Chengdu Longemont Mall

Perennial China Retail Trust Circular Dated 20 January 2012 OVERVIEW OF THE ACQUISITION

CIRCULAR DATED 20 JANUARY 2012 This overview section is qualifi ed in its entirety by, and should be read in conjunction with, the full text of this Circular. Words and expressions not defi ned herein have the same meaning as in the main body of this Circular unless the context requires otherwise. Meanings of defi ned terms may be found in the Glossary of this Circular. THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. CHINA RETAIL TRUST PROPOSED ACQUISITION OF CHENGDU LONGEMONT MALL (a business trust constituted on 22 February 2011 under the laws of the Republic of Singapore) PCRT, through its wholly-owned subsidiary Perennial China Retail Pte. Chengdu Longemont mixed-use development at the same price of Ltd., is proposing to acquire (the “Acquisition”) an interest of 50.0%, RMB10,000 per sqm on a completed basis. with the fl exibility to increase to up to 80.0% (the “Chengdu Longemont The total cost of the Acquisition, comprising the purchase consideration of Mall Interest”) in Chengdu Longemont Shopping Mall Development (the S$464.0 million (RMB2.28 billion), the acquisition fee payable to Perennial “Chengdu Longemont Mall”), which is located in Chengdu, Sichuan China Retail Trust Management Pte. Ltd. (the trustee-manager of PCRT) Province, China. (the “Trustee-Manager”) pursuant to the the trust deed dated 22 February PCRT had, during its initial public offering, secured the option to invest in a 2011 constituting PCRT (as amended) which will be paid in units of PCRT, strong pipeline of prime commercial development sites which are directly- as well as the estimated professional and other fees and expenses incurred connected to high-speed railway stations in Chengdu and Xi’an, and a or to be incurred in connection with the Acquisition, is estimated to be right of fi rst refusal to invest in a similar high-speed railway commercial approximately S$477.3 million. development site in Changsha. In connection with the Acquisition, the Trustee-Manager has also negotiated PCRT had, on 21 March 2011, secured an option (the “Chengdu with the Summit Group (comprising Shanghai Summit (Group) and its Longemont Mall Interest Option”) from Shanghai Summit (Group) Co., subsidiaries) for up to RMB226.5 million to be available for distribution Ltd (“Shanghai Summit (Group)”) and Shanghai Summit Real Estate under the new earn-out deed (“New Earn-out Deed”), which amounts to Development Co., Ltd. to acquire 50.0% of at least 1.0 million square approximately 10.0% of the Purchase Consideration based on a completed metres (“sqm”) of Gross Floor Area (“GFA”) in the Chengdu Longemont GFA of 455,260 sqm. The New Earn-out Deed is expected to further mixed-use development at RMB10,000 per sqm on a “completed basis” strengthen the Trustee-Manager’s capacity to deliver the total distribution within one year from its listing on the Main Board of the SGX-ST on 9 June amount set out in Forecast Year 2011 and Projection Year 2012 as 2011. The Acquisition relates to the exercise of the Chengdu Longemont disclosed in the prospectus of PCRT issued by the Trustee-Manager dated Mall Interest Option to acquire the Chengdu Longemont Mall which is 27 May 2011 (the “Prospectus”) and to also strengthen the cash fl ows for expected to measure approximately 455,260 sqm in GFA and is directly- distribution to unitholders of PCRT (“Unitholders”) in the fi rst half of 2013. connected to the Chengdu East High-Speed Railway Station. The new earn-out arrangement is expected to provide Unitholders greater assurance that the forecast total distribution amount for Forecast Year 2011 With the Acquisition, PCRT has up to 8 June 2012 to exercise the option and Projection Year 2012 as disclosed in the Prospectus can be achieved to acquire 50.0% of approximately another 544,740 sqm of GFA in the and is conditional upon obtaining Unitholders’ approval for the Acquisition.

LOCATION OF INITIAL PORTFOLIO AND PIPELINE ASSETS

Artist’s impression of Chengdu Longemont Shopping Mall Development adjacent to the operational Chengdu East High-Speed Railway Station. Picture may differ from the actual view of the completed property. The Acquisition Existing Portfolio CIRCULAR TO UNITHOLDERS IN RELATION TO: CHINA RETAIL TRUST Pipeline Assets (1) THE PROPOSED ACQUISITION OF A 50.0% INTEREST IN CHENGDU LONGEMONT SHOPPING MALL SHENYANG DEVELOPMENT FROM AN INTERESTED PERSON; Shenyang Red Star Macalline Furniture Mall Shenyang Longemont Shopping Mall CHINA Shenyang Longemont Offi ces (2) THE PROPOSED TRUST DEED SUPPLEMENT IN RELATION TO THE FORM OF PAYMENT OF (50.0% interest in each of the above) MANAGEMENT FEES; AND XI’AN Xi’an Longemont High-Speed (3) THE PROPOSED TRUST DEED SUPPLEMENT IN RELATION TO ACQUISITION FEES. Railway Commercial Development (50.0% interest) CHANGSHA CHENGDU Singapore Exchange Securities Trading Limited (the “SGX-ST”) assumes no responsibility for the accuracy or correctness of any statements Changsha Longemont High-Speed or opinions made, or reports contained, in this Circular. If you are in any doubt as to the action you should take, you should consult your Chengdu Qingyang Guanghua Shopping Mall Railway Commercial Development stockbroker, bank trustee-manager, solicitor, accountant or other professional adviser immediately. (100.0% interest) (at least 50.0% interest) If you have sold or transferred all your units in Perennial China Retail Trust (“PCRT”, and units in PCRT, “Units”), you should immediately forward Chengdu Longemont Mall this Circular, together with the Notice of Extraordinary General Meeting and the accompanying Proxy Form in this Circular, to the purchaser or (50.0% interest)1 transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for onward transmission to the purchaser Remaining interest in Chengdu Longemont Mall or transferee. (50.0% interest) FOSHAN This Circular is not for distribution, directly or indirectly, in or into the United States. It is not an offer of securities for sale into the United States. Foshan Yicui Shijia Shopping Mall The Units may not be offered or sold in the United States or to, or for beneﬁ t of, U.S. persons (as such term is deﬁ ned in Regulation S under (100.0% interest) the Securities Act of 1933, as amended) unless they are registered or exempt from registration. There will be no public offer of securities in the United States.

IMPORTANT DATES AND TIMES FOR UNITHOLDERS PROPOSED METHOD OF FINANCING Event Date and Time MANAGED BY The Trustee-Manager intends to fund the Acquisition wholly by debt of the following debt fi nancing options: (i) part of the proceeds from the Last date and time for Saturday, 11 February 2012 fi nancing through one or a combination of methods as set out in this Circular. Credit Facilities Agreement2 towards payments under the Framework PERENNIAL CHINA RETAIL TRUST MANAGEMENT PTE. LTD. Lodgement of Proxy Forms at 10.30 a.m. In making its decision, the Trustee-Manager will take into account, among Agreement, (ii) increasing the credit limit under the Credit Facilities (Registration Number 201024622Z) other things, the prevailing market conditions, interest rate environment, Agreement, (iii) draw downs under the S$500,000,000 Multicurrency Date and Time of Monday, 13 February 2012 debt expiry profi le and the covenants and conditions associated with each Medium Term Note Programme (“MTN Programme”)3 established on Extraordinary General Meeting at 10.30 a.m. fi nancing option, so that the Acquisition will be in the overall interest of 20 January 2012 and (iv) a new offshore debt facility secured on the shares Independent Financial Adviser to the Independent Directors and Audit and Risk PCRT and Unitholders. of the subsidiaries of PCRT which own directly or indirectly the Chengdu Committee of Perennial China Retail Trust Management Pte. Ltd. Place of Rooms 325-326, Level 3 Longemont Mall Interest. Extraordinary General Meeting Suntec Singapore The Trustee-Manager will fund the Acquisition through one or a combination International Convention & 1 Flexibility to increase to up to 80.0% Exhibition Centre 2 The Trustee-Manager, on behalf of PCRT, had on 27 May 2011 entered into a facilities agreement (the “Credit Facilities Agreement”) with DBS Bank Ltd. and Standard Chartered Bank for fi nancing facilities (the 1 Raffl es Boulevard, Suntec City “Credit Facilities”) in an aggregate amount of S$325.0 million comprising (i) committed term loan facilities of S$195.0 million to fi nance distributions to Unitholders, interest payments under the Credit Facilities and part of the progress payments by PCRT for the acquisition of Foshan Yicui Shijia Shopping Mall and Chengdu Qingyang Guanghua Shopping Mall as well as the development cost of Chengdu Qingyang Singapore 039593 Guanghua Shopping Mall (the “Acquisition and Development Costs”) and (ii) an uncommitted revolving credit facility of S$130.0 million to fi nance the remaining Acquisition and Development Costs. Further details of the Credit Facilities Agreement are set out in the section “Use of Proceeds” of the Prospectus. 3 Unitholders should note that the MTN Programme is not a committed line of credit and any issuance of notes under the MTN Programme is subject to the market conditions at the relevant time. OVERVIEW OF THE ACQUISITION

This overview section is qualifi ed in its entirety by, and should be read in conjunction with, the full text of this Circular. Words and expressions not defi ned herein have the same meaning as in the main body of this Circular unless the context requires otherwise. Meanings of defi ned terms may be found in the Glossary of this Circular. PROPOSED ACQUISITION OF CHENGDU LONGEMONT MALL PCRT, through its wholly-owned subsidiary Perennial China Retail Pte. Chengdu Longemont mixed-use development at the same price of Ltd., is proposing to acquire (the “Acquisition”) an interest of 50.0%, RMB10,000 per sqm on a completed basis. with the fl exibility to increase to up to 80.0% (the “Chengdu Longemont The total cost of the Acquisition, comprising the purchase consideration of Mall Interest”) in Chengdu Longemont Shopping Mall Development (the S$464.0 million (RMB2.28 billion), the acquisition fee payable to Perennial “Chengdu Longemont Mall”), which is located in Chengdu, Sichuan China Retail Trust Management Pte. Ltd. (the trustee-manager of PCRT) Province, China. (the “Trustee-Manager”) pursuant to the the trust deed dated 22 February PCRT had, during its initial public offering, secured the option to invest in a 2011 constituting PCRT (as amended) which will be paid in units of PCRT, strong pipeline of prime commercial development sites which are directly- as well as the estimated professional and other fees and expenses incurred connected to high-speed railway stations in Chengdu and Xi’an, and a or to be incurred in connection with the Acquisition, is estimated to be right of fi rst refusal to invest in a similar high-speed railway commercial approximately S$477.3 million. development site in Changsha. In connection with the Acquisition, the Trustee-Manager has also negotiated PCRT had, on 21 March 2011, secured an option (the “Chengdu with the Summit Group (comprising Shanghai Summit (Group) and its Longemont Mall Interest Option”) from Shanghai Summit (Group) Co., subsidiaries) for up to RMB226.5 million to be available for distribution Ltd (“Shanghai Summit (Group)”) and Shanghai Summit Real Estate under the new earn-out deed (“New Earn-out Deed”), which amounts to Development Co., Ltd. to acquire 50.0% of at least 1.0 million square approximately 10.0% of the Purchase Consideration based on a completed metres (“sqm”) of Gross Floor Area (“GFA”) in the Chengdu Longemont GFA of 455,260 sqm. The New Earn-out Deed is expected to further mixed-use development at RMB10,000 per sqm on a “completed basis” strengthen the Trustee-Manager’s capacity to deliver the total distribution within one year from its listing on the Main Board of the SGX-ST on 9 June amount set out in Forecast Year 2011 and Projection Year 2012 as 2011. The Acquisition relates to the exercise of the Chengdu Longemont disclosed in the prospectus of PCRT issued by the Trustee-Manager dated Mall Interest Option to acquire the Chengdu Longemont Mall which is 27 May 2011 (the “Prospectus”) and to also strengthen the cash fl ows for expected to measure approximately 455,260 sqm in GFA and is directly- distribution to unitholders of PCRT (“Unitholders”) in the fi rst half of 2013. connected to the Chengdu East High-Speed Railway Station. The new earn-out arrangement is expected to provide Unitholders greater assurance that the forecast total distribution amount for Forecast Year 2011 With the Acquisition, PCRT has up to 8 June 2012 to exercise the option and Projection Year 2012 as disclosed in the Prospectus can be achieved to acquire 50.0% of approximately another 544,740 sqm of GFA in the and is conditional upon obtaining Unitholders’ approval for the Acquisition.

LOCATION OF INITIAL PORTFOLIO AND PIPELINE ASSETS

The Acquisition Existing Portfolio Pipeline Assets SHENYANG Shenyang Red Star Macalline Furniture Mall Shenyang Longemont Shopping Mall CHINA Shenyang Longemont Offi ces (50.0% interest in each of the above) XI’AN Xi’an Longemont High-Speed Railway Commercial Development (50.0% interest) CHANGSHA CHENGDU Changsha Longemont High-Speed Chengdu Qingyang Guanghua Shopping Mall Railway Commercial Development (100.0% interest) (at least 50.0% interest) Chengdu Longemont Mall (50.0% interest)1 Remaining interest in Chengdu Longemont Mall (50.0% interest) FOSHAN Foshan Yicui Shijia Shopping Mall (100.0% interest)

PROPOSED METHOD OF FINANCING The Trustee-Manager intends to fund the Acquisition wholly by debt of the following debt fi nancing options: (i) part of the proceeds from the fi nancing through one or a combination of methods as set out in this Circular. Credit Facilities Agreement2 towards payments under the Framework In making its decision, the Trustee-Manager will take into account, among Agreement, (ii) increasing the credit limit under the Credit Facilities other things, the prevailing market conditions, interest rate environment, Agreement, (iii) draw downs under the S$500,000,000 Multicurrency debt expiry profi le and the covenants and conditions associated with each Medium Term Note Programme (“MTN Programme”)3 established on fi nancing option, so that the Acquisition will be in the overall interest of 20 January 2012 and (iv) a new offshore debt facility secured on the shares PCRT and Unitholders. of the subsidiaries of PCRT which own directly or indirectly the Chengdu Longemont Mall Interest. The Trustee-Manager will fund the Acquisition through one or a combination

1 Flexibility to increase to up to 80.0% 2 The Trustee-Manager, on behalf of PCRT, had on 27 May 2011 entered into a facilities agreement (the “Credit Facilities Agreement”) with DBS Bank Ltd. and Standard Chartered Bank for fi nancing facilities (the “Credit Facilities”) in an aggregate amount of S$325.0 million comprising (i) committed term loan facilities of S$195.0 million to fi nance distributions to Unitholders, interest payments under the Credit Facilities and part of the progress payments by PCRT for the acquisition of Foshan Yicui Shijia Shopping Mall and Chengdu Qingyang Guanghua Shopping Mall as well as the development cost of Chengdu Qingyang Guanghua Shopping Mall (the “Acquisition and Development Costs”) and (ii) an uncommitted revolving credit facility of S$130.0 million to fi nance the remaining Acquisition and Development Costs. Further details of the Credit Facilities Agreement are set out in the section “Use of Proceeds” of the Prospectus. 3 Unitholders should note that the MTN Programme is not a committed line of credit and any issuance of notes under the MTN Programme is subject to the market conditions at the relevant time. BENEFITS TO UNITHOLDERS

(1) ACCRETIVE ACQUISITION

1(a) DISTRIBUTION PER UNIT (“DPU”) ACCRETIVE The Trustee-Manager will endeavour to ensure that the yield on cost achieved for the Acquisition is higher than the yield on cost of PCRT’s Existing Portfolio1.

1(b) NET ASSET VALUE (“NAV”) ACCRETIVE

PCRT’s Purchase Price Independent Valuation 2011 Estimated Future Value 2014 Valuers per sqm GFA Value Premium over Value Premium over (Completed Basis) per sqm GFA Purchase Price per sqm GFA Purchase Price RMB12,500 CBRE 25.0% RMB14,930 49.3% (as at 31 October 2011) RMB10,000 RMB12,700 Colliers 27.0% RMB15,200 52.0% (as at 30 November 2011)

The Acquisition is expected to increase PCRT’s adjusted pro forma NAV per Unit of S$0.992 to S$1.193 based on CBRE’s estimated future values of all the properties of PCRT in 2014, when the Chengdu Longemont Mall is expected to commence operations. Assuming the Acquisition was completed on 30 September 2011, the Acquisition is expected to increase PCRT’s adjusted pro forma NAV per Unit of S$0.674 to S$0.765 as at 30 September 2011.

ADJUSTED PRO FORMA NAV PER UNIT ADJUSTED PRO FORMA NAV PER UNIT (based on CBRE’s estimated future value of all PCRT properties in 2014) AS AT 31 DECEMBER 2011

S$1.19 S$0.76 S$0.99 S$0.67

Existing Portfolio With Chengdu Existing Portfolio With Chengdu Longemont Mall Longemont Mall

(2) STRATEGIC LOCATION WITH DIRECT-CONNECTIVITY TO CHENGDU EAST HIGH-SPEED RAILWAY STATION The Chengdu Longemont Mall is strategically located in Chengdu’s new central business district (“CBD”) and is directly-connected to the Chengdu East HSR Station, one of the largest integrated passenger transport hubs in Western China. The Chengdu East HSR Station comprises: • inter-city railway; • long and short distance bus routes; and • intra-city subway (expected to serve subway Lines 2 and 7); • taxi connections (3) FAVOURABLE PAYMENT SCHEDULE PROVIDES FUNDING FLEXIBILITY & REDUCES COSTS Only 15.0% of the Purchase Consideration is required to be paid in the initial stage of the development in 2012. The payment for the remaining 85.0% will only need to be made in 2013 and 2014. The largely back-loaded payment structure reduces the amount which PCRT needs to ﬁ nance upfront and consequently, reduces interest and other related expenses for the Acquisition in such period.

FAVOURABLE PAYMENT SCHEDULE

Target Payment Date First Quarter 2012 Third Quarter 2013 Third Quarter 2014 Fourth Quarter 2014

Percentage Payment 15.0% 40.0% 40.0% 5.0%

Amount (million) RMB341.4 RMB910.5 RMB910.5 RMB113.8 (S$69.6) (S$185.6) (S$185.6) (S$23.2)

(4) INCREASES PCRT’S ASSET SIZE TO S$1.8 BILLION AND GENERATES ADDITIONAL 2014 PCRT ASSET SIZE (S$ BILLION) INCOME STREAM The Acquisition is expected to increase PCRT’s asset size from S$1.1 billion6 to S$1.8 billion7 on the completion of the Acquisition. PCRT is also expected to beneﬁ t from the additional income stream when the Chengdu Longemont Mall commences operations in the third quarter of 2014.

(5) STRENGTHENS RETAIL PRESENCE IN CHENGDU AND S$1.8 ECONOMIES OF SCALE S$1.1 The Chengdu Longemont Mall is located within the Third Ring Road of Eastern Chengdu. PCRT has the right to acquire the Chengdu Qingyang Guanghua Shopping Mall located in Western Chengdu, with completion targeted for the fourth quarter of Existing Portfolio With Chengdu 2013. Longemont Mall The Acquisition will strengthen PCRT’s retail presence in Chengdu and cater to different tenancy and shopper demands in the Eastern and Western parts of the city. The Acquisition is expected to provide PCRT with economies of scale in overall resource planning and operations in Chengdu. CHENGDU QINGYANG GUANGHUA SHOPPING MALL

Artist’s impression of Chengdu Qingyang Guanghua Shopping Mall. Picture may differ from actual view of the completed property.

1 With the agreed property purchase price of RMB10,000 per sqm of GFA being a favourable value and the Chengdu Longemont Mall expected to be a quality property on completion, with direct connections to a major transportation hub incorporating an inter-city high-speed railway, intra-city subway, bus terminals and taxi connections, the Trustee-Manager will endeavour to achieve a favourable net property income from the property which, when compared to the purchase cost of the property, will achieve a higher yield on cost in respect of Chengdu Longemont Mall as compared to PCRT’s Existing Portfolio. 2 The adjusted pro forma NAV per Unit of S$0.99 excludes deferred tax and is based on the estimated future values of the Properties (as defi ned in the Prospectus) in 2014 from CBRE and is based on all the assumptions and adjustments set out in the section “Unaudited Pro Forma Consolidated Balance Sheet as at the Listing Date – Pro Forma NAV per Unit for illustrative purposes” of the Prospectus. 3 The adjusted pro forma NAV per unit of S$1.19 is computed by applying the estimated future value of the Chengdu Longemont Mall in 2014 from CBRE of RMB14,930 per sqm of GFA to the adjusted pro forma NAV per unit of S$0.99 derived in the Prospectus and based on all the assumptions and adjustments set out therein, after incorporating the following key adjustments and assumptions, and excluding deferred tax: (i) the GFA of the Chengdu Longemont Mall for the purposes of computing the Purchase Consideration under the Framework Agreement is 455,260 sqm, (ii) the RMB amount in respect of the estimated future value and Purchase Consideration of the Chengdu Longemont Mall is translated into Singapore dollars based on the foreign exchange rate of RMB4.9061 = S$1.00, (iii) the number of Units are assumed to remain as that used in deriving the adjusted pro forma NAV per unit of S$0.99 in the Prospectus, and (iv) the NAV per unit increase is computed based on the increase in valuation of the estimated future value of the Chengdu Longemont Mall which is an extrapolation of the “as if complete and fully leased” valuation by CBRE as at 31 October 2011 compared to the Purchase Consideration. 4 The adjusted pro forma NAV per Unit of S$0.67 excludes deferred tax and is based on the valuation by CBRE of the Properties (as defi ned in the Prospectus) as at 31 December 2010 and is based on all the assumptions and adjustments set out in the section “Unaudited Pro Forma Consolidated Balance Sheet as at the Listing Date – Pro Forma NAV per Unit for illustrative purposes” of the Prospectus. 5 The adjusted pro forma NAV per unit of S$0.76 is computed by applying the valuation by CBRE of the Chengdu Longemont Mall as at 31 October 2011 of RMB12,500 per sqm of GFA to the adjusted pro forma NAV per unit of S$0.67 derived in the Prospectus and based on all the assumptions and adjustments set out therein, after incorporating the following key adjustments and assumptions, and excluding deferred tax: (i) the GFA of the Chengdu Longemont Mall for the purposes of computing the Purchase Consideration under the Framework Agreement is 455,260 sqm, (ii) the RMB amount in respect of the valuation and Purchase Consideration of the Chengdu Longemont Mall is translated into Singapore dollars based on the foreign exchange rate of RMB4.9061 = S$1.00, and (iii) the number of Units are assumed to remain as that used in deriving the adjusted pro forma NAV per unit of S$0.67 in the Prospectus. 6 Based on the initial property portfolio of PCRT which was valued by CBRE as at 31 December 2010 on an “as if complete and fully leased” basis. 7 Based on the initial property portfolio of PCRT which was valued by CBRE as at 31 December 2010 and the value of Chengdu Longemont Mall’s 2011 independent valuation by CBRE of RMB12,500 per sqm of GFA as at 31 October 2011 on an “as if complete and fully leased” basis and based on the foreign exchange rate of RMB4.9061 = S$1.00. CHENGDU LONGEMONT MALL

OVERVIEW OF THE PROPERTY The Chengdu Longemont Mall, which is expected to measure approximately 455,260 sqm2 in Gross Floor Area1, is part of the 1.7 million sqm2 Chengdu Longemont mixed-use development and is sited in Chenghua District within the Third Ring Road of South- East Chengdu, Sichuan Province, China. The Chengdu Longemont Mall will be strategically located adjacent to and directly-connected via its basement level to the operational Chengdu East HSR Station, a newly-built major transportation hub comprising the inter-city high-speed railway, Chengdu’s intra-city subway (expected to serve Lines 2 and 7); long and short distance bus routes and taxi connections. An area spanning approximately 12 square kilometres surrounding the Chengdu East HSR Station has been designated as Chengdu’s new CBD3 and is increasingly being built-up with many residential apartments, commercial ofﬁ ces and business centres. The Chengdu Longemont Mall will offer a myriad of retail and entertainment choices targeted at the middle-income shoppers, including a supermarket, an amusement park, local and international fashion, food and beverage brands and other retailers. The Chengdu Longemont Mall is expected to commence operations in the third quarter of 2014.

