho, Nursing home with care service 20,663 24,206 2.2 2.7 Hanamigawa-ku, Chiba City, Chiba Prefecture, Japan

Himawari Home Kamakura (2) Freehold N.A. N.A. 1-13-1, Iwase, Kamakura City, Nursing home with care service 13,922 16,305 1.5 1.8 Kanagawa Prefecture, Japan

Smiling Home Medis Musashi Urawa (2) Freehold N.A. N.A. 5-5-6, Shikatebukuro, Minami- Nursing home with care service 8,963 10,479 0.9 1.2 ku, Saitama City, Saitama Prefecture, Japan

Fureai no sono Nerima Takanodai (2) Freehold N.A. N.A. 3-15-37, Takanodai, Nerima-ku, Nursing home with care service 19,950 23,302 2.1 2.6 Tokyo Prefecture, Japan

Smiling Home Medis Koshigaya Gamo (2) Freehold N.A. N.A. 2-2-25, Gamo-nishimachi, Nursing home with care service 18,667 21,913 2.0 2.4 Koshigaya City, Saitama Prefecture, Japan

Amille Nakasyo (2) Freehold N.A. N.A. 923-1 Aza Miyata, Hirata, Nursing home with care service 8,436 9,910 0.9 1.1 Kurashiki City, Okayama, Japan

Supercourt Kadoma (2) Leasehold 50 45 11-27, Yanagimachi, Kadoma Nursing home with care service 8,465 9,860 0.9 1.1 City, Osaka, Japan

Supercourt Takaishi-Hagoromo (2) Leasehold 30 26 4-1-22 Takashinohama, Nursing home with care service 9,562 11,082 1.0 1.2 Takaishi City, Osaka, Japan Balance carried forward 216,729 253,828 22.9 28.2

The accompanying notes form an integral part of these financial statements.

78 Annual Report FY2012 ParkwayLife REIT