PCRT’s existing asset Chengdu Qingyang Guanghua Shopping Mall

Chengdu Longemont Mall

Chengdu East HSR Station

Location Plot A, East of Jinxiu Avenue, Chenghua District, Chengdu, Sichuan Province Ownership Interest 50.0%, with ﬂ exibility to increase to up to 80.0% Purchase Price (Completed Basis) RMB10,000 per sqm Purchase Consideration RMB2.28 billion4 (approximately S$464.0 million) 2011 Valuation (million)5 CBRE: RMB2,844.0 (S$579.7) (Assumed 50.0% interest) Colliers: RMB2,895.0 (S$590.1) Land Area (sqm) 48,221.6 Gross Floor Area (sqm) 455,260.0 Retail Gross Floor Area (sqm) 364,650.0 Net Lettable Area (sqm)6 255,255.0 Land Use Rights Expiry 20 February 2051 Commencement of Operations Expected in Third Quarter 2014

1 Based on architectural plans prepared by the relevant architects and may differ from the actual GFA of the completed property. 2 Based on information provided by the Summit Group. 3 Based on the publication of the Management Committee of Intercity Travel Business City of Chengdu New Railway Passenger Station. The Management Committee of Intercity Travel Business City of Chengdu New Railway Passenger Station has not provided its consent, to the inclusion of the information extracted from the relevant report published by it and therefore is not liable for such information. While the Trustee- Manager has taken reasonable actions to ensure that the information from the relevant report published by the Management Committee of Intercity Travel Business City of Chengdu New Railway Passenger Station is reproduced in its proper form and context, and that the information is extracted accurately and fairly from such report, neither the Trustee-Manager nor any other party has conducted an independent review of the information contained in such report nor verifi ed the accuracy of the contents of the relevant information. 4 Subject to adjustments in accordance with the terms of the Framework Agreement. 5 Valuations in SGD are based on an assumed foreign exchange rate of S$1.00: RMB4.9061. Valuations of the Chengdu Longemont Mall are as at 31 October 2011 by CBRE and 30 November 2011 by Colliers. The 2011 valuations by CBRE and Colliers are on an “as if complete and fully leased” basis which provides the value of a proposed development project assuming it has already been completed, and utilises market information prevailing as at the date of the valuations. The critical assumptions adopted are: (i) construction of the property had already been completed according to the development schemes and plans made available to the valuer, (ii) all necessary licences, permits or grants to act, to build, use and occupy have been obtained, with no future payments needed to ensure this position, (iii) the property is fully leased under leasing and occupational arrangement typical of the market as at the date of valuation, (iv) revenue and property outgoings are based on prevailing economic and market conditions, and (v) net property income is capitalised for the balance lease term at the prevailing market-derived capitalisation rates. This valuation basis is to be distinguished from the “as is” or “existing condition” bases. 6 The NLA is based on architectural plans prepared by the relevant architects and may differ from the actual NLA of the completed property. OVERVIEW OF PERENNIAL CHINA RETAIL TRUST SINGAPORE’S FIRST PURE-PLAY PRC RETAIL DEVELOPMENT TRUST

Perennial China Retail Trust (“PCRT”) is Singapore’s fi rst pure-play PCRT had, during its initial public offering, also secured the option People’s Republic of China (“PRC”) retail development trust listed to invest in a strong pipeline of prime commercial development on the Main Board of the SGX-ST on 9 June 2011. sites which are directly-connected to high-speed railway stations in Chengdu and Xi’an, and a right of fi rst refusal to invest in a similar PCRT’s existing portfolio (“Existing Portfolio”) is valued at high-speed railway commercial development site in Changsha. This approximately S$1.1 billion (approximately RMB5,898.0 million) and Circular relates to the exercise of the option to acquire the Chengdu comprises fi ve properties which are expected to have an aggregate Longemont Shopping Mall Development (the “Acquisition”) which gross fl oor area (“GFA”) of approximately 960,899.0 square metres is directly connected to the Chengdu East HSR Station. (“sqm”) located in Shenyang, Foshan and Chengdu. The Existing Portfolio comprises a 50.0% stake in each of Shenyang Red Star PCRT aims to provide unitholders of PCRT with (i) long-term capital Macalline Furniture Mall, Shenyang Longemont Shopping Mall growth from a steady growth in net asset value through acquiring and the Shenyang Longemont Offi ces. In addition, PCRT will attractively priced predominantly-retail development projects have the right to acquire a 100.0% stake in each of Foshan Yicui and the on-going value creation of PCRT’s assets and (ii) regular Shijia Shopping Mall located in Foshan and Chengdu Qingyang distributions from the income of its completed and stabilised Guanghua Shopping Mall located in Chengdu. assets. PCRT is sponsored by Perennial Real Estate Pte. Ltd. and is managed by Perennial China Retail Trust Management Pte. Ltd. PCRT’S EXISTING PORTFOLIO AND THE ACQUISITION The table below sets out selected information about PCRT’s Existing Portfolio and the Acquisition. THE EXISTING PORTFOLIO ACQUISITION Shenyang Shenyang Shenyang Foshan Yicui Chengdu Qingyang Chengdu Red Star Macalline Longemont Longemont Shijia Guanghua Longemont Furniture Mall Shopping Mall Offi ces Shopping Mall Shopping Mall Mall Location Pangjiang Street, Pangjiang Street, Pangjiang Street, No. 45 Guilan South Guanghua Avenue, Plot A, East of Dadong District, Dadong District, Dadong District, Road, Nanhai Qingyang District, Jinxiu Avenue, Shenyang, Shenyang, Shenyang, District, Foshan, Chengdu, Chenghua District, Liaoning Province Liaoning Province Liaoning Province Guangdong Province Sichuan Province Chengdu, Sichuan Province Ownership Interest 50.0%, with fl exibility 50.0% 50.0% 50.0% 100.0% 100.0% to increase to up to 80.0% Valuation (million)1 CBRE: RMB2,844.0 (as at 31 December (S$579.7) 2010) (Assumed 50.0% RMB1,452.0 RMB1,725.0 RMB1,077.0 RMB795.0 RMB849.0 interest) (S$296.0) (S$351.6) (S$219.5) (S$162.0) (S$173.0) (50.0% interest) (50.0% interest) (50.0% interest) Colliers: RMB2,895.0 (S$590.1) (Assumed 50.0% interest) Land Area (sqm) 44,845.4 53,328.2 34,411.6 52,823.0 48,221.6 Retail Gross Floor 276,474.0 327,789.0 197,803.0 68,833.0 90,000.0 364,650.03 Area (sqm)2 Net Lettable Area 181,595.0 209,292.0 177,590.0 47,410.0 58,500.0 255,254.0 (sqm) Land Use Rights 20 January 2049 20 May 2049 19 January 2050 20 February 2051 Expiry Commencement of Expected in Expected in Expected in Expected in 30 September 2010 1 October 2011 Operations Fourth Quarter 2012 First Quarter 2013 Second Quarter 2014 Third Quarter 2014 ENLARGED PORTFOLIO (COMPRISING THE EXISTING PORTFOLIO AND THE ACQUISITION) The table below sets out selected information on the Enlarged Portfolio. EXISTING PORTFOLIO ENLARGED PORTFOLIO INCREASE

Aggregate Retail Gross Floor Area (sqm) 960,899.04 1,325,549.05 +37.9%

Aggregate Net Lettable Area (sqm) 674,387.06 929,641.07 +37.8%

Portfolio Value8 (million) RMB5,898.0 RMB8,767.5 +48.6% (S$1,132.7) (S$1,787.1)

1 Valuations in SGD are based on an assumed foreign exchange rate of S$1.00: RMB4.9061. Valuations for the existing portfolio are as at 31 December 2010. Valuations of the Chengdu Longemont Mall are as at 31 October 2011 (CBRE) and 30 November 2011 (Colliers). 2 The Retail GFA is based on architectural plans prepared by the relevant architects and, in the case of completed buildings, on which construction was based. This retail GFA may differ from the actual retail GFA of the relevant completed Properties. 3 The GFA of the Chengdu Longemont Mall is 455,260 sqm, which includes 364,650 sqm of retail GFA and 90,610 sqm of carpark area. 4 Based on PCRT’s ownership interest in the Properties (50.0% interest in Shenyang Summit and 100.0% interest in Foshan Yicui Shijia Shopping Mall and Chengdu Qingyang Guanghua Shopping Mall), the retail GFA attributable to PCRT is 559,866 sqm. 5 The retail GFA attributable to PCRT for the Chengdu Longemont Mall will depend on PCRT’s interest in the mall, which will range from 50.0% to 80.0%. If PCRT acquires a 50.0% interest in the Chengdu Longemont Mall, the total retail GFA attributable to PCRT will be 742,191 sqm. 6 Based on PCRT’s ownership interest in the Properties, the NLA of the Existing Portfolio attributable to PCRT is 390,149 sqm. 7 The NLA attributable to PCRT for the Chengdu Longemont Mall will depend on PCRT’s interest in the mall, which will range from 50.0% to 80.0%. If PCRT acquires a 50.0% interest in the Chengdu Longemont Mall, the NLA of the Enlarged Portfolio attributable to PCRT will be 517,776 sqm. 8 The Portfolio Value is based on PCRT’s ownership interest in the Properties. The Enlarged Portfolio assumes PCRT has a 50.0% interest in the Chengdu Longemont Mall. Portfolio Value in SGD (i) for the Existing Portfolio is based on an assumed foreign exchange rate of S$1.00: RMB5.2070 as set out in the Prospectus and (ii) for the Enlarged Portfolio is based on an assumed foreign exchange rate of S$1.00: RMB4.9061. COMPETITIVE STRENGTHS OF THE PROPERTY (A) PART OF THE CHENGDU LONGEMONT MIXED-USE DEVELOPMENT The Chengdu Longemont Mall is one part of the 1.7 million sqm1 Chengdu Longemont mixed-use development that the Summit Group is developing on four plots of prime land surrounding and adjacent to the Chengdu East HSR Station. The Summit Group is expected to develop offi ce towers, a convention centre, a hotel and a wholesale centre on the remaining three plots of land2. The Chengdu Longemont Mall is expected to benefi t from the immediate offi ce and residential catchment from the Chengdu Longemont mixed-use development as well as tourists visiting Chengdu.

Ofﬁ ces and Retail

Hotel and Convention Centre Service Apartments and Wholesale Centre

Chengdu Longemont Mall Chengdu East High-Speed Railway Station

27 Train Platforms

(B) SITED ON MOST PRIME PLOT WITHIN THE CHENGDU LONGEMONT MIXED-USE DEVELOPMENT Amongst the four land plots (A, B, C and D) of the Chengdu Longemont mixed-use development, the land plot on which the Chengdu Longemont Mall (Plot A) will be sited is considered by the Trustee-Manager to be the most prime in terms of connectivity, as it is strategically located at the intersection of two of Chengdu intra-city subway lines (expected to serve Lines 2 and 7), and is expected to have immediate access to the mixed-use development’s local bus interchange as well as the taxi stand.

A, B, Chengdu Longemont C & D Mixed-use Development Subway Line

S Subway Station

T Taxi Stand

B Short-Distance Bus Interchange

L Long-Distance Bus Interchange

1 Based on information provided by the Summit Group. 2 Based on the plans provided by the Summit Group and are subject to changes. (C) DIRECTLY-CONNECTED TO THE CHENGDU EAST HSR STATION Opened in May 2011, the Chengdu East HSR Station, with 27 train platforms, is one of the largest integrated transportation hubs in Western China. The Chengdu Longemont Mall will be directly-connected to the Chengdu East HSR Station via its basement level.

VISUALS AND CROSS SECTIONAL VIEW OF OPERATIONAL CHENGDU EAST HSR STATION

Waiting Area

Drop-Off Point

High Speed Direct-Connectivity via Basement Level To Subway Chengdu Longemont Mall Lines Railway

(D) HIGH POPULATION CATCHMENT SURROUNDING THE CHENGDU LONGEMONT MALL The Chengdu Longemont Mall is currently surrounded by a high residential population catchment. With the local Government’s plan to designate an area spanning approximately 12 square kilometers surrounding the Chengdu East HSR Station as Chengdu new CBD1, more residential developments are expected to be built-up in the surrounding precinct in the next few years.

1 Based on the publication of the Management Committee of Intercity Travel Business City of Chengdu New Railway Passenger Station. The Management Committee of Intercity Travel Business City of Chengdu New Railway Passenger Station has not provided its consent to the inclusion of the information extracted from the relevant report published by it and therefore is not liable for such information. While the Trustee- Manager has taken reasonable actions to ensure that the information from the relevant report published by the Management Committee of Intercity Travel Business City of Chengdu New Railway Passenger Station is reproduced in its proper form and context, and that the information is extracted accurately and fairly from such report, neither the Trustee-Manager nor any other party has conducted an independent review of the information contained in such report nor verifi ed the accuracy of the contents of the relevant information. TABLE OF CONTENTS

Page

CORPORATE INFORMATION ...... iii

SUMMARY ...... 1

INDICATIVE TIMETABLE ...... 17

LETTER TO UNITHOLDERS...... 18

1. Summary of Approvals Sought ...... 18

2. The Proposed Acquisition of a 50.0% Interest in Chengdu Longemont Shopping Mall Development from an Interested Person ...... 18

3. Rationale for the Acquisition ...... 35

4. Details of the Acquisition ...... 37

5. Method of Financing the Acquisition ...... 44

6. Advice of the Independent Financial Adviser...... 46

7. The Proposed Trust Deed Supplement in relation to the Form of Payment of Management Fees ...... 46

8. The Proposed Trust Deed Supplement in relation to Acquisition Fees ...... 47

9. Directors’ Recommendations ...... 50

10. Extraordinary General Meeting...... 51

11. Abstentions from Voting ...... 51

12. Action to be taken by Unitholders...... 52

13. Directors’ Responsibility Statement...... 52

14. Consent...... 53

15. Documents Available for Inspection ...... 53

IMPORTANT NOTICE ...... 54

GLOSSARY ...... 55

APPENDIX A Details of the Chengdu Longemont Mall and the Existing Portfolio ...... A-1

APPENDIX B Independent Financial Adviser’s Letter ...... B-1

APPENDIX C Valuation Summary Letters ...... C-1

APPENDIX D Chengdu Retail Market Review by the Independent Property Consultant. . D-1

APPENDIX E The Proposed Trust Deed Supplement in relation to the Form of Payment of Management Fees...... E-1

i APPENDIX F The Proposed Trust Deed Supplement in relation to Acquisition Fees .... F-1

APPENDIX G Directors’ and Substantial Unitholders’ Interest ...... G-1

APPENDIX H Certain Details Relating to the Acquisition of the Chengdu Longemont Mall. H-1

NOTICE OF EXTRAORDINARY GENERAL MEETING ...... I-1

PROXY FORM

ii CORPORATE INFORMATION

Directors of Perennial : Mr Boon Swan Foo (Chairman & Independent Non-Executive China Retail Trust Director) Management Pte. Ltd. Mr Wong Tui San (Independent Non-Executive Director) (the trustee-manager Mr Pok Soy Yoong (Independent Non-Executive Director) of PCRT) Mr Kuok Khoon Hong (Independent Non-Executive Director) (the “Trustee-Manager”) Mr Pua Seck Guan (Executive Director and Chief Executive Officer) Ms Tan Ser Joo (Executive Director and Head of Investment & Asset Management)

Registered Office of : 6 Temasek Boulevard the Trustee-Manager #25-04/05 Suntec Tower Four Singapore 038986

Legal Adviser to the Trustee- : Allen & Gledhill LLP Manager in relation to the One Marina Boulevard #28-00 Acquisition, the Trust Deed Singapore 018989 Supplement in relation to the form of payment of Management Fees and the Trust Deed Supplement in relation to Acquisition Fees as to Singapore Law

Legal Adviser to the Trustee- : Commerce & Finance Law Offices Manager in relation to the 6/F NCI Tower Acquisition as to Chinese A 12 Jianguomenwai Avenue Law Beijing, People’s Republic of China

Unit Registrar and : Boardroom Corporate & Advisory Services Pte. Ltd. Unit Transfer Office 50 Raffles Place #32-01 Singapore Land Tower Singapore 048623

Independent Financial : Deloitte & Touche Corporate Finance Pte Ltd Adviser to the Independent 6 Shenton Way Directors and Audit and Risk #32-00 DBS Building Tower 2 Committee of the Trustee- Singapore 068809 Manager (the “IFA”)

Independent Valuers : CB Richard Ellis (Pte) Ltd 6 Battery Road #32-01 Singapore 049909

Colliers International (Hong Kong) Ltd Suite 5701 Central Plaza 18 Harbour Road Wanchai Hong Kong

Independent Property : Urbis Pty Ltd Consultant for the Chengdu Level 12, 120 Collins Street Retail Market Review (the Melbourne, VIC 3000 “Independent Property Australia Consultant”)

iii This page has been intentionally left blank. SUMMARY

The following summary is qualified in its entirety by, and should be read in conjunction with, the full text of this Circular. Meanings of defined terms may be found in the Glossary on pages 55 to 61 of this Circular.

Any discrepancies in the tables included herein between the listed amounts and totals thereof are due to rounding.

SUMMARY OF APPROVALS SOUGHT

The Trustee-Manager is seeking the approval of unitholders of PCRT (“Unitholders”) for the following resolutions:

(1) Resolution 1: The Proposed Acquisition of a 50.0% Interest in Chengdu Longemont Shopping Mall Development from an Interested Person (Ordinary Resolution)

On 3 November 2011, (i) Perennial China Retail Pte. Ltd. (“PCRPL”), a wholly-owned subsidiary of PCRT, (ii) Mr Tong Jinquan, (iii) Shanghai Summit Real Estate Development Co., Ltd. (“Shanghai Summit”), (iv) Chengdu Summit Real Estate Development Co., Ltd. (“Chengdu Summit”), (v) Chengdu Ruifeng Real Estate Development Co., Ltd. (“Chengdu Ruifeng”) and (vi) Shanghai Summit Pte. Ltd entered into a master framework agreement (the “Original Framework Agreement”), as amended and restated by an agreement entered into by the same parties to the Original Framework Agreement, Perennial Real Estate Pte. Ltd. (“PREPL”) and Ms Tong Yuqian (the daughter of Mr Tong Jinquan) on 19 January 2012 (the “Framework Agreement”) which will ultimately lead to PCRPL acquiring (the “Acquisition”) an interest of 50.0%, with the flexibility to increase to up to 80.0% (the “Chengdu Longemont Mall Interest”) in Chengdu Longemont Shopping Mall Development (the “Chengdu Longemont Mall”).

Terms of the Framework Agreement and the Option Agreement

• Based on a completed gross floor area (“GFA”) of 455,260 square metres (“sqm”), PCRPL will acquire a 50.0% interest in Chengdu Longemont Mall at an aggregate purchase consideration of approximately RMB2.28 billion (S$464.0 million) (the “Purchase Consideration”), with the Purchase Consideration arrived at based on the agreed property purchase price of RMB10,000 per sqm on a “completed” basis as set out in the Chengdu Longemont Mall Interest Option (as defined herein). The RMB10,000 per sqm amount was arrived at based on a willing-buyer and willing-seller basis after taking into account the market valuation of the Chengdu Longemont Mall.

• In light of the intention for PCRT to have the flexibility to acquire a higher percentage interest in the Chengdu Longemont Mall, the parties to the Original Framework Agreement have entered into an agreement on 19 January 2012 (the “Option Agreement”), pursuant to which PCRPL has been granted an option to increase its equity interest in Chengdu Ruifeng. The Option Agreement states that in the event that the GFA1 of the property is determined to be less than 95.0%2 of 455,260 sqm (which shall be no later than the time that Chengdu Ruifeng obtains the four permits3) based on the GFA approved by the authority in the construction project planning permit (the “Transactional GFA”), PCRPL shall have the flexibility to acquire a higher percentage interest (up to 80.0%) in Chengdu Longemont Mall at RMB10,000 per sqm subject always to

1 As approved by the relevant governmental authorities. 2 The 95.0% threshold was arrived at based on a willing-buyer and willing-seller basis as a meaningful deviation from the estimated GFA of the building. 3 Refers to the four approvals from the PRC governmental authorities, being (i) the land use right certificate (土地使用證), (ii) the construction land planning permit (建設用地規劃許可證), (iii) the construction project planning permit (建設工程規劃許可證) and (iv) the construction permit (建築工程施工許可證), which are expected to be received in the first quarter of 2012.

1 PCRPL paying a maximum Purchase Consideration of RMB2.28 billion (S$464.0 million) for its aggregate interest in Chengdu Longemont Mall in the event that it acquires more than 50.0% interest in Chengdu Longemont Mall. PCRPL may increase its stake in Chengdu Longemont Mall at its option and at any time within one year from the later of (i) the date that PCRPL completes its acquisition of the BVI SPV (as defined herein) and (ii) the date that Chengdu Ruifeng obtains the four permits1. For the avoidance of doubt, if the Transactional GFA is less than 455,260 sqm but more than 95% of 455,260 sqm, PCRPL will not have the option of increasing its stake in Chengdu Longemont Mall and in such an instance, the Purchase Consideration payable will be adjusted based on the Transactional GFA. (See paragraph 2.2 of the Letter to Unitholders for a chart illustrating the amount payable by PCRT in the various scenarios.)

• In addition, in connection with the Acquisition, the Trustee-Manager has also negotiated for up to RMB226,525,000 to be available for distribution under the New Earn-out Deed (as defined herein), which amounts to approximately 10.0% of the Purchase Consideration based on a completed GFA of 455,260 sqm.

The Framework Agreement was entered into pursuant to an option (the “Chengdu Longemont Mall Interest Option”) granted on 21 March 2011 by Shanghai Summit (Group) Co., Ltd (“Shanghai Summit (Group)”) and Shanghai Summit to PREPL and PCRPL for the acquisition of, inter alia, the Chengdu Longemont Mall Interest. With the Acquisition, PCRT has up to 8 June 2012 to exercise the option to acquire 50.0% of approximately another 544,740 sqm of GFA in the Chengdu Longemont Mall mixed-use development at the same price of RMB10,000 per sqm on a completed basis.

The remaining 50.0% or less interest in the Chengdu Longemont Mall will be held by the Summit Group (comprising Shanghai Summit (Group) and its subsidiaries), of which Mr Tong Jinquan is the founder.

Overview of the Framework Agreement

The Framework Agreement was negotiated by the Trustee-Manager on an arm’s length basis. The Framework Agreement provides for, among other things, the restructuring of Chengdu Summit and Chengdu Ruifeng in a series of steps which will ultimately lead to PCRPL acquiring the Chengdu Longemont Mall Interest. Shanghai Summit currently owns Chengdu Summit which in turn holds the underlying land in respect of the Chengdu Longemont Mall (the “Underlying Land”).

Under the Framework Agreement, it is intended that the Underlying Land be transferred to Chengdu Ruifeng, which will be 50.0% owned by a special purpose company incorporated under the laws of Hong Kong (the “Hong Kong SPV”). The Hong Kong SPV will in turn be wholly-owned by a special purpose company incorporated under the laws of the British Virgin Islands (the “BVI SPV”) which will be held by PREPL on trust for Ms Tong Yuqian, the daughter of Mr Tong Jinquan. The following events will take place after approximately three months from the date of the Framework Agreement: (i) the trust will be terminated and PREPL will transfer the legal title to the shares of the BVI SPV to Ms Tong Yuqian2; and (ii) the Acquisition will be made by PCRT through the acquisition by PCRPL of the BVI SPV from Ms Tong

2 Yuqian, after which the remaining 50.0% direct interest in Chengdu Ruifeng will be owned by Shanghai Summit. By PREPL holding the shares of the BVI SPV on trust for Ms Tong Yuqian (being a member of the Summit Group who is the ultimate beneficial owner of the Underlying Land prior to the proposed Acquisition being implemented), PREPL is able to safeguard the interests of PCRT in its investment in Chengdu Ruifeng as PREPL will be able to supervise the incorporation process and the activities of the BVI SPV prior to the termination of the trust and the sale of the shares by Ms Tong Yuqian to PCRPL.

The steps set out in the Framework Agreement may vary in order to comply with applicable laws and regulations and the Trustee-Manager will make an announcement should there be material variations to the terms of the Framework Agreement.

(See paragraph 2 of the Letter to Unitholders for the details of the Acquisition including the restructuring steps which will lead to PCRPL acquiring the Chengdu Longemont Mall Interest. See paragraph 2.3.1 of the Letter to Unitholders for a diagram setting out the ownership structure of the Underlying Land following the restructuring.)

Description of the Property

The Chengdu Longemont Mall, which is expected to measure approximately 455,2601 sqm in GFA (of which approximately 364,650 sqm is expected to be retail GFA and 90,610 sqm is expected to be carpark space)1 is part of the 1.7 million sqm2 Chengdu Longemont mixed-use development, and is sited in Chenghua District within the Third Ring Road of South-East Chengdu, Sichuan Province, China. The Chengdu Longemont Mall will be strategically located adjacent to and directly-connected via its basement level to the operational Chengdu East High-Speed Railway (“HSR”) Station, a newly-built major transportation hub comprising the inter-city high-speed railway, Chengdu’s intra-city subway (expected to serve Lines 2 and 7), long and short distance bus routes and taxi connections. An area spanning approximately 12 square kilometres surrounding the Chengdu East HSR Station has been designated as Chengdu’s new Central Business District (“CBD”)3 and is increasingly being built-up with many residential apartments, commercial offices and business centres.

The Chengdu Longemont Mall will offer a myriad of retail and entertainment choices targeted at the middle-income shoppers, including a supermarket, an amusement park, local and international fashion, food and beverage brands and retailers. Construction of the Chengdu Longemont Mall will commence when the fourth permit being the construction permit (建築工程施工許可證) is received in the first quarter of 2012. The excavation works on the Chengdu Longemont Mall commenced in December 2011. The Chengdu Longemont Mall is expected to commence operations in the third quarter of 2014.

3 Rationale for the Flexibility to Increase PCRT’s Interest in Chengdu Longemont Mall

The Trustee-Manager believes that the flexibility for PCRT to increase its interest in Chengdu Longemont Mall to more than 50.0% (and up to 80.0%) is in the interests of Unitholders as it provides an opportunity for PCRT to take majority ownership in a quality asset, thereby increasing the number of potential assets in PCRT’s portfolio with majority ownership. In addition, as the Purchase Consideration for its aggregate interest in Chengdu Longemont Mall shall in all cases be limited to a maximum of RMB2.28 billion (S$464.0 million) (save for the instance where the Final GFA (as defined herein) as stated in the Building Title Certificate is more than the Transactional GFA approved by the authority in the construction project planning permit (see paragraph 2.2 of the Letter to Unitholders for details of the adjustment)), the maximum cash outlay of PCRT for this investment is capped.

In addition, PCRPL has the flexibility to increase its stake at any time after it has been determined that the Transactional GFA1 of the property will be less than 95.0% of 455,260 sqm (which shall be no later than the time that Chengdu Ruifeng obtains the four permits2) and up to one year from the later of (i) the date on which PCRPL completes its acquisition of the BVI SPV and (ii) the date on which Chengdu Ruifeng obtains the four permits2, thereby allowing the Trustee-Manager the time and opportunity to evaluate market conditions and consider various factors, which include the potential increase in the market value per sqm of GFA with a reduction of the GFA and reduced number of levels of the property, and the terms of the acquisition to determine if there is further upside potential in relation to the property at the relevant time.

New Earn-out Deed

Principal Terms of the Earn-out Arrangements

The Trustee-Manager had negotiated a new earn-out arrangement (the “New Earn-out”) with the Summit Group to further strengthen the Trustee-Manager’s capacity to deliver the total distribution amount in respect of the period from 9 June 2011 to 31 December 2011 (the “Forecast Year 2011”) and 1 January 2012 to 31 December 2012 (the “Projection Year 2012”) as disclosed in the prospectus of PCRT issued by the Trustee-Manager dated 27 May 2011 (the “Prospectus”) and to also strengthen the cash flows for distribution to Unitholders in the first half of 2013. The New Earn-out is expected to provide Unitholders greater assurance that the forecast total distribution amount for Forecast Year 2011 and Projection Year 2012 as disclosed in the Prospectus can be achieved and is conditional upon obtaining Unitholders’ approval for the proposed Acquisition.

Shanghai Summit Pte. Ltd. and PCRPL had on 19 January 2012 entered into a new earn-out deed (the “New Earn-out Deed”) to supplement the earn-out amounts under the earn-out deed entered into on 21 March 2011, as amended and restated on 3 November 2011 (the “Amended and Restated Earn-out Deed”). The New Earn-out Deed (which is in addition to the Amended and Restated Earn-out Deed) provides for, inter alia, Shanghai Summit Pte. Ltd. to provide PCRT with a sum of up to RMB226,525,000, to provide greater assurance that PCRT’s total distribution amount from 9 June 2011 (being the date of the listing of the Units on the SGX-ST) to the first half of 2013 do not fall below certain thresholds stipulated below. The terms of the New Earn-out Deed (including the earn-out amount) were negotiated on an arm’s length basis. In the event that any of PCRT’s total distribution amount in the specified period falls below the stipulated threshold after drawing down under the Amended and Restated Earn-out Deed, PCRT will have the right to draw down under the New Earn-out Deed.

1 As approved by the relevant governmental authorities. 2 Refers to the four approvals from the PRC governmental authorities, being (i) the land use right certificate (土地使用證), (ii) the construction land planning permit (建設用地規劃許可證), (iii) the construction project planning permit (建設工程規劃許可證) and (iv) the construction permit (建築工程施工許可證), which are expected to be received in the first quarter of 2012.

4 The maximum amount of RMB226,525,000 payable under the New Earn-out Deed is based on the GFA of 455,260 sqm and the Purchase Consideration of RMB2.28 billion and may vary if the Transactional GFA is less than 95.0% of 455,260 sqm as set out below.

Maximum amount which PCRPL may draw down under the New Scenario Earn-out Deed

PCRPL acquires 80.0% interest in Chengdu Longemont Mall RMB226,525,000 and regardless of whether the Purchase Consideration is less than RMB2.28 billion

PCRPL acquires equal to or more than 50.0% interest but RMB226,525,000 less than 80.0% interest in Chengdu Longemont Mall, but the Purchase Consideration is not less than RMB2.28 billion or, even if less than RMB2.28 billion, is not due to the Transactional GFA being less than 455,260 sqm

PCRPL acquires equal to or more than 50.0% interest but RMB226,525,000 X Purchase less than 80.0% interest in Chengdu Longemont Mall, and Consideration as a result of the the Purchase Consideration is less than RMB2.28 billion due reduced Transactional GFA ÷ to the Transactional GFA being less than 455,260 sqm RMB2.28 billion

The Summit Group has agreed to set aside all amounts (such amounts being up to RMB226,525,000) under the New Earn-out Deed by 31 December 2012. Upon the “topping-out”1 of the Chengdu Longemont Mall, PCRT must make the second payment of 40.0% of the Purchase Consideration equivalent to the sum of RMB910.5 million. If Shanghai Summit Pte. Ltd. has not provided RMB226,525,000 under the New Earn-out Deed by 31 December 2012, PCRT has the right to set-off RMB226,525,000 plus interest (such interest to be pegged at the minimum rate that PCRT has to pay in order to borrow to obtain the amount under the New Earn-out Deed, such interest to accrue from 1 January 2013) from the amount of Purchase Consideration owing to the Summit Group at that stage.

Minimum Distribution Amount to be achieved Relevant Period by PCRT

9 June 2011 to 31 December 2011 RMB139.0 million

1 January 2012 to 31 December 2012 RMB228.0 million

1 January 2013 to 30 June 2013 RMB116.0 million

With the total amounts under the New Earn-out Deed and the Amended and Restated Earn-out Deed (amounting to RMB471.5 million), the Trustee-Manager hopes to maintain the forecast total distribution amount for the Forecast Year 2011 and Projection Year 2012 as disclosed in the Prospectus. For the avoidance of doubt, the New Earn-out Deed is not related to any specific property but is tied to distributable income.

1 Refers to the overall completion of the building’s structure which is expected to be in the third quarter of 2013.

5 Rationale for the terms of the New Earn-out

The earn-out amount of S$46.5 million1 (RMB245.0 million) under the Amended and Restated Earn-out Deed is for the period from 9 June 2011 to 31 December 2013. The Trustee-Manager has negotiated the New Earn-out amount of up to RMB226,525,000 for the period from 9 June 2011 to 30 June 2013 when negotiating the terms of the Acquisition2. The Trustee-Manager believes that this period under the New Earn-out is sufficient as the operations of Shenyang Red Star Furniture Mall and Shenyang Longemont Shopping Mall would have stabilised by the first half of 2013. As the Shenyang Longemont Offices are expected to commence business only in the fourth quarter of 2012, the earn-out amounts under the Amended and Restated Earn-out Deed will continue to strengthen cash flows for distribution until 31 December 2013 (thereby providing for one year for the operations of the Shenyang Longemont Offices to stabilise).

(See paragraph 2.4 of the Letter to Unitholders for the details of the New Earn-out Deed.)

Total Acquisition Cost and Payment Schedule

To demonstrate that the agreed property purchase price of RMB10,000 per sqm of GFA on a “completed basis” which forms the basis of the Purchase Consideration is at a favourable value, the Trustee-Manager has commissioned two independent valuers3, CB Richard Ellis (Pte) Ltd (“CBRE”) and Colliers International (Hong Kong) Ltd (“Colliers”) to value the Chengdu Longemont Mall, the details of which are as follows:

1 Based on the exchange rate as set out in the Prospectus. 2 Any drawdowns under the New Earn-out Deed will solely be for distribution income and any undrawn sum as at 30 June 2013 will be returned to the Summit Group. 3 Although the Trustee-Manager is not expressly required to commission two valuations under the Listing Manual of the SGX-ST (the “Listing Manual”), it has voluntarily commissioned an additional independent valuer, Colliers, to provide another valuation of the Chengdu Longemont Mall in order to provide Unitholders with an additional valuation for reference. Accordingly, the valuation of CBRE is as at 31 October 2011 before the entry into of the Original Framework Agreement and Colliers was commissioned after the entry into of the Original Framework Agreement and its valuation is as at 30 November 2011.

6 On GFA basis:

PCRT’s Independent Valuation 20111 Estimated Future Value 20142 Purchase Price Valuers per sqm GFA Value Premium over Value Premium over (Completed per sqm GFA Purchase Price per sqm GFA Purchase Price Basis)

CBRE (as at RMB12,500 25.0% RMB14,930 49.3% 31 October 2011) RMB10,000 Colliers (as at RMB12,700 27.0% RMB15,200 52.0% 30 November 2011)

On GRA3 basis:

PCRT’s Independent Valuation 20111 Estimated Future Value 20142 Purchase Price Valuers per sqm GRA Value Premium over Value Premium over (Completed per sqm GRA Purchase Price per sqm GRA Purchase Price Basis)

CBRE (as at RMB15,600 25.0% RMB18,630 49.3% 31 October 2011) RMB12,485 Colliers (as at RMB15,870 27.0% RMB18,920 52.0% 30 November 2011)

1 The 2011 valuations by CBRE and Colliers are on an “as if complete and fully leased” basis which provides the value of a proposed development project assuming it has already been completed, and utilises market information prevailing as at the date of the valuations. The critical assumptions adopted are: (i) construction of the property had already been completed according to the development schemes and plans made available to the valuer, (ii) all necessary licences, permits or grants to act, to build, use and occupy have been obtained, with no future payments needed to ensure this position, (iii) the property is fully leased under leasing and occupational arrangement typical of the market as at the date of valuation, (iv) revenue and property outgoings are based on prevailing economic and market conditions, and (v) net property income is capitalised for the balance lease term at the prevailing market-derived capitalisation rates. This valuation basis is to be distinguished from the “as is” or “existing condition” bases. 2 The estimates of the future value of the property by CBRE and Colliers in 2014 are for illustrative purposes only and are not a forecast, prediction or valuation, and is an extrapolation of the valuation of the property as at 31 October 2011 (in the case of the independent valuation by CBRE) and 30 November 2011 (in the case of the independent valuation by Colliers) based on prevailing market and economic conditions as at the date of the valuation. The extrapolations are based on the current capitalisation rate, and are not to be misconstrued as a valuation into the future and take into account the level of income and rental escalation which has historically been achieved within the retail sector in China. Estimates of the initial property portfolio of PCRT in 2014 were also provided by CBRE in the Prospectus. The Trustee-Manager is of the view that while the estimated values in 2014 are for illustration purposes only, it will give Unitholders an indication of the value of the relevant property when it is completed and commences operations by 2014. The estimated future values (which are not to be construed as a valuation at a future date) were estimated by extrapolating the revenue and property outgoings with certain assumptions made on rental growth, operating costs escalation, renewals & lease up periods, vacancy/bad debt allowances, etc. The net property income in the extrapolations is then capitalised using an appropriate rate for the balance lease term in year 2014. It is not a forecast or prediction or valuation and the extrapolations are based on prevailing market and economic conditions as at the date of valuation. The fundamental consideration in the extrapolation exercises is that each of the assets has an appropriate tenancy mix and asset management strategy to achieve its full income potential. It also takes into account the level of income/rental escalation which has historically been achieved within the retail sector in China. 3 “GRA” refers to the gross retail area, being the gross floor area excluding the area for carpark space.

7 The total cost of the Acquisition (the “Total Acquisition Cost”) is currently estimated to be approximately S$477.3 million, comprising:

(a) the Purchase Consideration of RMB2.28 billion (S$464.0 million);

(b) the acquisition fee (“Acquisition Fee”) of approximately S$6.3 million (being 1.35% of the Purchase Consideration) payable to the Trustee-Manager pursuant to the trust deed dated 22 February 2011 constituting PCRT (as amended) (the “Trust Deed”) will be paid in Units1. The Acquisition Fee Units shall be payable to the Trustee-Manager upon the satisfaction of both the following conditions (i) the completion of the acquisition by PCRPL of the BVI SPV and (ii) the obtaining of the four permits2 by Chengdu Ruifeng and the amount of the Acquisition Fee will be based on the Purchase Consideration computed based on the GFA as set out in the Construction Planning Certificate and assuming that PCRT acquires a 50.0% interest in Chengdu Longemont Mall Development. Should PCRT exercise the option to increase its stake in Chengdu Longemont Mall Development, an additional amount of Acquisition Fee will be payable upon such exercise. The Acquisition Fee Units are expected to be issued in the first half of 2012 after the satisfaction of the abovementioned two conditions. Although all Acquisition Fee Units once issued will be entitled to the distributions payable after their date of issuance, the Acquisition Fee Units in this case will not be entitled to any distributions in respect of the distribution period from 1 January 2012 to 31 December 2012; and

(c) the estimated professional and other fees and expenses incurred or to be incurred by PCRT in connection with the Acquisition of approximately S$7.0 million (inclusive of the professionals’ fees and expenses incurred or to be incurred for the amendments to the Credit Facilities Agreement (as defined herein) to fund part of the first 15.0% of the Purchase Consideration of approximately S$2.1 million, the upfront fees under the Credit Facilities Agreement of approximately S$4.3 million and miscellaneous expenses incurred in connection with the Acquisition of approximately S$0.6 million) which will be borne by PCRT.

1 The actual issue price of the Acquisition Fee Units to be issued to the Trustee-Manager will be at the relevant market price, being the volume weighted average price for a Unit for all trades on the SGX-ST in the ordinary course of trading on the SGX-ST for the period of 10 business days immediately preceding the relevant business day. “Business day” for this purpose means any day (other than a Saturday, Sunday or gazetted public holiday) on which commercial banks are generally open for business in Singapore and the SGX-ST is open for trading. Although there are no restrictions against the Trustee-Manager selling such Acquisition Fee Units immediately upon issuance, the Trustee-Manager will not transfer these Acquisition Fee Units for a period of time in order to give effect to the non-entitlement of these Acquisition Fee Units to distributions in respect of the period from 1 January 2012 to 31 December 2012. In this regard, the Trustee-Manager will not transfer these Acquisition Fee Units from the time of their issuance until after the books closure date for the distributions in respect of the period from 1 July 2012 to 31 December 2012. 2 Refers to the four approvals from the PRC governmental authorities, being (i) the land use right certificate (土地使用證), (ii) the construction land planning permit (建設用地規劃許可證), (iii) the construction project planning permit (建設工程規劃許可證) and (iv) the construction permit (建築工程施工許可證), which are expected to be received in the first quarter of 2012.

8 Pursuant to the terms of the Framework Agreement, the Purchase Consideration (assuming a 50.0% interest in Chengdu Longement Mall at an assumed Transactional GFA of 455,260 sqm) shall be paid in stages on a progressive basis, being:

First Payment: 15.0%, being RMB341.4 million, payable upon obtaining the “four permits”1 in connection with the Underlying Land and construction of the Chengdu Longemont Mall and satisfaction of certain conditions precedent2 (targeted to be payable in the first quarter of 2012)3;

Second Payment: an additional 40.0%, being RMB910.5 million, payable upon the “topping-out”4 of the Chengdu Longemont Mall (targeted to be payable in the third quarter of 2013);

Third Payment: an additional 40.0%, being RMB910.5 million, payable upon the commencement of operations of no less than 70.0% of the commercial area of the Chengdu Longemont Mall (targeted to be payable in the third quarter of 2014); and

Fourth & Final Payment: the final 5.0%, being RMB113.8 million, being payable upon the obtaining of the relevant building title deed as well as other relevant governmental approvals5 in respect of the Chengdu Longemont Mall (targeted to be payable in the fourth quarter of 2014).

The cash outlay of PCRT will be reduced if Chengdu Ruifeng is able to obtain an onshore debt facility secured by, inter alia, a mortgage over Chengdu Longemont Mall to partly fund the construction costs.

If the construction is delayed or cannot be completed, PCRT’s progress payments and corresponding funding requirements will be postponed. In the event that the construction cannot be completed, PCRT can undertake to complete the construction of the property. In the event that construction cannot be completed, PCRT would only have paid either 15.0% or 55.0% of the Purchase Consideration, if the four permits have been received or if the building has topped out, respectively. The funding demands on PCRT are conservative in relation to the stage of development of the asset. Due to this favourable back-loaded payment schedule, if construction halts, the Trustee-Manager expects that the remaining funds meant to be subsequently paid to the Summit Group (85.0% and 45.0%, respectively), together with any onshore construction loans, will be sufficient to complete the construction of the asset, barring unforeseen circumstances. When the next 40.0% of the Purchase Consideration is due for payment by

1 Refers to the four approvals from the PRC governmental authorities, being (i) the land use right certificate (土地使用證), (ii) the construction land planning permit (建設用地規劃許可證), (iii) the construction project planning permit (建設工程規劃許可證) and (iv) the construction permit (建築工程施工許可證), which are expected to be received in the first quarter of 2012. 2 The conditions precedent include: (i) approval of the Unitholders for the Acquisition being obtained, (ii) the Credit Facilities Agreement Lenders agreeing to amendments to the Credit Facilities Agreement for the purposes of the Acquisition, (iii) the BVI SPV holding the entire issued share capital of the Hong Kong SPV so that the BVI SPV indirectly holds 50.0% of Chengdu Ruifeng, and PCRT being satisfied with the due diligence of the BVI SPV and the Hong Kong SPV, (iv) the BVI SPV Share Transfer Agreement has been signed and takes effect, and Ms Tong Yuqian and PCRPL having completed the transfer of the shares of the BVI SPV and (v) Chengdu Ruifeng having acquired the (Interim) Qualification Certificate for Real Estate Development Enterprise. 3 PCRT will only make the first payment of 15.0% when the four permits are received by Chengdu Ruifeng and approval from Unitholders for the Acquisition are obtained, after which PCRT will already have 50.0% ownership of Chengdu Ruifeng, which holds the land title. Subsequent progress payments by PCRT will only be due if construction progresses and key construction milestones are achieved. The second payment of 40.0% will be due when the building tops out. PCRT is expected to obtain a 50.0% interest in Chengdu Ruifeng, which holds the land title by the first half of 2012. 4 Refers to the overall completion of the building’s structure. 5 Other than the building title deed which is the main governmental approval, the other governmental approvals, if required, are general administrative in nature.

9 PCRT, the mall will already be trading. As such, PCRT will no longer be exposed to any risk of construction delay by this time. The Trustee-Manager will actively participate in the development of the mall, including attending project meetings, making key design decisions and closely monitoring the construction progress. The Trustee-Manager will thus know if the construction of the mall will be delayed and whether the Summit Group is able and willing to carry on with its development. The Trustee-Manager will be in a position to decide if PCRT is then required to take over the mall’s construction. There are no penalties for delay in construction. With the payment schedule being back-loaded and beneficial to PCRT, it is in the Summit Group’s interests for construction to progress as quickly as possible, so as to receive payment from PCRT. Furthermore, being a part-owner, the Summit Group’s interests are aligned with PCRT for the asset to be completed and begin trading as soon as possible. As the Trustee-Manager will be actively involved in the development of the mall, any serious delays in construction will be quickly detected and PCRT will be in a position to decide whether or not to take over and expedite construction. The Trustee-Manager will endeavour to ensure that the property will commence operations as expected.

(See paragraph 2 of the Letter to Unitholders for further details.)

Rationale for the Acquisition

The Trustee-Manager believes that the Acquisition will bring the following key benefits to Unitholders:

(1) Accretive Acquisition

Distribution Per Unit (“DPU”) Accretive: The Trustee-Manager will endeavour to ensure that the Acquisition is DPU-accretive, meaning that the yield on cost achieved for the Acquisition is higher than the yield on cost of PCRT’s Existing Portfolio (as defined herein).1

Net Asset Value (“NAV”) Accretive: The Chengdu Longemont Mall’s 2011 and 2014 independent valuations2 by CBRE are RMB12,500 per sqm of GFA as at 31 October 2011 and RMB14,930 per sqm GFA in 2014, which is a premium of 25.0% and 49.3%, respectively over the agreed property purchase price of RMB10,000 per sqm of GFA which forms the basis of the Purchase

10 Consideration of approximately RMB2.28 billion (S$464.0 million). The Acquisition is expected to increase PCRT’s adjusted pro forma NAV per Unit of S$0.991 to S$1.192 based on CBRE’s estimated future values of all the properties of PCRT in 2014, when the Chengdu Longemont Mall commences operations. Assuming the Acquisition was completed on 30 September 2011, the Acquisition is expected to increase PCRT’s adjusted pro forma NAV per Unit of S$0.673 to S$0.764 as at 30 September 2011.

The Chengdu Longemont Mall’s 2011 and 2014 independent valuations by Colliers are RMB12,700 per sqm of GFA as at 30 November 2011 and RMB15,200 per sqm GFA in 2014, which is a premium of 27.0% and 52.0%, respectively over the agreed property purchase price of RMB10,000 per sqm of GFA which forms the basis of the Purchase Consideration of approximately RMB2.28 billion (S$464.0 million).

(2) Strategic Location with Direct Connectivity to Chengdu East High Speed Railway Station

The Chengdu Longemont Mall is strategically located in Chengdu’s new CBD, directly connected to the Chengdu East HSR Station, one of the largest integrated passenger transport hub in western China. The Chengdu East HSR Station comprises inter-city railway, intra-city subway (expected to serve Lines 2 and 7), long and short distance bus routes and taxi connections, and is supported by a large residential and office population catchment. The Chengdu East HSR Station is likely to generate relatively high levels of visitation and exposure to the Chengdu Longemont Mall from both local residents from throughout Chengdu as well as tourists visiting Chengdu.

1 The adjusted pro forma NAV per Unit of S$0.99 excludes deferred tax and is based on the estimated future values of the Properties (as defined in the Prospectus) in 2014 from CBRE and is based on all the assumptions and adjustments set out in the section “Unaudited Pro Forma Consolidated Balance Sheet as at the Listing Date — Pro Forma NAV per Unit for illustrative purposes” of the Prospectus. 2 The adjusted pro forma NAV per unit of S$1.19 is computed by applying the estimated future value of the Chengdu Longemont Mall in 2014 from CBRE of RMB14,930 per sqm of GFA to the adjusted pro forma NAV per unit of S$0.99 derived in the Prospectus and based on all the assumptions and adjustments set out therein, after incorporating the following key adjustments and assumptions, and excluding deferred tax: (i) the GFA of the Chengdu Longemont Mall for the purposes of computing the Purchase Consideration under the Framework Agreement is 455,260 sqm, (ii) the RMB amount in respect of the estimated future value and Purchase Consideration of the Chengdu Longemont Mall is translated into Singapore dollars based on the foreign exchange rate of RMB4.9061 = S$1.00, (iii) the number of Units are assumed to remain as that used in deriving the adjusted pro forma NAV per unit of S$0.99 in the Prospectus, and (iv) the NAV per unit increase is computed based on the increase in valuation of the estimated future value of the Chengdu Longemont Mall which is an extrapolation of the “as if complete and fully leased” valuation by CBRE as at 31 October 2011 compared to the Purchase Consideration. 3 The adjusted pro forma NAV per Unit of S$0.67 excludes deferred tax and is based on the valuation by CBRE of the Properties (as defined in the Prospectus) as at 31 December 2010 and is based on all the assumptions and adjustments set out in the section “Unaudited Pro Forma Consolidated Balance Sheet as at the Listing Date — Pro Forma NAV per Unit for illustrative purposes” of the Prospectus. Deferred tax which is payable on the profit from the disposal of property, is excluded as PCRT intends to hold its assets on a long-term basis. The amount of such deferred tax depends on the method of disposal of the property. 4 The adjusted pro forma NAV per unit of S$0.76 is computed by applying the valuation by CBRE of the Chengdu Longemont Mall as at 31 October 2011 of RMB12,500 per sqm of GFA to the adjusted pro forma NAV per unit of S$0.67 derived in the Prospectus and based on all the assumptions and adjustments set out therein, after incorporating the following key adjustments and assumptions, and excluding deferred tax: (i) the GFA of the Chengdu Longemont Mall for the purposes of computing the Purchase Consideration under the Framework Agreement is 455,260 sqm, (ii) the RMB amount in respect of the valuation and Purchase Consideration of the Chengdu Longemont Mall is translated into Singapore dollars based on the foreign exchange rate of RMB4.9061 = S$1.00, and (iii) the number of Units are assumed to remain as that used in deriving the adjusted pro forma NAV per unit of S$0.67 in the Prospectus.

11 (3) Favourable Payment Schedule Provides Funding Flexibility and Reduces Costs

Only 15.0% of the Purchase Consideration is required to be paid in the initial stage of the development in 2012. The payment for the remaining 85.0% of the Purchase Consideration will only need to be made in 2013 and 2014.

The largely back-loaded payment structure reduces the amount which PCRT needs to finance upfront and consequently, reduces interest and other related expenses for the Acquisition in such period.

(See paragraph 2.6 of the Letter to Unitholders for further details of the payment schedule.)

(4) Increases PCRT’s Asset Size to S$1.8 billion and Generates Additional 2014 Income Stream

The Acquisition is expected to increase PCRT’s asset size from S$1.1 billion1 to S$1.8 billion2 on the completion of the Acquisition. PCRT is also expected to benefit from the additional income stream when the Chengdu Longemont Mall commences operations in the third quarter of 2014.

(5) Strengthens Retail Presence in Chengdu and Economies of Scale

The Acquisition would not only strengthen PCRT’s retail presence in Chengdu but also cater to different tenancy and shopper demands in the eastern and western parts of the city.

PCRT has the right to acquire the Chengdu Qingyang Guanghua Shopping Mall located in Western Chengdu. The completion of the Chengdu Qingyang Guanghua Shopping Mall is targeted for the fourth quarter of 2013, with commencement of operations targeted in the second quarter of 20143. The Chengdu Longemont Mall, located within the Third Ring Road of Eastern Chengdu, is expected to provide PCRT with economies of scale in overall resource planning and operations in Chengdu. With two malls within the PCRT portfolio in the same city, administrative resources such as human resources, centre management, leasing and operations may be shared between the two property managers of the respective malls. Having a greater retail area may also aid both property managers in negotiating contracts with third-party service providers such as security and cleaning companies.

1 Based on the initial property portfolio of PCRT which was valued by CBRE as at 31 December 2010 on an “as if complete and fully leased” basis. 2 Based on the initial property portfolio of PCRT which was valued by CBRE as at 31 December 2010 and the value of Chengdu Longemont Mall’s 2011 independent valuation by CBRE of RMB12,500 per sqm of GFA as at 31 October 2011 on an “as if complete and fully leased” basis and based on the foreign exchange rate of RMB4.9061 = S$1.00. 3 The expected timing for the completion and commencement of operations as disclosed in the Prospectus.

12 Method of Financing the Acquisition

The Trustee-Manager intends to fund the Acquisition wholly by debt financing through one or a combination of the following methods:

(i) the Trustee-Manager will seek the consent of DBS Bank Ltd. and Standard Chartered Bank (the “Credit Facilities Agreement Lenders”), the lenders of its existing Credit Facilities Agreement1 (as defined herein), to allow it to apply part of the proceeds from the Credit Facilities Agreement towards payments under the Framework Agreement. In order to obtain the Lenders’ consent, the Trustee-Manager is taking steps to secure onshore PRC debt financing to finance part of the Acquisition and Development Costs, to be secured over Foshan Yicui Shijia Shopping Mall and Chengdu Qingyang Guanghua Shopping Mall. In this regard, the Trustee-Manager has received onshore PRC debt financing proposals from banks for an amount of RMB420.0 million;

(ii) the Trustee-Manager is also seeking to increase the facility limit under the Credit Facilities Agreement by approximately S$70.0 million by bringing in more lenders under the Credit Facilities Agreement, to allow it to apply additional proceeds from the Credit Facilities Agreement towards payments under the Framework Agreement. The Trustee-Manager will make an announcement with respect to any such increase in the facility limit when the details have been finalised;

(iii) the Trustee-Manager has also established its S$500,000,000 Multicurrency Medium Term Note Programme (“MTN Programme”) on 20 January 2012 and it expects to tap the debt capital markets through draw downs under the MTN Programme2; and

(iv) when the Chengdu Longemont Mall commences operations and receives its building title deed, the Trustee-Manager may take a new offshore debt facility (“New Loan Facility”) which is secured on the shares of the subsidiaries of PCRT which own directly or indirectly the Chengdu Longemont Mall Interest. The amount of the New Loan Facility will be determined by the Trustee-Manager at the relevant time, after taking into account the amounts raised under the Credit Facilities Agreement and the MTN Programme.

The first 15.0% of the Purchase Consideration and the 40.0% of the Purchase Consideration payable at the stage of “topping-out”3 of the Chengdu Longemont Mall are expected to be funded by a combination of the proceeds from the Credit Facilities Agreement and draw downs under the MTN Programme.

Financing for the payment of the remaining 45.0% of the Purchase Consideration, which will be due when the Chengdu Longemont Mall commences operations and receives its building title deed, is expected to be from the New Loan Facility and further drawdowns under the MTN Programme.

1 The Trustee-Manager, on behalf of PCRT, had on 27 May 2011 entered into a facilities agreement (the “Credit Facilities Agreement”) with DBS Bank Ltd. and Standard Chartered Bank for financing facilities (the “Credit Facilities”) in an aggregate amount of S$325.0 million comprising (i) committed term loan facilities of S$195.0 million to finance distributions to Unitholders, interest payments under the Credit Facilities and part of the progress payments by PCRT for the acquisition of Foshan Yicui Shijia Shopping Mall and Chengdu Qingyang Guanghua Shopping Mall as well as the development cost of Chengdu Qingyang Guanghua Shopping Mall (the “Acquisition and Development Costs”) and (ii) an uncommitted revolving credit facility of S$130.0 million to finance the remaining Acquisition and Development Costs. Further details of the Credit Facilities Agreement are set out in the section “Use of Proceeds” of the Prospectus. 2 Unitholders should note that the MTN Programme is not a committed line of credit and any issue of notes under the MTN Programme is subject to the market conditions at the relevant time. 3 Refers to the overall completion of the building’s structure.

13 In addition, the Trustee-Manager and the Summit Group expect to source a PRC onshore debt facility of approximately RMB1.138 billion (S$232.0 million) to be taken by Chengdu Ruifeng to fund the construction costs of the Chengdu Longemont Mall which is expected to be secured by way of a mortgage over the Chengdu Longemont Mall. In such an event, the cash outlay of PCRT will be reduced by 50.0% of the amount to be funded by such debt facility and is expected to be approximately RMB1.707 billion1. As PCRT is investing in 50.0% of Chengdu Longemont Mall on a “completed” basis at RMB10,000 per sqm of GFA, the risks of construction costs overruns will be borne by the Summit Group alone. PCRT will not be bearing additional construction costs. If an onshore project development loan is taken by Chengdu Ruifeng to fund construction costs, PCRT’s cash outlay for the Acquisition will be correspondingly reduced by PCRT’s share of Chengdu Ruifeng’s onshore debt.

If the Trustee-Manager is unable to fully fund the second payment of 40.0% of the Purchase Consideration or the remaining 45.0% of the Purchase Consideration by debt financing due to the volatile market conditions, the Trustee-Manager may fund all or a part of this amount through equity fund raising or the sale of Foshan Yicui Shijia Shopping Mall or Chengdu Qingyang Guanghua Shopping Mall. In making its decision, the Trustee-Manager will take into account, among other things, the prevailing market conditions, interest rate environment, debt expiry profile and the covenants and conditions associated with each financing option, so that the Acquisition will be in the overall interest of PCRT and Unitholders.

(See paragraph 5 of the Letter to Unitholders for further details.)

Interested Person Transaction in connection with the Acquisition and the Property Management Agreement

As at the Latest Practicable Date, as Mr Tong Jinquan wholly owns Shanghai Summit Pte. Ltd. which holds 167,142,000 Units (comprising 14.9% of the Existing Units (as defined herein)), Mr Tong Jinquan is deemed to be interested in 167,142,000 Units. As stated in the Prospectus, for purposes of good corporate governance, the Trustee-Manager has volunteered that from the Listing Date, for so long as Mr Tong Jinquan and his associates own 5.0% or more of the aggregate number of Units in issue, Mr Tong Jinquan and his associates shall be deemed as an “interested person” under the Listing Manual. Accordingly, as Mr Tong Jinquan and his associates own 14.9% of the Existing Units as at the Latest Practicable Date, each of the Acquisition pursuant to the entry into by PCRPL of the Framework Agreement with Shanghai Summit Pte. Ltd. and the entry into of the Property Management Agreement with a member of the Summit Group who will be an associate of Mr Tong Jinquan will be regarded as an “interested person transaction” under Chapter 9 of the Listing Manual. As the value of the Acquisition exceeds 5.0% of the value of PCRT’s latest unaudited net tangible assets (based on the PCRT Unaudited Financial Statements)2, Rule 906 of the Listing Manual requires Unitholders’ approval for the Acquisition.

(See paragraph 4.2.1 of the Letter to Unitholders for further details.)

1 If Chengdu Ruifeng is able to take an onshore PRC development loan, the amount that the shareholders of Chengdu Ruifeng will need to inject as equity capital to fund the construction costs will be decreased by the amount of the development loan. Assuming that PCRT is investing only in 50.0% of the Chengdu Longemont Mall, then the cash outlay will be reduced by 50.0%. 2 The PCRT Unaudited Financial Statements is used as PCRT was only listed on 9 June 2011 and therefore has not yet issued any audited financial statements.

14 Major Transaction in connection with the Acquisition

As the aggregate value of the consideration given, compared with PCRT’s market capitalisation, exceeds 20.0%, the Acquisition is classified as a “major transaction” by PCRT under Chapter 10 of the Listing Manual.

(See paragraph 4.2.1 of the Letter to Unitholders for further details.)

(2) Resolution 2: The Proposed Trust Deed Supplement in relation to the Form of Payment of Management Fees (Extraordinary Resolution)

The proposed supplement to the Trust Deed to authorise the Trustee-Manager to elect to receive its management fees in either cash or Units even when the issue price (which is equal to the Market Price1) of each Unit is below the NAV per Unit at such point where the management fees are payable to the Trustee-Manager.

Rationale for the Proposed Trust Deed Supplement in relation to the Form of Payment of Management Fees

The Trustee-Manager had indicated in the Prospectus that its base fee and performance fee are payable in the form of cash and/or Units (as it may elect), except where the issue price (which is equal to the Market Price (as defined in the Trust Deed)) of each Unit is below the NAV per Unit at such point in time, the Trustee-Manager shall elect to receive the base fee and the performance fee wholly in cash to assure Unitholders that it will not receive Units at a price that is below NAV per Unit.

However, given the current market volatility and the prevalent trend of listed entities trading at share or unit prices that are below their NAV, the Trustee-Manager is of the view that that the Trust Deed Supplement in relation to the form of payment of Management Fees which will enable the Trustee-Manager to have the flexibility to elect to receive its management fees in either cash or Units even when the issue price of each Unit is below the NAV per Unit, where the payment of the fees in either cash or Units (as the case may be) is in the best interests of Unitholders and PCRT.

(See paragraph 7.2 of the Letter to Unitholders for further details.)

(3) Resolution 3: The Proposed Trust Deed Supplement in relation to Acquisition Fees (Extraordinary Resolution):

The proposed supplement to the Trust Deed for the purpose of allowing the Trustee-Manager to receive its acquisition fee (“Acquisition Fee”) which it is entitled to under the Trust Deed on (i) the completion of the subscription or, as the case may be, acquisition of the shares of the special purpose company (“SPV”) which will directly or indirectly own the land and undertake development of the land and (ii) when the SPV directly or indirectly obtains title to the land and the necessary permits2 in connection with the land and the construction of the asset having been obtained.

1 Please refer to the “Glossary” for the definition of “Market Price” as defined in the Trust Deed. 2 As at the date of this Circular, the necessary permits from the PRC governmental authorities are (i) the land use right certificate (土地使用證), (ii) the construction land planning permit (建設用地規劃許可證), (iii) the construction project planning permit (建設工程規劃許可證) and (iv) the construction permit (建築工程施工許可證).

15 Rationale for the Proposed Trust Deed Supplement in relation to Acquisition Fees

The Trust Deed does not expressly provide for the process for the payment of the Acquisition Fee if PCRT invests in Development Trust Assets in the way in which it is investing in the Chengdu Longemont Mall. The proposed Trust Deed Supplement in relation to Acquisition Fees sets out the conditions for the Acquisition Fee to be payable when PCRT invests in Development Trust Assets in such a manner.

(See paragraph 8.2 of the Letter to Unitholders for further details.)

None of Resolution 1, Resolution 2 or Resolution 3 are inter-conditional upon the passing of one another.

16 INDICATIVE TIMETABLE

The timetable for the events which are scheduled to take place after the Extraordinary General Meeting (“EGM”) is indicative only and is subject to change at the Trustee-Manager’s absolute discretion. Any changes (including any determination of the relevant dates) to the timetable below will be announced.

Event Date and Time

Last date and time for lodgement of Proxy Forms : Saturday, 11 February 2012 at 10.30 a.m. Date and time of the EGM : Monday, 13 February 2012 at 10.30 a.m.

17 PERENNIAL CHINA REAL ESTATE TRUST MANAGEMENT PTE. LTD. (as trustee-manager of Perennial China Retail Trust)

Directors of the Trustee-Manager Registered Office

Mr Boon Swan Foo (Chairman & Independent 6 Temasek Boulevard Non-Executive Director) #25-04/05 Suntec Tower Four Mr Wong Tui San (Independent Non-Executive Director) Singapore 038986 Mr Pok Soy Yoong (Independent Non-Executive Director) Mr Kuok Khoon Hong (Independent Non-Executive Director) Mr Pua Seck Guan (Executive Director and Chief Executive Officer) Ms Tan Ser Joo (Executive Director and Head of Investment & Asset Management) 20 January 2012

To: Unitholders of Perennial China Retail Trust

Dear Sir/Madam

1. SUMMARY OF APPROVALS SOUGHT

The following sets out the resolutions for which approval is sought by the Trustee-Manager from Unitholders. Approval by way of an Ordinary Resolution (as defined herein) is required in respect of Resolution 1 and approval by way of an Extraordinary Resolution (as defined herein) is required in respect of Resolutions 2 and 3 as set out below:

(1) Resolution 1: The Proposed Acquisition of a 50.0% Interest in Chengdu Longemont Shopping Mall from an Interested Person;

(2) Resolution 2: The Proposed Trust Deed Supplement in relation to the Form of Payment of Management Fees; and

(3) Resolution 3: The Proposed Trust Deed Supplement in relation to Acquisition Fees.

None of Resolution 1, Resolution 2 or Resolution 3 are inter-conditional upon the passing of one another.

2. THE PROPOSED ACQUISITION OF A 50.0% INTEREST IN CHENGDU LONGEMONT SHOPPING MALL DEVELOPMENT FROM AN INTERESTED PERSON

2.1 Description of the Property

1 Based on architectural plans prepared by the relevant architects and may differ from the actual GFA of the completed property. 2 Based on information provided by the Summit Group.

18 Chengdu’s intra-city subway (expected to serve Lines 2 and 7), long and short distance bus routes and taxi connections. An area spanning 12 square kilometres surrounding the Chengdu East HSR Station has been designated as Chengdu’s new CBD1 and is increasingly being built-up with many residential apartments, commercial offices and business centres.

The Chengdu Longemont Mall is one part of the Chengdu Longemont mixed-use development that the Summit Group (comprising Shanghai Summit (Group) and its subsidiaries) is developing on four plots of prime land surrounding and adjacent to the Chengdu East HSR Station. Amongst the four land plots, the land plot on which the Chengdu Longemont Mall will be sited is considered by the Trustee-Manager to be the most prime in terms of connectivity, as it is strategically located at the intersection of two of Chengdu’s intra-city subway lines (expected to serve Lines 2 and 7) and is expected to have immediate access to the mixed-use development’s local bus interchange as well as the taxi stand. The Summit Group is expected to develop office towers, a convention centre, a hotel and a wholesale centre on the remaining three plots of land2.

The Chengdu Longemont Mall will offer a myriad of retail and entertainment choices targeted at middle-income shoppers, including a supermarket, an amusement park, local and international fashion, food and beverage brands and other retailers. Construction of the Chengdu Longemont Mall will commence when the fourth permit being the construction permit (建築工程施工許可證) is received in the first quarter of 2012. The excavation works on the Chengdu Longemont Mall commenced in December 2011. The Chengdu Longemont Mall is expected to commence operations in the third quarter of 2014.

(See Appendix D for the Chengdu Retail Market Review by the Independent Property Consultant for further details.)

The State-owned Land Use Right Certificate in respect of the Chengdu Longemont Mall will be held in the name of Chengdu Ruifeng, which will confer on Chengdu Ruifeng the right to use the Underlying Land.

Although Chengdu Ruifeng has not obtained the four permits from the PRC governmental authorities, being the land use right certificate (土地使用證), the construction land planning permit (建設用地規劃許可證), the construction project planning permit (建設工程規劃許可證) and the construction permit (建築工程施工許可證), the Chengdu Land and Resources Bureau has confirmed in writing that the land use right in respect of the Underlying Land can be granted to Chengdu Ruifeng. Chengdu Ruifeng has submitted the relevant documents for the purpose of obtaining the land use right certificate to the Chengdu Land and Resources Bureau, which has accepted the documents. Chengdu Ruifeng is expected to receive the four permits in the first quarter of 2012 when construction of the mall will commence.

1 Based on the publication of the Management Committee of Intercity Travel Business City of Chengdu New Railway Passenger Station. The Management Committee of Intercity Travel Business City of Chengdu New Railway Passenger Station has not provided its consent to the inclusion of the information extracted from the relevant report published by it and therefore is not liable for such information. While the Trustee-Manager has taken reasonable actions to ensure that the information from the relevant report published by the Management Committee of Intercity Travel Business City of Chengdu New Railway Passenger Station is reproduced in its proper form and context, and that the information is extracted accurately and fairly from such report, neither the Trustee-Manager nor any other party has conducted an independent review of the information contained in such report nor verified the accuracy of the contents of the relevant information. 2 Based on the plans of the Summit Group and are subject to changes.

19 2.2 Details of the Acquisition

PCRPL (a wholly-owned subsidiary of PCRT) Mr Tong Jinquan, Shanghai Summit, Chengdu Summit, Chengdu Ruifeng, Shanghai Summit Pte. Ltd., PREPL and Ms Tong Yuqian (the daughter of Mr Tong Jinquan) entered into the Framework Agreement which will ultimately lead to PCRPL acquiring the Chengdu Longemont Mall Interest at the Purchase Consideration of approximately RMB2.28 billion1 (S$464.0 million2).

(See Appendix A for further details about the Chengdu Longemont Mall. See paragraph 2.4 for details of the flexibility to increase PCRT’s interest in Chengdu Longemont Mall and paragraph 2.5 for details of the New Earn-out arrangements that the Trustee-Manager has negotiated with the Summit Group.)

The chart below illustrates the amount payable by PCRT in the various scenarios.

Planned GFA: 455,260 sqm Receipt of the construction project planning permit from the government authority Transactional GFA: Is the GFA approved by the authority in the construction project planning permit less than 95.0% of the Planned GFA?

Ye s No

Does PCRPL intend Indicative Purchase to exercise option to Consideration = increase stake up to Transactional GFA 80.0%? x RMB10,000 per sqm x 50.0%

Ye s No

Indicative Purchase Consideration Indicative Purchase = RMB10,000 per sqm x Transactional Consideration = 10,000 per sqm GFA x % PCRPL intends to acquire x Transactional GFA x 50.0% (subject to RMB2.28 billion cap) (subject to RMB2.28 billion cap)

Completion of Chengdu Longemont Mall

Is the Final GFA as stated in the Building Title Certificate different from the Transactional GFA?

Ye s N o

Is the Final GFA more than 3.0% higher Final Purchase Indicative Purchase = than the Transactional GFA? Consideration Consideration

Ye s N o

Final Purchase 3 Indicative Purchase Final Purchase Final GFA Indicative Purchase = (1 + ) x = x Consideration 100 Consideration Consideration Transactional GFA Consideration

The Framework Agreement was entered into pursuant to the Chengdu Longemont Mall Interest Option granted on 21 March 2011 by Shanghai Summit (Group) and Shanghai Summit to PREPL and PCRPL for the acquisition of, inter alia, the Chengdu Longemont Mall Interest. With the Acquisition, PCRT has up to 8 June 2012 to exercise the option to acquire 50.0% of approximately another 544,740 sqm of GFA in the Chengdu Longemont Mall mixed-use development at the same price of RMB10,000 per sqm on a completed basis.

1 If the Final GFA as stated in the Building Title Certificate is more than the Transactional GFA approved by the authority in the construction project planning permit, the Purchase Consideration will be increased, but such increase will not exceed 3.0% of the Purchase Consideration, even if the Final GFA exceeds the Transactional GFA by more than 3.0%. 2 Except where the exchange rate between the Chinese Renminbi and the Singapore dollar is expressly stated otherwise, the Chinese Renminbi amounts in this Circular have been translated into Singapore dollars based on the foreign exchange rate of RMB4.9061 = S$1.00.

20 The Chengdu Longemont Mall Interest Option provides, inter alia, that the quality of the commercial components of the Chengdu Longemont Mall is to be comparable to Shenyang Longemont Shopping Mall1 and all planning, design, organisation, tenant mix and leasing of the commercial component of the Chengdu Longemont Mall has to be agreed to by PREPL and PCRPL. Under the Chengdu Longemont Mall Interest Option, it is contemplated that 5.0% of the purchase consideration be paid to Shanghai Summit upon entry into of a transfer agreement. In the case of the proposed Acquisition, 5.0% of the Purchase Consideration will amount to approximately RMB113.8 million. To give effect to this, Shenyang Summit had, on 17 November 2011, on behalf of PCRT and the Summit Group, paid to Shanghai Summit a refundable deposit of RMB194.0 million, of which PCRT’s 50.0% interest amounts to RMB97.0 million, which is equivalent to approximately 4.3% of the Purchase Consideration2. The remaining 0.7% of the Purchase Consideration (equivalent to RMB33.6 million, of which PCRT’s 50.0% interest amounts to RMB15.9 million) will be paid by Shenyang Summit in due course and is expected to be paid during the first quarter of 2012. However, the non-payment of this balance amount will not affect the Chengdu Longemont Mall Interest Option.

The remaining 50.0% or less interest in the Chengdu Longemont Mall will be held by the Summit Group (comprising Shanghai Summit (Group) and its subsidiaries), of which Mr Tong Jinquan is the founder.

2.3 Overview of the Framework Agreement

Under the Framework Agreement, it is intended that the Underlying Land be transferred to Chengdu Ruifeng, which will be 50.0% owned by the Hong Kong SPV. The Hong Kong SPV will in turn be wholly-owned by the BVI SPV which will be held by PREPL on trust for Ms Tong Yuqian, the daughter of Mr Tong Jinquan. The following events will take place after approximately three months from the date of the Framework Agreement: (i) the trust will be terminated and PREPL will transfer the legal title to the shares of the BVI SPV to Ms Tong Yuqian3 and (ii) the Acquisition will be made by PCRT through the acquisition by PCRPL of the BVI SPV from Ms Tong Yuqian, after which the remaining 50.0% direct interest in Chengdu Ruifeng will be owned by Shanghai Summit. By PREPL holding the shares of the BVI SPV on trust for Ms Tong Yuqian (being a member of the Summit Group who is the ultimate beneficial owner of the Underlying Land prior to the proposed Acquisition being implemented), PREPL is able to safeguard the interests of PCRT in its investment in Chengdu Ruifeng as PREPL will be able to supervise the incorporation process and the activities of the BVI SPV prior to the termination of the trust and the sale of the shares by Ms Tong Yuqian to PCRPL.

1 Shenyang Longemont Shopping Mall, one of PCRT’s existing assets in the IPO portfolio, is a 10-storey shopping mall which opened on 1 October 2011. 2 As disclosed in the SGXNET announcement of the Trustee-Manager dated 25 November 2011. 3 Three months is the estimated time required for the necessary legal formalities to be carried out to effect the conversion of Chengdu Ruifeng into a sino-foreign equity joint venture enterprise.

21 2.3.1 Restructuring Steps

The key steps in the restructuring process in order for PCRPL to acquire the Chengdu Longemont Mall Interest are set out below.

Prior to Restructuring

Shanghai Summit wholly owns Chengdu Summit which has a registered capital of RMB10.0 million. Chengdu Summit wholly owned the land in respect of the Chengdu Longemont City site (成都龍之夢土地) which measures approximately 164,872.3 sqm and was sub-divided into four plots, one of which is the Underlying Land.

Shanghai Summit has also set up Chengdu Ruifeng, which is wholly-owned by Shanghai Summit and with a registered capital of RMB10.0 million.

Chengdu Summit has applied to the relevant Chengdu governmental authority for the Chengdu Longemont City site to be sub-divided into four plots and for the Underlying Land to be registered in the name of Chengdu Ruifeng.

Step 1 — Establishment of BVI SPV

In order for PREPL to participate in, and have oversight of, the process of the establishment and the operations of the BVI SPV and the Hong Kong SPV, PREPL established the BVI SPV which in turn established the Hong Kong SPV. PREPL holds the shares of the BVI SPV on trust for Ms Tong Yuqian. Ms Tong Yuqian will enter into a loan agreement with PCRPL for RMB10.0 million (in its Singapore Dollar equivalent) pursuant to which Ms Tong Yuqian will be the borrower. One of the key terms of the loan agreement is that Ms Tong Yuqian, in order to furnish a guarantee for loan, will pledge all her shares in the BVI SPV to PCRPL and sign an undated agreement (the “BVI SPV Share Transfer Agreement”) to transfer all the BVI SPV shares to PCRPL. At the same time, the director appointed to both the boards of the BVI SPV and the Hong Kong SPV by the Summit Group will (i) sign an undated resignation letter and (ii) agree to pass board resolutions for the appointment of a PCRT nominee to both the boards of the BVI SPV and the Hong Kong SPV, as well as any documentation required to facilitate the resignation of such director and the appointment of the director nominated by PCRT, and the pledge of the BVI SPV shares. These steps are necessary to give effect to the pledge of the BVI SPV shares as the transfer of both the shares and the control of the board of directors of the BVI SPV to PCRT are necessary for PCRT to assume control of the BVI SPV.

After the loan agreement between Ms Tong Yuqian and PCRT is signed, the BVI SPV will enter into a similar loan agreement with Ms Tong Yuqian to borrow RMB10.0 million (in its Singapore Dollar equivalent) from Ms Tong Yuqian.

Step 2 — Capital Injection by Hong Kong SPV

Pursuant to the terms of the Framework Agreement, the Hong Kong SPV will subscribe for new equity interests in Chengdu Ruifeng through the injection of capital into Chengdu Ruifeng (the “Chengdu Ruifeng First Capital Increase”).

The Hong Kong SPV and Shanghai Summit will enter into a capital increase contract in respect of Chengdu Ruifeng, pursuant to which the Hong Kong SPV will inject RMB10.0 million into Chengdu Ruifeng in order to acquire 50.0% of the equity interest in Chengdu Ruifeng. Thereafter, Chengdu Ruifeng will become a sino-foreign equity joint venture enterprise, with an increased registered capital of RMB20.0 million. The

22 Framework Agreement provides for this step to be completed within three months from the date of the Original Framework Agreement.

Once the relevant conditions for the Chengdu Ruifeng First Capital Increase are fulfilled (please refer to paragraph 2.3.2 below for certain key conditions), PCRPL shall, on behalf of Ms Tong Yuqian, pay RMB10.0 million (in its Singapore Dollar equivalent) to the BVI SPV pursuant to the loan agreement between PCRPL and Ms Tong Yuqian and the loan agreement between Ms Tong Yuqian and the BVI SPV. The BVI SPV will then extend a shareholder’s loan and/or subscribe for redeemable preference shares and ordinary shares in the Hong Kong SPV, which will then apply this RMB 10.0 million towards the capital account of Chengdu Ruifeng as its capital injection into Chengdu Ruifeng. For the avoidance of doubt, the RMB10.0 million is meant to be paid via the BVI SPV and Hong Kong SPV into Chengdu Ruifeng as a capital increase. As the existing capital in Chengdu Ruifeng will be RMB10.0 million prior to the capital increase, injecting the RMB10.0 million from the Hong Kong SPV will give the Hong Kong SPV a 50.0% shareholding of Chengdu Ruifeng. This amount of RMB10.0 million has no relation to the value of the property.

Step 3 — Acquisition by PCRPL of BVI SPV

PCRPL will acquire the entire issued share capital of the BVI SPV. Once the “four permits”1 are obtained, PCRPL shall make the first payment of RMB341,443,500 which is equal to 15.0% of the Purchase Consideration to the Summit Group. The trust in respect of Ms Tong Yuqian’s shares in the BVI SPV shall be terminated and the legal title to the BVI SPV Shares will be transferred to Ms Tong Yuqian. At the same time, PCRPL will enter into the BVI SPV Share Transfer Agreement with Ms Tong Yuqian. The BVI SPV Share Transfer Agreement will take effect for the transfer of all of the BVI SPV shares from Ms Tong Yuqian to PCRPL at a consideration of RMB1.0. Once the transfer procedures have been completed, the loan between PCRPL and Ms Tong Yuqian for RMB10.0 million (in its Singapore Dollar equivalent) shall be discharged. The pledge of the BVI SPV Shares by Ms Tong Yuqian shall also be discharged. Once PCRPL acquires the entire issued share capital of the BVI SPV, it will have acquired indirectly the entire issued share capital of the Hong Kong SPV as well as 50.0% of the equity interest in Chengdu Ruifeng.

Once the relevant conditions for a second capital injection by the Hong Kong SPV into Chengdu Ruifeng (the “Chengdu Ruifeng Second Capital Increase”) are fulfilled (please refer to paragraph 2.3.2 below for certain of the key conditions), the Hong Kong SPV will inject additional capital into Chengdu Ruifeng, with RMB1.0 million paid as registered newly injected capital into Chengdu Ruifeng and the remaining amount (expected to be RMB330,443,499) paid into Chengdu Ruifeng’s capital reserve account.

To ensure that the Hong Kong SPV and Shanghai Summit hold the same amount of equity interests in Chengdu Ruifeng, Shanghai Summit will inject additional capital of RMB1.0 million into Chengdu Ruifeng.

23 PCRPL will acquire the BVI SPV after the four permits have been obtained by Chengdu Ruifeng and Unitholders have approved the Acquisition.

The diagram below sets out the ownership structure of the Underlying Land following completion of the restructuring.

PCRT

BVI SPV

Shanghai HK SPV Summit 50.0% 50.0%

Chengdu Ruifeng

Underlying Land

Step4—Topping-out

Upon the “topping-out”1 of the Chengdu Longemont Mall, PCRT must make the second payment of 40.0% of the Purchase Consideration equivalent to the sum of RMB910.5 million (thus increasing the purchase consideration paid to 55.0% of the Purchase Consideration) which shall take into account the RMB10.0 million paid by PCRPL on behalf of Ms Tong Yuqian under step 2 above and the aggregate of RMB331,443,500 paid under step 3 above, such payment to be made as set out below.

If Shanghai Summit Pte. Ltd. has not provided RMB226,525,000 under the New Earn-out Deed by 31 December 2012, PCRT has the right to set-off RMB226,525,000 plus interest (such interest to be pegged at the minimum rate that PCRT has to pay in order to borrow to obtain the amount under the New Earn-out Deed, such interest to accrue from 1 January 2013) from the amount of Purchase Consideration owing to the Summit Group at this stage.

This payment will take the form of a price adjustment for payment of the purchase consideration for the BVI SPV Shares in Singapore Dollars, such that a sum of RMB186,752,125 will be paid to Ms Tong Yuqian. PCRPL will, through the BVI SPV and the Hong Kong SPV, inject additional capital into Chengdu Ruifeng comprising RMB1.0 million of registered capital and the remaining amount (expected to be RMB183,249,000) paid into Chengdu Ruifeng’s capital reserve account, which will be effected by recording the amount in the capital reserve account. These amounts were determined in order to maintain PCRT’s ownership of Chengdu Ruifeng at at least 50.0% and ensure that Chengdu Ruifeng’s eventual registered capital and capital reserve will be no less than RMB500,000,000. The adjustment to the price of the BVI SPV shares is a mechanism to pay the Summit Group for the asset, as opposed to injection of additional capital into Chengdu Ruifeng.

1 Refers to the overall completion of the building’s structure.

24 To ensure that the Hong Kong SPV and Shanghai Summit hold the same amount of equity interests in Chengdu Ruifeng, Shanghai Summit will inject additional capital of RMB1.0 million into Chengdu Ruifeng.

Step 5 —Third Payment of 40.0% of the Purchase Consideration

Upon the conditions for the payment of the third payment (being when at least 70.0% of the tenant areas in the mall are actively trading) which is equal to 40.0% of the Purchase Consideration being satisfied, PCRT will make such payment (estimated to be RMB682,887,000) in the form of a price adjustment for payment for the BVI SPV shares in Singapore Dollars, such that the amount will be paid to Ms Tong Yuqian.

Step 6 — Fourth and Final Payment of 5.0% of the Purchase Consideration

Upon the conditions for the payment of the remaining 5.0% of the Purchase Consideration (being Chengdu Ruifeng obtaining the relevant building title deed as well as other relevant PRC governmental approvals in respect of the Chengdu Longemont Mall) being satisfied, PCRT will make such payment (estimated to be RMB85,360,875) in the form of a price adjustment for payment for the BVI SPV shares in Singapore Dollars, such that the amount will be paid to Ms Tong Yuqian.

(See Appendix H for further details on the key steps to be undertaken in the Acquisition of Chengdu Longemont Shopping Mall Development.)

2.3.2 Certain Other Key Terms of the Framework Agreement

Chengdu Ruifeng First Capital Increase

The Chengdu Ruifeng First Capital Increase is subject to the satisfaction of a number of conditions including:

(i) the approval by Unitholders obtained at an extraordinary general meeting for the Acquisition;

(ii) completion of satisfactory due diligence by PCRT on Chengdu Ruifeng and the Chengdu Longemont Mall; and

(iii) Chengdu Summit having paid up the land tender price and all relevant taxes in accordance with the relevant tender documents.

Chengdu Ruifeng Second Capital Increase

The Chengdu Ruifeng Second Capital Increase is subject to the satisfaction of a number of conditions including:

(i) the approval by Unitholders obtained at an extraordinary general meeting for the Acquisition;

(ii) completion of satisfactory due diligence by PCRT on the BVI SPV and the Hong Kong SPV;

(iii) the completion of the transfer of the BVI SPV shares from Ms Tong Yuqian to PCRPL and the concurrent discharge of the pledge of the BVI SPV shares;

(iv) Chengdu Ruifeng having obtained the qualification for real estate development (房地產開發企業資質證書); and

25 (v) free licensing of “龍之夢購物中心” and the “Longemont” trademarks, and licensing agreements having been entered into by Chengdu Ruifeng with the owners of the trademarks, Shanghai Longemont Shopping Centre Co., Ltd. and Shanghai Summit Hotel Management Co., Ltd. and the obtaining of official receipts from the trademark bureau evidencing the filing of the licensing agreements.

Refundable Deposit

Under Schedule 2 of the Framework Agreement, PCRPL has the option to undertake payments through Shenyang Summit1, on behalf of PCRT and the Summit Group, to pay to Shanghai Summit a refundable deposit (the “Refundable Deposit”) of up to RMB227.6 million, of which PCRT’s 50.0% interest amounts to RMB113.8 million, which is equivalent to 5.0% of the Purchase Consideration. Pursuant to this, Shenyang Summit had on 17 November 2011, on behalf of PCRT and the Summit Group, paid to Shanghai Summit a Refundable Deposit of RMB194.02 million, of which PCRT’s 50.0% interest amounts to RMB97.0 million, which is equivalent to approximately 4.3% of the Purchase Consideration in order to give effect to the Chengdu Longemont Mall Interest Option that 5.0% of the purchase consideration be paid to Shanghai Summit upon entry into of a transfer agreement. The remaining 0.7% of the Purchase Consideration (equivalent to RMB33.6 million, of which PCRT’s 50.0% interest amounts to RMB15.9 million) will be paid by Shenyang Summit in due course and is expected to be paid during the first quarter of 2012. However, the non-payment of this balance amount will not affect the Chengdu Longemont Mall Interest Option. Shenyang Summit had paid the Refundable Deposit by drawing down on the ABC Loan (as defined herein). The Refundable Deposit together with interest (at the rate payable by Shenyang Summit under the ABC Loan) will be refunded to Shenyang Summit within 20 business days of the occurrence of any of the following events which include (i) if the Unitholders do not approve the Acquisition at an extraordinary general meeting, (ii) if step 2 and step 3 of the restructuring exercise as set out above do not complete within three months of the payment of the Refundable Deposit (save that if the agreement in respect of the Chengdu Ruifeng First Capital Increase has been submitted to the relevant authority for its approval but that such approval has not been obtained, then an extension of another three months for the completion of step 3 may be obtained with the written consent of PCRT), (iii) if Chengdu Ruifeng has obtained the capital injection amounts from the Hong Kong SPV under step 4 of the re-structuring exercise and (iv) upon the termination of the Framework Agreement. In the case of (iii), the refund of the Refundable Deposit takes place because the Acquisition is proceeding and the relevant amount of Purchase Consideration has been received to “replace” the Refundable Deposit.

On 3 November 2011, Mr Tong Jinquan and Shanghai Summit (Group) each issued an undertaking:

(i) that he or it, as the case may be, is jointly with the Summit Entities (as defined herein) responsible for the representations, warranties and confirmations provided by Mr Tong Jinquan, Shanghai Summit, Chengdu Summit, Chengdu Ruifeng (prior to the completion of step 6 of the restructuring) and Shanghai Summit Pte. Ltd. (together, the “Summit Entities”); and

1 Shenyang Summit Real Estate Development Co., Ltd., which is 50.0% owned by PCRT and 50.0% owned by the Summit Group. 2 As disclosed in the SGXNET announcement of the Trustee-Manager dated 25 November 2011.

26 (ii) that he or it, as the case may be, shall fully indemnify PCRPL, PCRT or Shenyang Summit, as the case may be, if (a) the Summit Entities are unable to repay the amount paid by PCRT or interest thereon in accordance with the Framework Agreement, (b) the Summit Entities are unable to repay the Refundable Deposit paid by Shenyang Summit or interest thereon in accordance with the Framework Agreement or (c) any of the Summit Entities breaches any of its representations, warranties or confirmations in the Framework Agreement.

2.4 Flexibility to Increase PCRT’s Interest in Chengdu Longemont Mall

Principal terms of the Flexibility to Increase PCRT’s Interest in Chengdu Longemont Mall

Under the terms of the Framework Agreement, based on a completed GFA of 455,260 sqm, PCRPL will acquire a 50.0% interest in Chengdu Longemont Mall at an aggregate Purchase Consideration of approximately RMB2.28 billion (S$464.0 million), with the Purchase Consideration arrived at based on the agreed property purchase price of RMB10,000 per sqm on a “completed” basis as set out in the Chengdu Longemont Mall Interest Option. The RMB10,000 per sqm amount was arrived at based on a willing-buyer and willing-seller basis after taking into account the market valuation of the Chengdu Longemont Mall. In light of the intention for PCRT to have the flexibility to acquire a higher percentage interest in the Chengdu Longemont Mall, the parties to the Original Framework Agreement have entered into the Option Agreement, pursuant to which PCRPL has been granted an option to increase its equity interest in Chengdu Ruifeng. The Option Agreement states that in the event that the GFA1 of the property is determined to be less than 95.0%2 of 455,260 sqm (which shall be no later than the time that Chengdu Ruifeng obtains the “four permits”), based on the Transactional GFA approved by the authority in the construction project planning permit, PCRPL shall have the flexibility to acquire a higher percentage interest (up to 80.0%) in Chengdu Longemont Mall at RMB10,000 per sqm, subject always to PCRPL paying a maximum Purchase Consideration of RMB2.28 billion (S$464.0 million) for its aggregate interest in Chengdu Longemont Mall in the event that it acquires more than 50.0% interest in Chengdu Longemont Mall. PCRPL may increase its stake in Chengdu Longemont Mall at its option and at any time within one year from the later of (i) the date that PCRPL completes its acquisition of the BVI SPV (as defined herein) and (ii) the date that Chengdu Ruifeng obtains the “four permits”3. For the avoidance of doubt, if the Transactional GFA is less than 455,260 sqm but more than 95.0% of 455,260 sqm, PCRPL will not have the option of increasing its stake in Chengdu Longemont Mall and in such an instance, the Purchase Consideration payable will be adjusted based on the Transactional GFA. (See paragraph 2.2 of the Letter to Unitholders for a chart illustrating the amount payable by PCRT in the various scenarios.)

In addition, in connection with the Acquisition, the Trustee-Manager has also negotiated for up to RMB226,525,000 to be available for distribution under the New Earn-out Deed, which amounts to approximately 10.0% of the Purchase Consideration based on a completed GFA of 455,260 sqm.

27 Rationale for the Flexibility to Increase PCRT’s Interest in Chengdu Longemont Mall

The Trustee-Manager believes that the flexibility for PCRT to increase its interest in Chengdu Longemont Mall to more than 50.0% (and up to 80.0%) is in the interests of Unitholders as it provides an opportunity for PCRT to take majority ownership in a quality asset, thereby increasing the number of potential assets in PCRT’s portfolio with majority ownership. In addition, as the Purchase Consideration for its aggregate interest in Chengdu Longemont Mall shall in all cases be limited to a maximum of RMB2.28 billion (S$464.0 million) (save for the instance where the Final GFA as stated in the Building Title Certificate is more than the Transactional GFA approved by the authority in the construction project planning permit (see paragraph 2.2 of the Letter to Unitholders for details of the adjustment)), the maximum cash outlay of PCRT for this investment is capped.

In addition, PCRPL has the flexibility to increase its stake at any time after it has been determined that the Transactional GFA of the property will be less than 95.0% of 455,260 sqm (which shall be no later than the time that Chengdu Ruifeng obtains the four permits1), thereby allowing the Trustee-Manager the time and opportunity to evaluate market conditions and consider various factors, which include the potential increase in the market value per sqm of GFA with a reduction of GFA and reduced number of levels of the property, and the terms of the acquisition to determine if there is further upside potential in relation to the property at the relevant time.

2.5 New Earn-out Deed

Principal Terms of the Earn-out Arrangements

The Trustee-Manager had negotiated the New Earn-out with the Summit Group to further strengthen the Trustee-Manager’s capacity to deliver the total distribution amount in respect of Forecast Year 2011 and Projection Year 2012 as disclosed in the Prospectus and to also strengthen the cash flows for distribution to Unitholders in the first half of 2013. The New Earn-out is expected to provide Unitholders greater assurance that the forecast total distribution amount for Forecast Year 2011 and Projection Year 2012 as disclosed in the Prospectus can be achieved and is conditional upon obtaining Unitholders’ approval for the proposed Acquisition.

Shanghai Summit Pte. Ltd. and PCRPL had on 19 January 2012 entered into the New Earn-out Deed to supplement the earn-out amounts under the Amended and Restated Earn-out Deed. The New Earn-out Deed (which is in addition to the Amended and Restated Earn-out Deed) provides for, inter alia, Shanghai Summit Pte. Ltd. to provide PCRT with a sum of up to RMB226,525,000, to provide greater assurance that PCRT’s total distribution amount from 9 June 2011 (being the date of the listing of the Units on the SGX-ST) to the first half of 2013 do not fall below certain thresholds stipulated below. The terms of the New Earn-out Deed (including the earn-out amount) were negotiated on an arm’s length basis. In the event that any of PCRT’s total distribution amount in the specified period falls below the stipulated threshold after drawing down under the Amended and Restated Earn-out Deed, PCRT will have the right to draw down under the New Earn-out Deed.

The maximum amount of RMB226,525,000 payable under the New Earn-out Deed is based on the GFA of 455,260 sqm and the Purchase Consideration of RMB2.28 billion and may vary if the Transactional GFA is less than 95.0% of 455,260 sqm as set out below.

28 Maximum amount which PCRPL may draw down under the New Scenario Earn-out Deed

PCRPL acquires 80.0% interest in Chengdu RMB226,525,000 Longemont Mall and regardless of whether the Purchase Consideration is less than RMB2.28 billion

PCRPL acquires equal to or more than 50.0% interest RMB226,525,000 but less than 80.0% interest in Chengdu Longemont Mall, but the Purchase Consideration is not less than RMB2.28 billion or, even if less than RMB2.28 billion, is not due to the Transactional GFA being less than 455,260 sqm

PCRPL acquires equal to or more than 50.0% interest RMB226,525,000 X Purchase but less than 80.0% interest in Chengdu Longemont Consideration as a result of the Mall, and the Purchase Consideration is less than reduced Transactional GFA ÷ RMB2.28 billion due to the Transactional GFA being RMB2.28 billion less than 455,260 sqm

Minimum Distribution Amount to be achieved Relevant Period by PCRT 9 June 2011 to 31 December 2011 RMB139.0 million 1 January 2012 to 31 December 2012 RMB228.0 million 1 January 2013 to 30 June 2013 RMB116.0 million

With the total amounts under the New Earn-out Deed and the Amended and Restated Earn-out Deed (amounting to RMB471.5 million), the Trustee-Manager hopes to maintain the forecast total distribution amount for the Forecast Year 2011 and Projection Year 2012 at as disclosed in the Prospectus. For the avoidance of doubt, the New Earn-out Deed is not related to any specific property but is tied to distributable income.

Rationale for the terms of the New Earn-out

The earn-out amount of S$46.5 million2 (RMB245.0 million) under the Amended and Restated Earn-out Deed is for the period from 9 June 2011 to 31 December 2013. The Trustee-Manager has negotiated the New Earn-out amount of up to RMB226.5 million for the period from 9 June 2011 to 30 June 2013 when negotiating the terms of the Acquisition. The Trustee-Manager believes that this period under the New Earn-out is sufficient as the operations of Shenyang Red Star Furniture Mall and Shenyang Longemont Shopping Mall would have stabilised by the first

1 Refers to the overall completion of the building’s structure which is expected to be in the third quarter of 2013. 2 Based on the exchange rate as set out in the Prospectus.

29 half of 2013. As the Shenyang Longemont Offices are expected to commence business only in the fourth quarter of 2012, the earn-out amounts under the Amended and Restated Earn-out Deed will continue to strengthen cash flows for distribution until 31 December 2013 (thereby providing for one year for the operations of the Shenyang Longemont Offices to stabilise).

2.6 Property Management Agreement

The property management services in relation to the Chengdu Longemont Mall will be carried out, in accordance with the terms of the property management agreement (the “Property Management Agreement”), by a joint venture management company to be established (the “Property Manager”) which shall be a joint venture between PREPL or its wholly-owned subsidiary and a member of the Summit Group. PREPL’s stake in the Property Manager will be at least 51.0% and, subject to the level of PCRT’s Chengdu Longemont Mall Interest, PREPL’s stake may increase to 80.0%. Accordingly, the Summit Group’s stake in the Property Manager will be between 20.0% and 49.0%.

By approving the Acquisition (Resolution 1), Unitholders will be deemed to have also approved the provision of property management services by the Property Manager in relation to Chengdu Longemont Mall pursuant to the terms of the Property Management Agreement.

The proposed structure of the fees (inclusive of leasing and/or marketing commissions) payable to the Property Manager (the “Property Management Fee”) is as follows:

• 2.0% of the Gross Revenue of Chengdu Longemont Mall;

• 2.0% of the Net Property Income of Chengdu Longemont Mall; and

• 0.5% of the Net Property Income of Chengdu Longemont Mall in lieu of leasing commissions otherwise payable to the Property Manager and/or third party agents.

Under the Property Management Agreement, the Property Manager will be fully reimbursed for (i) the employment costs and remuneration relating to centre management and other personnel engaged solely for the provision of services for the Property, and (ii) the allocated employment costs and remuneration relating to the centralised team of personnel engaged exclusively to provide group services for the Property, as approved in each annual budget by Chengdu Ruifeng.

The terms of the proposed Property Management Agreement are based on and similar to the terms of the existing property management agreements in respect of Shenyang Longemont Shopping Mall, Shenyang Longemont Offices, Foshan Yicui Shijia Shopping Mall and Chengdu Qingyang Guanghua Shopping Mall. Please refer to the Independent Financial Adviser’s Letter (as defined herein) set out in Appendix B of this Circular for the Independent Financial Adviser’s evaluation that as the terms of the Property Management Agreement are generally in line with the disclosed terms of property management arrangements of real estate investment trusts and property business trusts listed on the SGX-ST, the Property Management Agreement does not appear to be unreasonable or prejudicial to Unitholders’ interests.

As at the Latest Practicable Date, as Mr Pua Seck Guan wholly owns PREPL which in turn owns 78.0% of the total issued share capital of the Trustee-Manager, Mr Pua Seck Guan is deemed to be interested in 78.0% of the total issued share capital of the Trustee-Manager and is therefore a “controlling shareholder” of the Trustee-Manager.

30 As the Property Manager will be majority-owned1 by PREPL or a wholly-owned subsidiary of PREPL (being a “controlling shareholder” of the Trustee-Manager), for the purposes of Chapter 9 of the Listing Manual, the Property Manager (being a subsidiary of a “controlling shareholder” of the Trustee-Manager) is (for the purposes of the Listing Manual) an “interested person” of PCRT.

In addition, as the Property Manager will be owned in part by a member of the Summit Group who will be an associate of Mr Tong Jinquan (voluntarily regarded as an “interested person” under the Listing Manual), for the purposes of Chapter 9 of the Listing Manual, the Property Manager (being an associate of an “interested person” under the Listing Manual) is (for the purposes of the Listing Manual) an “interested person” of PCRT.

2.7 Total Acquisition Cost and Payment Schedule

The Purchase Consideration of approximately RMB2.28 billion (S$464.0 million) under the Framework Agreement was arrived at based on the agreed property purchase price of RMB10,000 per sqm on a “completed” basis as set out in the Chengdu Longemont Mall Interest Option. The RMB10,000 per sqm amount was arrived at based on a willing-buyer and willing-seller basis after taking into account the market valuation of the Chengdu Longemont Mall. If the GFA2 of the property is determined to be less than 95.0%3 of 455,260 sqm (which shall be no later than the time that Chengdu Ruifeng obtains the four permits4), based on the Transactional GFA approved by the authority in the construction project planning permit, PCRPL shall have the flexibility to acquire a higher percentage interest in Chengdu Longemont Mall at RMB10,000 per sqm, subject always to PCRPL paying a maximum Purchase Consideration of RMB2.28 billion (S$464.0 million) for its aggregate interest in Chengdu Longemont Mall in the event that it acquires more than 50.0% interest in Chengdu Longemont Mall. PCRPL may increase its stake in Chengdu Longemont Mall at its option and at any time within one year from the later of (i) the date that PCRPL completes its acquisition of the BVI SPV (as defined herein) and (ii) the date that Chengdu Ruifeng obtains the four permits4. For the avoidance of doubt, if the Transactional GFA is less than 455,260 sqm but more than 95.0% of 455,260 sqm, PCRPL will not have the option of increasing its stake in Chengdu Longemont Mall and in such an instance, the Purchase Consideration payable will be adjusted based on the Transactional GFA. (See paragraph 2.2 of the Letter to Unitholders for a chart illustrating the amount payable by PCRT in the various scenarios.)

To demonstrate that the agreed property purchase price of RMB10,000 per sqm of GFA on a “completed basis” which forms the basis of the Purchase Consideration is at a favourable value, the Trustee-Manager has commissioned two independent valuers5, CBRE and Colliers to value the Chengdu Longemont Mall, the details of which are as follows:

1 PREPL’s stake in the Property Manager will be between 51.0% and 80.0%, subject to the level of PCRT’s Chengdu Longemont Mall Interest. 2 As approved by the relevant governmental authorities. 3 The 95.0% threshold was arrived at based on a willing-buyer and willing-seller basis as a meaningful deviation from the estimated GFA of the building. 4 Refers to the four approvals from the PRC governmental authorities, being (i) the land use right certificate (土地使用證), (ii) the construction land planning permit (建設用地規劃許可證), (iii) the construction project planning permit (建設工程規劃許可證) and (iv) the construction permit (建築工程施工許可證), which are expected to be received in the first quarter of 2012. 5 Although the Trustee-Manager is not expressly required to commission two valuations under the Listing Manual, it has voluntarily commissioned an additional independent valuer, Colliers, to provide another valuation of the Chengdu Longemont Mall in order to provide Unitholders with an additional valuation for reference. Accordingly, the valuation of CBRE is as at 31 October 2011 before the entry into of the Original Framework Agreement and Colliers was commissioned after the entry into of the Original Framework Agreement and its valuation is as at 30 November 2011.

31 On GFA basis:

PCRT’s Independent Valuation 20111 Estimated Future Value 20142 Purchase Price Value Value Valuers per sqm GFA Premium over Premium over per sqm per sqm (Completed Purchase Price Purchase Price Basis) GFA GFA

CBRE (as at RMB12,500 25.0% RMB14,930 49.3% 31 October 2011) RMB10,000 Colliers (as at RMB12,700 27.0% RMB15,200 52.0% 30 November 2011)

On GRA3 basis:

PCRT’s Independent Valuation 20111 Estimated Future Value 20142 Purchase Price Value Value Valuers per sqm GRA Premium over Premium over per sqm per sqm (Completed Purchase Price Purchase Price Basis) GRA GRA

CBRE (as at RMB15,600 25.0% RMB18,630 49.3% 31 October 2011) RMB12,485 Colliers (as at RMB15,870 27.0% RMB18,920 52.0% 30 November 2011)

32 The Total Acquisition Cost is currently estimated to be approximately S$477.3 million, comprising:

(a) the Purchase Consideration of RMB2.28 billion (S$464.0 million);

(b) the Acquisition Fee of approximately S$6.3 million (being 1.35% of the Purchase Consideration) payable to the Trustee-Manager pursuant to the Trust Deed will be paid in Units1. The Acquisition Fee Units shall be payable to the Trustee-Manager upon the satisfaction of both the following conditions (i) the completion of the acquisition by PCRPL of the BVI SPV and (ii) the obtaining of the four permits2 by Chengdu Ruifeng and the amount of the Acquisition Fee will be based on the Purchase Consideration computed based on the GFA as set out in the Construction Planning Certificate and assuming that PCRT acquires a 50.0% interest in Chengdu Longemont Mall Development. Should PCRT exercise the option to increase its stake in Chengdu Longemont Mall Development, an additional amount of Acquisition Fee will be payable upon such exercise. The Acquisition Fee Units are expected to be issued in the first half of 2012 after the satisfaction of the abovementioned two conditions. Although all Acquisition Fee Units once issued will be entitled to the distributions payable after their date of issuance, the Acquisition Fee Units in this case will not be entitled to any distributions in respect of the distribution period from 1 January 2012 to 31 December 2012; and

(c) the estimated professional and other fees and expenses incurred or to be incurred by PCRT in connection with the Acquisition of approximately S$7.0 million (inclusive of the professionals’ fees and expenses incurred or to be incurred for the amendments to the Credit Facilities Agreement to fund part of the first 15.0% of the Purchase Consideration of approximately S$2.1 million, the upfront fees under the Credit Facilities Agreement of approximately S$4.3 million and miscellaneous expenses incurred in connection with the Acquisition of approximately S$0.6 million) which will be borne by PCRT.

33 Pursuant to the terms of the Framework Agreement, the Purchase Consideration shall (assuming a 50.0% interest in Chengdu Longement Mall at an assumed Transactional GFA of 455,260 sqm) be paid in stages on a progressive basis, being:

First Payment : 15.0%, being RMB341.4 million, payable upon obtaining the “four permits”1 in connection with the Underlying Land and construction of the Chengdu Longemont Mall and satisfaction of certain conditions precedent2 (targeted to be payable in the first quarter of 2012);

Second Payment : an additional 40.0%, being RMB910.5 million, payable upon the “topping-out”3 of the Chengdu Longemont Mall (targeted to be payable in the third quarter of 2013);

Third Payment : an additional 40.0%, being RMB910.5 million, payable upon the commencement of operations of no less than 70.0% of the commercial area of the Chengdu Longemont Mall (targeted to be payable in the third quarter of 2014); and

Fourth & Final Payment : the final 5.0%, being RMB113.8 million, being payable upon the obtaining of the relevant building title deed as well as other relevant governmental approvals4 in respect of the Chengdu Longemont Mall (targeted to be payable in the fourth quarter of 2014).

1 Refers to the four approvals from the PRC governmental authorities, being (i) the land use right certificate (土地使用證), (ii) the construction land planning permit (建設用地規劃許可證), (iii) the construction project planning permit (建設工程規劃許可證) and (iv) the construction permit (建築工程施工許可證), which are expected to be received in the first quarter of 2012. 2 The conditions precedent include: (i) approval of the Unitholders for the Acquisition being obtained, (ii) the Credit Facilities Agreement Lenders agreeing to amendments to the Credit Facilities Agreement for the purposes of the Acquisition, (iii) the BVI SPV holding the entire issued share capital of the Hong Kong SPV so that the BVI SPV indirectly holds 50.0% of Chengdu Ruifeng, and PCRT being satisfied with the due diligence of the BVI SPV and the Hong Kong SPV, (iv) the BVI SPV Share Transfer Agreement has been signed and takes effect, and Ms Tong Yuqian and PCRPL having completed the transfer of the shares of the BVI SPV and (v) Chengdu Ruifeng having acquired the (Interim) Qualification Certificate for Real Estate Development Enterprise. 3 Refers to the overall completion of the building’s structure. 4 Other than the building title deed which is the main governmental approval, the other governmental approvals, if required, are general administrative in nature.

34 monitoring the construction progress. The Trustee-Manager will thus know if the construction of the mall will be delayed and whether the Summit Group is able and willing to carry on with its development. The Trustee-Manager will be in a position to decide if PCRT is then required to take over the mall’s construction. There are no penalties for delay in construction. With the payment schedule being back-loaded and beneficial to PCRT, it is in the Summit Group’s interests for construction to progress as quickly as possible, so as to receive payment from PCRT. Furthermore, being a part-owner, the Summit Group’s interests are aligned with PCRT for the asset to be completed and begin trading as soon as possible. As the Trustee-Manager will be actively involved in the development of the mall, any serious delays in construction will be quickly detected and PCRT will be in a position to decide whether or not to take over and expedite construction. The Trustee-Manager will endeavour to ensure that the property will commence operations as expected.

3. RATIONALE FOR THE ACQUISITION

The Trustee-Manager believes that the Acquisition will bring the following key benefits to Unitholders:

(1) Accretive Acquisition

DPU Accretive: The Trustee-Manager will endeavour to ensure that the Acquisition is DPU-accretive, meaning that the yield on cost achieved for the Acquisition is higher than the yield on cost of PCRT’s Existing Portfolio.1

NAV Accretive: The Chengdu Longemont Mall’s 2011 and 2014 independent valuations2 by CBRE are RMB12,500 per sqm of GFA as at 31 October 2011 and RMB14,930 per sqm GFA in 2014, which is a premium of 25.0% and 49.3%, respectively over the agreed property purchase price of RMB10,000 per sqm of GFA which forms the basis of the Purchase Consideration of approximately RMB2.28 billion (S$464.0 million). The Acquisition is expected to increase PCRT’s adjusted pro forma NAV per Unit of S$0.993 to

35 S$1.191 based on CBRE’s estimated future values of all the properties of PCRT in 2014, when the Chengdu Longemont Mall commences operations. Assuming the Acquisition was completed on 30 September 2011, the Acquisition is expected to increase PCRT’s adjusted pro forma NAV per Unit of S$0.672 to S$0.763 as at 30 September 2011.

(2) Strategic Location with Direct Connectivity to Chengdu East HSR Station

(See Appendix D for the Chengdu Retail Market Review by the Independent Property Consultant for further details.)

(3) Favourable Payment Schedule Provides Funding Flexibility and Reduces Costs

1 The adjusted pro forma NAV per unit of S$1.19 is computed by applying the estimated future value of the Chengdu Longemont Mall in 2014 from CBRE of RMB14,930 per sqm of GFA to the adjusted pro forma NAV per unit of S$0.99 derived in the Prospectus and based on all the assumptions and adjustments set out therein, after incorporating the following key adjustments and assumptions, and excluding deferred tax: (i) the GFA of the Chengdu Longemont Mall for the purposes of computing the Purchase Consideration under the Framework Agreement is 455,260 sqm, (ii) the RMB amount in respect of the estimated future value and Purchase Consideration of the Chengdu Longemont Mall is translated into Singapore dollars based on the foreign exchange rate of RMB4.9061 = S$1.00, (iii) the number of Units are assumed to remain as that used in deriving the adjusted pro forma NAV per unit of S$0.99 in the Prospectus, and (iv) the NAV per unit increase is computed based on the increase in valuation of the estimated future value of the Chengdu Longemont Mall which is an extrapolation of the “as if complete and fully leased” valuation by CBRE as at 31 October 2011 compared to the Purchase Consideration. 2 The adjusted pro forma NAV per Unit of S$0.67 excludes deferred tax and is based on the valuation by CBRE of the Properties (as defined in the Prospectus) as at 31 December 2010 and is based on all the assumptions and adjustments set out in the section “Unaudited Pro Forma Consolidated Balance Sheet as at the Listing Date – Pro Forma NAV per Unit for illustrative purposes” of the Prospectus. Deferred tax which is payable on the profit from the disposal of property, is excluded as PCRT intends to hold its assets on a long-term basis. The amount of such deferred tax depends on the method of disposal of the property. 3 The adjusted pro forma NAV per unit of S$0.76 is computed by applying the valuation by CBRE of the Chengdu Longemont Mall as at 31 October 2011 of RMB12,500 per sqm of GFA to the adjusted pro forma NAV per unit of S$0.67 derived in the Prospectus and based on all the assumptions and adjustments set out therein, after incorporating the following key adjustments and assumptions, and excluding deferred tax: (i) the GFA of the Chengdu Longemont Mall for the purposes of computing the Purchase Consideration under the Framework Agreement is 455,260 sqm, (ii) the RMB amount in respect of the valuation and Purchase Consideration of the Chengdu Longemont Mall is translated into Singapore dollars based on the foreign exchange rate of RMB4.9061 = S$1.00, and (iii) the number of Units are assumed to remain as that used in deriving the adjusted pro forma NAV per unit of S$0.67 in the Prospectus.

36 The largely back-loaded payment structure reduces the amount which PCRT needs to finance upfront and consequently, reduces interest and other related expenses for the Acquisition in such period.

(4) Increases PCRT’s Asset Size to S$1.8 billion and Generates Additional 2014 Income Stream The Acquisition is expected to increase PCRT’s asset size from S$1.11 billion to S$1.8 billion2 on the completion of the Acquisition. PCRT is also expected to benefit from the additional income stream when the Chengdu Longemont Mall commences operations in the third quarter of 2014.

(5) Strengthens Retail Presence in Chengdu and Economies of Scale The Acquisition would not only strengthen PCRT’s retail presence in Chengdu but also cater to different tenancy and shopper demands in the eastern and western parts of the city. PCRT has the right to acquire the Chengdu Qingyang Guanghua Shopping Mall located in Western Chengdu. The completion of the Chengdu Qingyang Guanghua Shopping Mall is targeted for the fourth quarter of 2013, with commencement of operations targeted in the second quarter of 20143. The Chengdu Longemont Mall located within the Third Ring Road of Eastern Chengdu is expected to provide PCRT with economies of scale in overall resource planning and operations in Chengdu. With two malls within the PCRT portfolio in the same city, administrative resources such as human resources, centre management, leasing and operations may be shared between the two property managers of the respective malls. Having a greater retail area may also aid both property managers in negotiating contracts with third-party service providers such as security and cleaning companies.

4. DETAILS OF THE ACQUISITION

4.1 Pro Forma Financial Effects of the Acquisition The pro forma financial effects of the Acquisition on the NAV per Unit and the capitalisation of PCRT presented below are strictly for illustrative purposes and were prepared based on the unaudited financial statements of PCRT for the period 9 June 2011 to 30 September 2011 (the “PCRT Unaudited Financial Statements”), taking into account the Total Acquisition Cost, and: (i) assuming that no Units will be issued as consideration for the Acquisition; (ii) assuming that the Acquisition is wholly funded by debt financing and borrowings of S$355.0 million4 is taken to finance the Acquisition;

1 Based on the initial property portfolio of PCRT which was valued by CBRE as at 31 December 2010 on an “as if complete and fully leased” basis. 2 Based on the initial property portfolio of PCRT which was valued by CBRE as at 31 December 2010 and the Chengdu Longemont Mall’s 2011 independent valuation by CBRE of RMB12,500 per sqm of GFA as at 31 October 2011 on an “as if complete and fully leased” basis and based on the foreign exchange rate of RMB4.9061 = S$1.00. 3 The expected timing for the completion and commencement of operations as disclosed in the Prospectus. 4 This amount is derived by dividing PCRT’s cash outlay of RMB1.707 billion (assuming a PRC onshore debt facility of approximately RMB1.138 billion is taken by Chengdu Ruifeng) and based on the foreign exchange rate of RMB4.9061 = S$1.00.

37 (iii) assuming that the Trustee-Manager’s Acquisition Fee is paid in the form of Units at an assumed issue price of S$0.47691 per new Unit (purely for illustrative purposes only and based on the 10-day VWAP (as defined herein));

(iv) assuming that the incurred additional borrowings of S$355.0 million is fully funded through draw downs under the MTN Programme;

(v) using the estimated future value by CBRE of the Chengdu Longemont Mall in 2011; and

(vi) assuming an onshore debt funding of RMB 569.1 million2.

4.1.1 Pro Forma NAV

Assuming the Acquisition was completed on 30 September 2011, the pro forma financial effects of the Acquisition on the NAV per Unit as at 30 September 2011 would be as follows3:

Effects of the Acquisition Before the After the Acquisition Acquisition NAV (S$’000) 749,307 858,300 Issued Units (’000) 1,121,695 1,134,830 NAV per Unit (S$) 0.67 0.76

4.1.2 Pro Forma Capitalisation

Assuming PCRT had completed the Acquisition, issued no Units as consideration for the Acquisition and incurred additional borrowings of S$355.0 million on 30 September 2011, the following table sets forth the pro forma capitalisation of PCRT as at 30 September 20114:

1 The actual issue price of the Acquisition Fee Units to be issued to the Trustee-Manager will be at the relevant market price, being the volume weighted average price for a Unit for all trades on the SGX-ST in the ordinary course of trading on the SGX-ST for the period of 10 business days immediately preceding the relevant business day. “Business day” for this purpose means any day (other than a Saturday, Sunday or gazetted public holiday) on which commercial banks are generally open for business in Singapore and the SGX-ST is open for trading. 2 This amount is derived by assuming a PRC onshore debt facility of approximately RMB1.138 billion is taken by Chengdu Ruifeng and that PCRT’s investment in the Chengdu Longemont Mall is 50.0%. PCRT therefore assumes 50.0% of the onshore debt facility through its 50.0% ownership of Chengdu Ruifeng. 3 The pro forma financial effects were computed based on PCRT’s Unaudited Financial Statements as the financial results of the most recent completed financial year has not been released. 4 The pro forma capitalisation was computed based on PCRT’s Unaudited Financial Statements as the financial results of the most recent completed financial year has not been released.

38 Adjusted for Actual the Acquisition

(S$ million) (S$ million) Long-term debt: Secured debt 9.4 9.4 Unsecured debt 0 355.0

Total long-term debt 9.4 364.4 Total debt 9.4 364.4

Unitholders’ funds 749.3 858.3

Total Unitholders’ funds 749.3 858.3

Total Capitalisation 758.7 1,222.7

Based on the above assumptions, the aggregate leverage of PCRT as at 30 September 2011 is expected to be approximately 30.0%1.

As the Acquisition involves a development asset and there are no profits attributable to the Acquisition, the increase in DPU attributable to the Acquisition does not apply.

4.2 Requirement of Unitholders’ Approval

4.2.1 Major Transaction

(i) Chapter 10 of the Listing Manual governs the acquisition or disposal of assets, including options to acquire or dispose of assets, by PCRT. Such transactions are classified into the following categories:

(a) non-discloseable transactions;

(b) discloseable transactions;

(d) very substantial acquisitions or reverse takeovers.

(ii) A proposed acquisition by PCRT may fall into any of the categories set out in sub-paragraph 4.2.1(i) above depending on the size of the relative figures computed on the following bases of comparison:

(a) the net profits attributable to the assets acquired, compared with PCRT’s net profits;

(b) the aggregate value of the consideration given, compared with PCRT’s market capitalisation; and

(c) the number of Units issued by PCRT as consideration for an acquisition, compared with the number of Units previously in issue.

1 Excludes all onshore PRC loans by jointly-controlled entities of PCRT. For jointly-controlled entities of PCRT, such entities will be equity accounted for as an investment on the balance sheet of PCRT. Accordingly, the loans to such entities will not be reflected on the balance sheet of PCRT. The aggregate leverage of PCRT of these onshore PRC loans is approximately 36.0%.

39 Where any of the relative figures computed on the bases set out above exceeds 20.0%, the transaction is classified as a major transaction. The Listing Manual requires that a major transaction involving PCRT be made conditional upon approval by Unitholders in a general meeting. However, the approval of Unitholders is not required in the case of an acquisition of profitable assets if only sub-paragraph 4.2.1(ii)(a) exceeds the relevant 20.0% threshold.

The relative figure of the number of Units issued by PCRT as consideration for an acquisition compared with the number of Units previously in issue does not apply in relation to the Acquisition as no Units will be issued as consideration for the Acquisition.

The relative figure for the net profits attributable to the Acquisition does not apply as the Acquisition involves a development asset and there is no net profit attributable to the Acquisition.

(iii) The Acquisition: The relative figure for the Acquisition using the applicable bases of comparison described in sub-paragraph 4.2.1(ii)(b) is set out in the table below.

The Relative Comparison of: Acquisition PCRT figure (%) Consideration against 464.0 544.0(1) 85.3(1) market capitalisation (S$’million)

Note: (1) Based on PCRT’s market capitalisation of S$544.0 million as at the Latest Practicable Date.

As the aggregate value of the consideration for the Acquisition compared against PCRT’s market capitalisation is 85.3% and exceeds the 20.0% threshold imposed by Chapter 10 of the Listing Manual, the Acquisition is classified as a “major transaction” by PCRT under Chapter 10 of the Listing Manual.

4.2.2 Interested Person Transaction

Under Chapter 9 of the Listing Manual, where PCRT proposes to enter into a transaction with an interested person and the value of the transaction (either in itself or when aggregated with the value of other transactions, each of a value equal to or greater than S$100,000, with the same interested person during the same financial year) is equal to or exceeds 5.0% of PCRT’s latest audited net tangible assets (“NTA”), Unitholders’ approval is required in respect of the transaction.

As at the Latest Practicable Date, as Mr Tong Jinquan wholly owns Shanghai Summit Pte. Ltd. which holds 167,142,000 Units (comprising 14.9% of the Existing Units), Mr Tong Jinquan is deemed to be interested in 167,142,000 Units. As stated in the Prospectus, for purposes of good corporate governance, the Trustee-Manager has volunteered that from the Listing Date, for so long as Mr Tong Jinquan and his associates own 5.0% or more of the aggregate number of Units in issue, Mr Tong Jinquan and his associates shall be deemed as an “interested person” under the Listing Manual. As Mr Tong Jinquan and his associates own 14.9% of the Existing Units, the Acquisition pursuant to the entry into by PCRPL of the Framework Agreement will be regarded as an “interested person transaction” under Chapter 9 of the Listing Manual.

40 Based on the PCRT Unaudited Financial Statements (as there are no available audited financial statements of PCRT), the NTA of PCRT and its subsidiaries was S$749.3 million as at 30 September 2011. Accordingly, if the value of a transaction which is proposed to be entered into in the current financial year by PCRT with an interested person is, either in itself or in aggregation with all other earlier transactions (each of a value equal to or greater than S$100,000) entered into with the same interested person during the current financial year ending 31 December 2012, equal to or in excess of S$37.5 million, such a transaction would be subject to Unitholders’ approval. Given the Purchase Consideration of approximately RMB2.28 billion (which is 61.9% of the NTA of PCRT as at 30 September 2011), the value of the Acquisition exceeds the said threshold.

Excluding transactions which are deemed to be specifically approved at the initial public offering of PCRT1, the current total for the present financial year of all transactions with Mr Tong Jinquan and his associates is nil and the current total for the present financial year of all interested person transactions with Mr Pua Seck Guan and his associates is nil.

4.2.3 Fees Payable to the Trustee-Manager

The Trustee-Manager will be entitled under the Trust Deed to receive an Acquisition Fee of approximately S$6.3 million payable in Units to the Trustee-Manager. The Acquisition Fee Units shall be payable to the Trustee-Manager upon the satisfaction of both the following conditions (i) the completion of the acquisition by PCRPL of the BVI SPV and (ii) the obtaining of the four permits2 by Chengdu Ruifeng and the amount of the Acquisition Fee will be based on the Purchase Consideration computed based on the GFA as set out in the Construction Planning Certificate and assuming that PCRT acquires a 50.0% interest in Chengdu Longemont Mall Development. Should PCRT exercise the option to increase its stake in Chengdu Longemont Mall Development, an additional amount of Acquisition Fee will be payable upon such exercise. The Acquisition Fee Units are expected to be issued in the first half of 2012 after the satisfaction of the abovementioned two conditions. Although all Acquisition Fee Units once issued will be entitled to the distributions payable after their date of issuance, the Acquisition Fee Units in this case will not be entitled to any distributions in respect of the distribution period from 1 January 2012 to 31 December 2012. The Acquisition Fee Units will be credited into a separate account and instructions will be provided by the Trustee-Manager to CDP not to pay any distributions in respect of the period from 1 January 2012 to 31 December 2012 to such account.

1 The interested person transactions which are deemed to be specifically approved at the initial public offering of PCRT are (i) the fees and charges payable by PCRT under the Trust Deed and (ii) the entry into and the fees and charges payable by PCRT under the Master Perennial Development and Property Management Agreement, the Initial Perennial Development and Property Management Agreements, any After Acquired Development and Property Management Agreement and the Perennial-Summit Development and Property Management Agreement (each as defined in the Prospectus). 2 Refers to the four approvals from the PRC governmental authorities, being (i) the land use right certificate (土地使用證), (ii) the construction land planning permit (建設用地規劃許可證), (iii) the construction project planning permit (建設工程規劃許可證) and (iv) the construction permit (建築工程施工許可證), which are expected to be received in the first quarter of 2012.

41 Taking into account that the Acquisition Fee of approximately S$6.3 million is paid to the Trustee-Manager in Units, and assuming that the Units are issued at S$0.47691 per Acquisition Fee Unit (purely for illustrative purposes only and based on the 10-day VWAP), approximately 13.1 million Units will be issued to the Trustee-Manager, comprising 1.2% of the Existing Units.

From completion of the Acquisition, the Trustee-Manager will have the general power of management over the Property and its main responsibility is to manage the Property, as well as other assets and liabilities of PCRT, for the benefit of Unitholders. In particular, the Trustee-Manager is responsible for the day-to-day management of the Property, making recommendations to the Trustee on the annual budget and the management and operation of the Property, and generally carrying out the activities in relation to the Property in accordance with the provisions of the Trust Deed.

After completion of the Acquisition, the Trustee-Manager will also be entitled under the Trust Deed to receive from PCRT management fees attributable to the Property comprising:

(i) a base fee calculated at a rate in accordance with the formula below:

(a) if the value of the Trust Property is less than or equal to S$10.0 billion, the Base Fee will be 0.35% per annum of the value of the Trust Property; and

(b) if the value of the Trust Property is greater than S$10.0 billion, the Base Fee will be (a) 0.35% per annum of the value of the Trust Property up to S$10.0 billion; plus (b) 0.30% per annum of the value of the Trust Property which exceeds S$10.0 billion,

and paid quarterly; and

(ii) a performance fee of 4.5% per annum of the NPI of the Trust Property.

The Trustee-Manager will be entitled to the management fees attributable to the Property in the future for so long as the Property continues to form part of the investment portfolio of PCRT.

4.2.4 Approval by Unitholders

In approving the Acquisition, Unitholders are deemed to have approved the Property Management Agreement upon the completion of the Acquisition and the payment of the Acquisition Fees in respect of the Acquisition as set out in paragraph 4.2.3 above.

The Property Management Agreement is, therefore, not subject to Rules 905 and 906 of the Listing Manual (which require PCRT to make an announcement or obtain the approval of Unitholders depending on the materiality of the interested person transactions) insofar as there are no subsequent changes to the rates and/or basis of the fees charged thereunder which will adversely affect PCRT. Future renewal or extension of the Property Management Agreement will be subject to Rules 905 and 906 of the Listing Manual.

42 4.3 Directors’ Service Contracts

No person is proposed to be appointed as a Director in connection with the Acquisition or any other transactions contemplated in relation to the Acquisition.

4.4 Certain other Considerations

4.4.1 Certain Commercial Risks

The Property is being acquired on a “completed” basis. Notwithstanding this, the Property is a substantial development property in a promising, emerging market and as such is subject to a number of commercial and market risks.

Such commercial risks include, but are not limited to, the ability of the Summit Group to fulfil their obligations under the Framework Agreement, delays in completion and handover, delivery defects, legal disputes with contractors and may incur unexpected expenses and liabilities resulting in losses for which PCRT may not be adequately compensated by insurance proceeds and/or contractual indemnities.

PCRT’s decision to invest in the Property is based upon the Trustee-Manager’s expert assessment of the potential market demand for retail space in Chengdu. There is no guarantee that such demand will be realised when the Property is completed, that the Property will be leased to the extent expected or that such leases as may be entered into on the terms forecast.

Any such commercial risks and/or significant periods of vacancy or unfavourable lease terms will adversely impact the revenue, profitability and realised value of the Property.

The Trustee-Manager has mitigated the impact of such risks eventuating by ensuring that the purchase price for the Property is settled at a discount to the Market Valuations on an “as if complete and fully leased” basis, by ensuring that the Acquisition contemplates a purchase price which requires that Shanghai Summit deliver on a “completed” basis and that the payment structure is largely back-loaded (which serves to reduce interest and other related expenses for the Acquisition).

4.4.2 Certain Financing Risks

PCRT may require additional debt financing to fund the Acquisition. There can be no assurance that such financing will be available at that time, on acceptable terms.

PCRT’s ability to generate sufficient cash to satisfy its outstanding and future debt obligations will depend upon its future operating performance, which will be affected by prevailing economic conditions and financial, business and other factors, many of which are beyond its control. There is no guarantee that PCRT will generate sufficient cash flow to meet all of its debt obligations. If PCRT is unable to service its debt facilities, PCRT will be forced to adopt an alternative strategy that may include actions such as reducing or delaying capital expenditures, selling assets, restructuring or refinancing its indebtedness or seeking equity capital. These strategies may not be instituted on satisfactory terms, if at all.

If PCRT is unable to make payments due under such debt facilities, or if principal amounts due for repayment at maturity cannot be refinanced, extended or repaid with proceeds from other capital transactions, the financial condition, cash flows and prospects of PCRT would be materially and adversely affected. Further, in the event of non-payment, or failure to refinance or extend the debt facilities, the lenders may be

43 able to declare an event of default and initiate enforcement proceedings in respect of any security provided in respect of such borrowings and/or call upon the guarantees provided. To the extent PCRT’s properties are mortgaged to secure payment of debt facilities and the interest or principal payments under such debt facilities cannot be met, such mortgaged property could be foreclosed by the lender or the lender could require a forced sale of the mortgaged property which may materially and adversely affect the business, financial condition and results of operations and prospects of PCRT and may result in a reduction of the NAV of the Units.

If prevailing interest rates or other factors at the time of refinancing (such as the possible reluctance of lenders to make retail property loans) result in higher interest rates upon refinancing, the interest expense relating to such refinanced indebtedness would increase, thereby adversely affecting PCRT’s cash flow and the amount of funds available for its development projects.

There is also the risk that movements in foreign currency exchange rates or changes to the interest rates may adversely affect repayments of borrowings by PCRT denominated in foreign currency.

5. METHOD OF FINANCING THE ACQUISITION

The Trustee-Manager intends to fund the Acquisition wholly by debt financing through one or a combination of the following methods:

(i) the Trustee-Manager will seek the consent of the Credit Facilities Agreement Lenders, DBS Bank Ltd. and Standard Chartered Bank, the lenders of its existing Credit Facilities Agreement1, to allow it to apply part of the proceeds from the Credit Facilities Agreement towards payments under the Framework Agreement. In order to obtain the Lenders’ consent, the Trustee-Manager is taking steps to secure onshore PRC debt financing to finance part of the Acquisition and Development Costs, to be secured over Foshan Yicui Shijia Shopping Mall and Chengdu Qingyang Guanghua Shopping Mall. In this regard, the Trustee-Manager has received onshore PRC debt financing proposals from banks for an amount of RMB420.0 million;

1 The Trustee-Manager, on behalf of PCRT, had on 27 May 2011 entered into the Credit Facilities Agreement with DBS Bank Ltd. and Standard Chartered Bank for the Credit Facilities in an aggregate amount of S$325.0 million comprising (i) committed term loan facilities of S$195.0 million to finance distributions to Unitholders, interest payments under the Credit Facilities and part of the progress payments by PCRT for the Acquisition and Development Costs in respect of Foshan Yicui Shijia Shopping Mall and Chengdu Qingyang Guanghua Shopping Mall and (ii) and uncommitted revolving credit facility of S$130.0 million to finance the remaining Acquisition and Development Costs. Further details of the Credit Facilities Agreement are set out in the section “Use of Proceeds” of the Prospectus.

44 (iii) the Trustee-Manager has also established its S$500,000,000 MTN Programme on 20 January 2012 and it expects to tap the debt capital markets through draw downs under the MTN Programme1; and

(iv) when the Chengdu Longemont Mall commences operations and receives its building title deed, the Trustee-Manager may take a New Loan Facility which is secured on the shares of the subsidiaries of PCRT which own directly or indirectly the Chengdu Longemont Mall Interest. The amount of the New Loan Facility will be determined by the Trustee-Manager at the relevant time, after taking into account the amounts raised under the Credit Facilities Agreement and the MTN Programme.

The first 15.0% of the Purchase Consideration and the 40.0% of the Purchase Consideration payable at the stage of “topping-out”2 of the Chengdu Longemont Mall are expected to be funded by a combination of the proceeds from the Credit Facilities Agreement and draw downs under the MTN Programme.

In addition, the Trustee-Manager and the Summit Group expect to source a PRC onshore debt facility of approximately RMB1.138 billion (S$232.0 million) to be taken by Chengdu Ruifeng to fund the construction costs of the Chengdu Longemont Mall which is expected to be secured by way of a mortgage over the Chengdu Longemont Mall. In such an event, the cash outlay of PCRT will be reduced by 50.0% of the amount to be funded by such debt facility and is expected to be approximately RMB1.707 billion3. As PCRT is investing in 50.0% of Chengdu Longemont Mall on a “completed” basis at RMB10,000 per sqm of GFA, the risks of construction costs overruns will be borne by the Summit Group alone. PCRT will not be bearing additional construction costs. If an onshore project development loan is taken by Chengdu Ruifeng to fund construction costs, PCRT’s cash outlay for the Acquisition will be correspondingly reduced by PCRT’s share of Chengdu Ruifeng’s onshore debt.

1 Unitholders should note that the MTN Programme is not a committed line of credit and any issuance of notes under the MTN Programme is subject to the market conditions at the relevant time. 2 Refers to the overall completion of the building’s structure. 3 If Chengdu Ruifeng is able to take an onshore PRC development loan, the amount that the shareholders of Chengdu Ruifeng will need to inject as equity capital to fund the construction costs will be decreased by the amount of the development loan. Assuming that PCRT is investing only in 50.0% of the Chengdu Longemont Mall, then the cash outlay will be reduced by 50.0%.

45 6. ADVICE OF THE INDEPENDENT FINANCIAL ADVISER

The Trustee-Manager has appointed Deloitte & Touche Corporate Finance Pte Ltd as the Independent Financial Adviser to advise the independent directors of the Trustee-Manager (the “Independent Directors”) and the audit and risk committee of the Trustee-Manager (the “Audit and Risk Committee”) in relation to the Acquisition. A copy of the letter from the Independent Financial Adviser to the Independent Directors and members of the Audit and Risk Committee (the “Independent Financial Adviser’s Letter”), containing its advice in full, as set out in Appendix B of this Circular and Unitholders are advised to read the Independent Financial Adviser’s Letter carefully.

Having considered the factors and the assumptions set out in the Independent Financial Adviser’s Letter, and subject to the qualifications set out therein, the Independent Financial Adviser is of the opinion that the Acquisition is based on normal commercial terms and is not prejudicial to the interests of PCRT and its minority Unitholders.

The Independent Financial Adviser is of the opinion that the Independent Directors can recommend that Unitholders vote in favour of the resolutions in connection with the Acquisition.

7. THE PROPOSED TRUST DEED AMENDMENT IN RELATION TO THE FORM OF PAYMENT OF MANAGEMENT FEES

7.1 The Trust Deed Supplement in relation to the Form of Payment of Management Fees

While the existing Trust Deed does not expressly prevent the Trustee-Manager from being able to receive its management fees in cash in the scenario where the issue price is below the NAV per Unit, the Trustee-Manager had elected in the Prospectus to receive the base fee and the performance fee wholly in cash in the scenario where the issue price is below the NAV per Unit.

(See Appendix E of this Circular for further details of the Trust Deed Supplement in relation to the form of payment of Management Fees.)

7.2 Rationale for the Trust Deed Supplement in relation to the Form of Payment of Management Fees

1 Please refer to the “Glossary” for the definition of “Market Price” as defined in the Trust Deed.

46 However, given the current market volatility and the prevalent trend of listed entities trading at share or unit prices that are below their NAV, the Trustee-Manager is of the view that the Trust Deed Supplement in relation to the form of payment of Management Fees which will enable the Trustee-Manager to have the flexibility to elect to receive its management fees in either cash or Units even when the issue price of each Unit is below the NAV per Unit, where the payment of the fees in either cash or Units (as the case may be) is in the best interests of Unitholders and PCRT. The alternative of taking its fees in cash would have an adverse impact on the amount of cash available for distribution to Unitholders. Dilution will take place in any case when the Trustee-Manager elects to receive the fees in Units, regardless of whether the issue price is below the Market Price. In this instance, the Trustee-Manager considers the impact of potential loss of distributions to Unitholders as more adverse compared to the impact of equity dilution. The option for the Trustee-Manager to be able to elect to receive its management fees in such an event would also further align the interests of the Trustee-Manager with PCRT. In addition, such a fee payment structure is also common among listed business trusts and real estate investment trusts in Singapore.

7.3 Advice of the Independent Financial Adviser

Having considered the factors and the assumptions set out in the Independent Financial Adviser’s Letter, and subject to the qualifications set out therein, the Independent Financial Adviser is of the opinion that the Trust Deed Amendment in relation to the form of payment of Management Fees is based on normal commercial terms and is not prejudicial to the interests of PCRT and its minority Unitholders.

8. THE PROPOSED TRUST DEED SUPPLEMENT IN RELATION TO ACQUISITION FEES

8.1 The Trust Deed Supplement in relation to Acquisition Fees

Currently, the Trustee-Manager charges an acquisition fee of 1.35% of:

(i) in the case of an acquisition of real estate, the acquisition price of such real estate purchased by PCRT, whether directly or indirectly through one or more special purpose vehicles (plus any other payments in addition to the acquisition price made by PCRT or its special purpose vehicles to the vendor in connection with the purchase of the real estate) (pro-rated, if applicable, to the proportion of PCRT’s interest);

(ii) in the case of an acquisition of the equity interests of any vehicle holding directly or indirectly the real estate, the underlying value of such real estate which is taken into account when computing the acquisition price payable for the equity interests of such vehicle holding directly or indirectly the real estate purchased by PCRT, (plus any additional payments made by PCRT or its special purpose vehicles to the vendor through one or more special purpose vehicles in connection with the purchase of such equity interests) (pro-rated, if applicable, to the proportion of PCRT’s interest); or

(iii) the acquisition price of any other asset forming a part of the Trust Property acquired by the Trustee-Manager on behalf of PCRT.

The Acquisition Fee is:

(i) (in relation to an acquisition of any Trust Asset which is a project involving the development of land, or buildings, or part(s) thereof on land which is acquired (the “Development Trust Asset”)) is payable as soon as practicable when PCRT enters into the relevant Pre-Sale Agreement (as defined herein) or an unconditional sale and purchase agreement; and

47 (ii) (in relation to an acquisition of any other Trust Asset (as defined herein) other than a Development Trust Asset) payable as soon as practicable on or after completion of the acquisition.

The Trustee-Manager is seeking Unitholders’ approval under Clause 25.2 of the Trust Deed (which relates to the requirement to obtain the approval of Unitholders to modify the Trust Deed) to supplement the Trust Deed with the Trust Deed Supplement in relation to Acquisition Fees for the purpose of allowing the Trustee-Manager to receive its Acquisition Fee which it is entitled to under the Trust Deed on (i) the completion of the subscription or, as the case may be, acquisition of the shares of the company which may directly or indirectly own the land and undertake development of the land and (ii) and the necessary permits1 in connection with the land and the construction of the asset having been obtained.

(See Appendix F of this Circular for further details of the Trust Deed Supplement in relation to Acquisition Fees.)

8.2 Rationale for the Trust Deed Supplement in relation to Acquisition Fees

(i) The Trust Deed does not expressly provide for the process for the payment of the Acquisition Fee in such a method of investment in Development Trust Assets

PCRT’s principal investment objectives are to invest in, own and develop land, uncompleted developments and income-producing real estate in the PRC.

For the proposed investment in the Chengdu Longemont Mall, the Trustee-Manager had entered into the Framework Agreement for the investment in Chengdu Ruifeng, a special purpose company which will acquire the Underlying Land and undertake development of the Underlying Land. The Trustee-Manager may also invest in other development assets through a similar process of entering into a framework agreement with, inter alia, the vendor for the investment in a special purpose company which will acquire the land and undertake development of the land. The Trust Deed does not expressly provide for the process for the payment of the Acquisition Fee if PCRT invests in development assets through this method.

The Trust Deed currently only provides for the following:

(i) Acquisition of any Trust Asset (other than a Development Trust Asset) (each as defined in the Trust Deed) which would typically apply to completed assets.

The Acquisition Fee is payable as soon as practicable on or after completion of the acquisition.

(ii) Acquisition of any Development Trust Asset which is a project involving the development of land, or buildings, or part(s) thereof on land which is acquired.

In the case of Foshan Yicui Shijia Shopping Mall, PCRT will, through its wholly-owned subsidiary, enter into a pre-sale agreement with the vendor prior to completion. Thereafter, PCRT will take delivery of the asset on a “completed” basis when the asset is completed by the vendor. The Trust Deed provides for the Acquisition Fee of 1.35% of the purchase price of the asset to be payable on the entry into of the pre-sale agreement, when PCRT has a registrable interest in respect of the asset. At this stage, although the asset has not been completed, the acquisition process in securing a development asset for investment by PCRT has been completed.

1 As at the date of this Circular, the necessary permits from the PRC governmental authorities are (i) the land use right certificate (土地證), (ii) the construction land planning permit (建設用地規劃許可證), (iii) the construction project planning permit (建設工程規劃許可證) and (iv) the construction permit (建築工程施工許可證), which are expected to be received in the first quarter of 2012.

48 In the case of Chengdu Qingyang Guanghua Shopping Mall, PCRT will, through its wholly-owned subsidiary, enter into an unconditional sale and purchase agreement with the vendor when the construction of the project reaches 25.0% of the total investment amount of the project (excluding land cost). Thereafter, PCRT will develop the project to completion. The Trust Deed provides for the Acquisition Fee of 1.35% on the purchase price of the land. The Acquisition Fee is payable on the entry into of the unconditional sale and purchase agreement. At this stage, the acquisition process in securing the development asset for investment by PCRT is completed.

(iii) Acquisition of the Shenyang Properties

In the case of the Shenyang Properties (where only one out of the three Shenyang Properties was completed on the Listing), the Trust Deed provides for the Acquisition Fee to be payable on the Listing Date. At such a stage, the acquisition process in securing the development asset for investment by PCRT is completed and (i) PCRT had completed its acquisition of the equity interests in Shenyang Summit, (ii) Shenyang Summit had obtained the four permits1 in relation to the land on which the Shenyang Properties are situated and (iii) the relevant PRC governmental authorities had granted their approval for PCRT’s investment in Shenyang Summit. However, the Trust Deed does not expressly provide for when the Acquisition Fee is payable for this method of investment, which is in many ways similar to the proposed investment in the Chengdu Longemont Mall.

(ii) The conditions for the payment of the Acquisition Fee are met

For the proposed acquisition of the Chengdu Longemont Mall and future proposed investments via acquisition of shares of the company which may directly or indirectly own the land and undertake development of the land, the Acquisition Fee for the investment by PCRT in such Development Trust Asset should be payable when the following two conditions are met as the acquisition process in securing the Development Trust Asset for investment by PCRT would have been completed:

(i) when PCRT has completed its acquisition or, as the case may be, subscription of the shares of the SPV which will directly or indirectly own the land and undertake development of the land; and

(ii) when the abovementioned SPV directly or indirectly obtains title to the land and the necessary permits2 in connection with the Special Purpose Vehicle’s title to the land and the construction of the asset have been obtained.

1 As at the date of this Circular, the necessary permits from the PRC governmental authorities are (i) the land use right certificate (土地使用證), (ii) the construction land planning permit (建設用地規劃許可證), (iii) the construction project planning permit (建設工程規劃許可證) and (iv) the construction permit (建築工程施工許可證), which are expected to be received in the first quarter of 2012. 2 As at the date of this Circular, the necessary permits from the PRC governmental authorities are (i) the land use right certificate (土地使用證), (ii) the construction land planning permit (建設用地規劃許可證), (iii) the construction project planning permit (建設工程規劃許可證) and (iv) the construction permit (建築工程施工許可證), which are expected to be received in the first quarter of 2012.

49 In addition, if the Final GFA of the completed Chengdu Longemont Mall is lower than the Transactional GFA on which the Acquisition Fee was computed and paid by more than 3.0% of the Estimated Gross Floor Area, the Trustee-Manager shall return in part, the Units (together with any distributions paid thereon) that it received. In the event that the Final GFA of the completed Chengdu Longemont Mall is higher than the Transactional GFA by more than 3.0%, the Trustee-Manager shall be paid the difference in the Acquisition Fee in Units as the Trustee-Manager. For the avoidance of doubt, in the event that the Final GFA is lower or higher than the Transactional GFA by less than 3.0%, there will be no adjustments to the Acquisition Fee.

8.3 Once approved, the form and time of payment of the Acquisition Fee will be applicable for all future acquisitions of Development Trust Assets of PCRT in the manner set out above. For the avoidance of doubt, no acquisition fees and other additional fees have been paid to the Trustee-Manager for the acquisition of the land surrounding and adjacent to the Chengdu East HSR Station.

8.4 Unitholders were deemed to have given their approval for the payment of an Acquisition Fee at the time of the initial public offering. Clause 13.2.3 (ii) (b) of the Trust Deed covers the timing of payment for such fees for development assets such as Chengdu Longemont Mall. The clause presently reads as follows:

“in relation to an acquisition of any Trust Asset which is a project involving the development of land, or buildings, or part(s) thereof on land which is acquired (the “Development Trust Asset”) is payable as soon as practicable when PCRT enters into the relevant Pre-Sale Agreement (as defined herein) or an unconditional sale and purchase agreement”.

In this circumstance, the commercial arrangements struck are such that there is neither a Pre-Sale Agreement nor an unconditional sale and purchase agreement. The Trustee-Manager is of the view that the proposed amendment to the Trust Deed serves to provide further specific guidance as to when such Acquisition Fees should be paid in such circumstances.

As the payment of the Acquisition Fee has already been approved by Unitholders and the amendment serves to provide further specific guidance as to when such fees should be paid, the Trustee-Manager does not believe that it is necessary for the Independent Financial Adviser to opine on the proposed amendments to the Trust Deed.

9. DIRECTORS’ RECOMMENDATION

9.1 On the Acquisition

Based on the opinion of the Independent Financial Adviser (as set out in the Independent Financial Adviser’s Letter in Appendix B of this Circular) which states, among other things, that the Purchase Consideration is broadly in line with the average value for certain selected retail properties located in Chengdu and other Tier II cities in China, and the rationale of the Acquisition as set out in paragraph 3.1 above, the Audit and Risk Committee believes that the Acquisition is based on normal commercial terms and would not be prejudicial to the interests of PCRT and its minority Unitholders.

The Independent Directors recommend that Unitholders vote at the EGM in favour of the resolution to approve the Acquisition (Resolution 1).

The Board of Directors unanimously believes that the Acquisition is consistent with PCRT’s strategic business objectives and the commercial merits of the Acquisition as set out in the Circular are deserving of the full support of Unitholders.

50 9.2 On the Trust Deed Supplement in relation to the Form of Payment of Management Fees and the Trust Deed Supplement in relation to Acquisition Fees

The Directors have considered the relevant factors, including the rationale for the Trust Deed Supplement in relation to the form of payment of Management Fees as set out in paragraph 7.2 above and the rationale for the Trust Deed Supplement in relation to Acquisition Fees as set out in paragraph 8.2 above, and recommend that Unitholders vote at the EGM in favour of the proposed Trust Deed Supplement in relation to the form of payment of Management Fees (Resolution 2) and the Trust Deed Supplement in relation to Acquisition Fees (Resolution 3).

10. EXTRAORDINARY GENERAL MEETING

The EGM will be held on Monday, 13 February 2012 at 10.30 a.m. at Rooms 325-326, Level 3, Suntec Singapore International Convention & Exhibition Centre, 1 Raffles Boulevard, Suntec City, Singapore 039593, for the purpose of considering and, if thought fit, passing with or without modification, the resolutions set out in the Notice of EGM, which is set out on page I-1 of this Circular. The purpose of this Circular is to provide Unitholders with relevant information about each of the resolutions in relation to the Acquisition of a 50.0% Interest in Chengdu Longemont Shopping Mall Development from an Interested Person, the Trust Deed Supplement in relation to the form of payment of Management Fees and the Trust Deed Supplement in relation to Acquisition Fees. Approval by way of Ordinary Resolution is required in respect of the resolution relating to the Acquisition of a 50.0% Interest in Chengdu Longemont Shopping Mall Development from an Interested Person. Approval by way of Extraordinary Resolutions is required in respect of the Trust Deed Supplement in relation to the form of payment of Management Fees.

A Depositor shall not be regarded as a Unitholder entitled to attend the EGM and to speak and vote thereat unless he is shown to have Units entered against his name in the Depository Register, as certified by CDP as at 48 hours before the EGM.

11. ABSTENTIONS FROM VOTING

Rule 919 of the Listing Manual prohibits interested persons and their associates (as defined in the Listing Manual) from voting on a resolution in relation to a matter in respect of which such persons are interested in at the EGM. In addition, as stated in the Prospectus, for purposes of good corporate governance, the Trustee-Manager has volunteered that from the Listing Date, for so long as Mr Tong Jinquan and his associates own 5.0% or more of the aggregate number of Units in issue, Mr Tong Jinquan and his associates shall be deemed as an “interested person” under the Listing Manual. As Mr Tong Jinquan and his associates own 167,142,000 Units (which is amounts to 14.9% of the Existing Units), Mr Tong Jinquan is regarded as an interested person under Chapter 9 of the Listing Manual. In addition, as at the Latest Practicable Date, as Mr Pua Seck Guan1 wholly owns PREPL2 which in turn owns 78.0% of the total issued share capital of the Trustee-Manager, Mr Pua Seck Guan is deemed to be interested in 78.0% of the total issued share capital of the Trustee-Manager and is therefore a “controlling shareholder” of the Trustee-Manager. The Trustee-Manager holds 12,895,000 Units which comprises 1.1% of the Existing Units.

1 Mr Pua Seck Guan holds 42,466,002 or 3.79% of the Existing Units. 2 Perennial Real Estate Pte. Ltd. holds 28,571,000 or 2.55% of the Existing Units.

51 Given that the Acquisition will be undertaken pursuant to the terms of the Framework Agreement entered into by PCRPL with Mr Tong Jinquan, Shanghai Summit, Chengdu Summit, Chengdu Ruifeng and Shanghai Summit Pte. Ltd. and the Property Manager is an indirect subsidiary of Perennial Real Estate Pte. Ltd. which is wholly-owned by Mr Pua Seck Guan, the Chief Executive Officer and a Director of the Trustee-Manager and deemed to be a “controlling shareholder” of the Trustee-Manager, Shanghai Summit Pte. Ltd. (through which Mr Tong Jinquan is deemed to hold its unitholding interests in PCRT), Mr Pua Seck Guan and the Trustee-Manager and Perennial Real Estate Pte. Ltd. (through which Mr Pua Seck Guan is deemed to hold its unitholding interests in PCRT) will abstain from voting, and Mr Tong Jinquan and Mr Pua Seck Guan will ensure that their associates abstain from voting on the resolution relating to the Acquisition.

Given that the Proposed Trust Deed Supplement in relation to Acquisition Fees directly affects the timing of payment receivable by the Trustee-Manager in respect of its Acquisition Fees, the Trustee-Manager and its associates will abstain from voting on the resolution relating to the Proposed Trust Deed Supplement in relation to the Acquisition Fees.

Given that the Proposed Trust Deed Supplement in relation to the form of payment of Management Fees directly affects the form of payment receivable by the Trustee-Manager in respect of its Management Fees, the Trustee-Manager and its associates will abstain from voting on the resolution relating to the Proposed Trust Deed Supplement in relation to the form of payment of Management Fees.

12. ACTION TO BE TAKEN BY UNITHOLDERS

Unitholders will find enclosed in this Circular the Notice of EGM and a Proxy Form.

If a Unitholder is unable to attend the EGM and wishes to appoint a proxy to attend and vote on his behalf, he should complete, sign and return the enclosed Proxy Form in accordance with the instructions printed thereon as soon as possible and, in any event, so as to reach the Unit Registrar’s registered office at 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623 not later than 10.30 a.m. on Saturday, 11 February 2012, being 48 hours before the time fixed for the EGM. The completion and return of the Proxy Form by a Unitholder will not prevent him from attending and voting in person at the EGM if he so wishes.

Persons who have an interest in the approval of the resolutions must decline to accept appointment as proxies unless the Unitholder concerned has specific instructions in his Proxy Form as to the manner in which his votes are to be cast in respect of such resolution.

13. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors collectively and individually accept full responsibility for the accuracy of the information given in this Circular and confirm after making all reasonable enquiries that, to the best of their knowledge and belief, this Circular constitutes full and true disclosure of all material facts about the Acquisition, the Trust Deed Supplement in relation to the form of payment of Management Fees and the Trust Deed Supplement in relation to Acquisition Fees, PCRT and its subsidiaries and the Directors are not aware of any facts the omission of which would make any statement in this Circular misleading. Where information in this Circular has been extracted from or otherwise publicly available sources or obtained from a named source, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from such sources and/or reproduced in this Circular in its proper form and context.

52 14. CONSENT

Each of the Independent Financial Adviser, the independent valuers, CBRE and Colliers, and the independent property consultant, Urbis Pty Ltd has given and has not withdrawn its written consent to the issue of this Circular with the inclusion of its name and, respectively, the Independent Financial Adviser’s Letter, the valuation summary letters and the Chengdu Retail Market Review and all references thereto, in the form and context in which they are included in this Circular.

15. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours at the registered office of the Trustee-Manager at 6 Temasek Boulevard, #25-04/05 Suntec Tower Four, Singapore 0389861 from the date of this Circular up to and including the date falling three months after the date of this Circular:

(i) the Framework Agreement;

(ii) the Independent Financial Adviser’s Letter;

(iii) the valuation report and valuation summary letter in relation to the Chengdu Longemont Mall issued by CBRE;

(iv) the valuation report and valuation summary letter in relation to the Chengdu Longemont Mall issued by Colliers;

(v) the Chengdu Retail Market Review prepared by the Independent Property Consultant;

(vi) the PCRT Unaudited Financial Statements;

(vii) the Property Management Agreement;

(viii) the New Earn-out Deed;

(ix) the Option Agreement; and

(x) the written consents of each of the Independent Financial Adviser, the independent valuers, CBRE and Colliers and the Independent Property Consultant.

The Trust Deed will be available for inspection at the registered office of the Trustee-Manager for so long as PCRT is in existence.

Yours faithfully

PERENNIAL CHINA RETAIL TRUST MANAGEMENT PTE. LTD. (as Trustee-Manager of Perennial China Retail Trust) Company Registration No. 201024622Z

Mr Boon Swan Foo Chairman & Independent Non-Executive Director

1 Prior appointment with the Trustee-Manager (telephone: +65 6602 6800) will be appreciated.

53 IMPORTANT NOTICE

The value of Units and the income derived from them may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by, the Trustee-Manager or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested.

Investors have no right to request the Trustee-Manager to redeem their Units while the Units are listed. It is intended that Unitholders may only deal in their Units through trading on the SGX-ST. Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units.

The past performance of PCRT is not necessarily indicative of the future performance of PCRT. This Circular may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of property rental income, changes in operating expenses (including employee wages, benefits and training costs), property expenses and governmental and public policy changes. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the Trustee- Manager’s current view of future events.

If you have sold or transferred all your Units, you should immediately forward this Circular, together with the Notice of EGM and the accompanying Proxy Form, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee.

This Circular is not for distribution, directly or indirectly, in or into the United States. It is not an offer of securities for sale into the United States. The Units have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”), or the securities of any state or jurisdiction of the United States and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as such term is defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities laws. There will be no public offer of securities in the United States.

54 GLOSSARY

In this Circular, the following definitions apply throughout unless otherwise stated:

10-day VWAP : The VWAP for a Unit for all trades on the SGX-ST for the period of 10 business days immediately preceding 13 January 2012

ABC Loan : Credit facilities granted by the Agricultural Bank of China to Shenyang Summit

Acquisition : The acquisition of the Chengdu Longemont Mall Interest in the Chengdu Longemont Mall

Acquisition Fee : The acquisition fee of approximately S$6.3 million (being 1.35% of the Purchase Consideration) payable to the Trustee-Manager

Amended and Restated : The Earn-out Deed, as amended and restated on 3 November Earn-out Deed 2011

Audit and Risk : The audit and risk committee of the Trustee-Manager comprising Committee Mr Wong Tui San, Mr Boon Swan Foo and Mr Pok Soy Yoong

Board : The board of directors of the Trustee-Manager

BTA : Business Trusts Act, Chapter 31A of Singapore

Business Day : Any day (other than a Saturday, Sunday or gazetted public holiday) on which commercial banks are open for business in Singapore and, where the context requires, any other jurisdiction, and the SGX-ST (and, if PCRT is Listed on any other Recognised Stock Exchange, that Recognised Stock Exchange) is open for trading

BVI SPV : A special purpose company incorporated under the laws of the British Virgin Islands

BVI SPV Share Transfer : An undated agreement transferring all of Ms Tong Yuqian’s Agreement shares in the BVI SPV to PCRT

CBD : Central Business District

CBRE : CB Richard Ellis (Pte) Ltd

CDP : The Central Depository (Pte) Limited

Chengdu Longemont : Chengdu Longemont Shopping Mall Development Mall

Chengdu Longemont : The interest of 50.0%, with the flexibility to increase to up to Mall Interest 80.0% interest, in the Chengdu Longemont Mall

Chengdu Longemont : The option granted on 21 March 2011 by Shanghai Summit Mall Interest Option (Group) and Shanghai Summit to PREPL and PCRPL for the acquisition of the Chengdu Longemont Mall Interest at the Purchase Consideration

Chengdu Ruifeng : Chengdu Ruifeng Real Estate Development Co., Ltd.

55 Chengdu Ruifeng First : The first subscription by the Hong Kong SPV for new equity Capital Increase interests in Chengdu Ruifeng through the injection of capital into Chengdu Ruifeng

Chengdu Ruifeng Second : The second subscription by the Hong Kong SPV for new equity Capital Increase interests in Chengdu Ruifeng through the additional injection of capital into Chengdu Ruifeng

Circular : This circular to unitholders dated 20 January 2012

Colliers : Colliers International (Hong Kong) Ltd

Credit Facilities : The facilities agreement entered into on 27 May 2011 by the Agreement Trustee-Manager on behalf of PCRT with the Credit Facilities Agreement Lenders

Credit Facilities : DBS Bank Ltd. and Standard Chartered Bank Agreement Lenders

DPU : Distribution per Unit

EGM : The Extraordinary General Meeting to be held on Monday, 13 February 2012 at 10.30 a.m. at Rooms 325-326, Level 3, Suntec Singapore International Convention & Exhibition Centre, 1 Raffles Boulevard, Suntec City, Singapore 039593, for the purpose of considering and, if thought fit, passing with or without modification, the resolutions set out in the Notice of EGM, which is set out on page I-1 of this Circular

Existing Portfolio : The existing property portfolio of PCRT comprising the Properties as set out in the Prospectus

Existing Units : The Units in issue as at the Latest Practicable Date

Extraordinary Resolution : A resolution proposed and passed as such by a majority being greater than 75.0% of the total number of votes cast for and against such resolution at a meeting of Unitholders convened in accordance with the provisions of the Trust Deed

Final GFA : The final surveyed GFA of Chengdu Longemont Mall upon completion of construction of Chengdu Longemont Mall

Forecast Year 2011 : The period from 9 June 2011 to 31 December 2011, both dates inclusive

Framework Agreement : The framework agreement dated 19 January 2012 entered into between PCRPL, Shanghai Summit, Chengdu Summit, Chengdu Ruifeng, Shanghai Summit Pte. Ltd., PREPL and Ms Tong Yuqian to amend and restate the Original Framework Agreement

GFA : Gross floor area. Save in the case of references to “GFA” in the Framework Agreement which refer to the total amount of the area of the Property calculated in accordance with the local regulations applicable to the relevant Property, all references to “GFA” are to the areas based on architectural plans.

GRA : Gross retail area, being the gross floor area excluding the area for carpark space.

56 Hong Kong SPV : A special purpose company incorporated under the laws of Hong Kong

IFA : Deloitte & Touche Corporate Finance Pte Ltd

Independent Directors : The independent directors of the Trustee-Manager

Independent Financial : The letter from the IFA to the Independent Directors and Audit Adviser’s Letter and Risk Committee of the Trustee-manager containing its advice as set out in Appendix B of this Circular

Independent Property : Urbis Pty Ltd Consultant

Latest Practicable Date : 13 January 2012, being the latest practicable date prior to the printing of this Circular

Listed : In relation to the Units or PCRT, means being listed, quoted and traded on the SGX-ST and/or any other Recognised Stock Exchange(s) and not having been suspended from such listing, quotation or trading for more than 60 consecutive calendar days or having not been de-listed permanently

Listing Manual : The Listing Manual of the SGX-ST

Market Day : Any day (other than a Saturday, Sunday or gazetted public holiday) on which commercial banks are open in business in Singapore and the SGX-ST is open for trading

Market Price : Defined in the Trust Deed to mean:

(i) the volume weighted average price for a Unit (if applicable, of the same Class) for all trades on the SGX-ST, or such other Recognised Stock Exchange on which PCRT is Listed, in the ordinary course of trading on the SGX-ST or, as the case may be, such other Recognised Stock Exchange, for the period of 10 Business Days (or such other period as may be prescribed by the SGX-ST or relevant Recognised Stock Exchange) immediately preceding the relevant Business Day; or

(ii) if the Trustee-Manager believes that the calculation in Clause 6.3.1(i) of the Trust Deed does not provide a fair reflection of the market price of a Unit, an amount as determined by the Trustee-Manager (after consultation with a Stockbroker approved by the Trustee-Manager), as being the fair market price of a Unit and this will be announced on the SGXNET for so long as PCRT is Listed on the SGX-ST.

MAS : Monetary Authority of Singapore

MTN Programme : The S$500,000,000 Multicurrency Medium Term Note Programme established by the Trustee-Manager on 20 January 2012

NAV : Net asset value

New Earn-Out : The New Earn-Out amount of up to RMB226.5 million arising from the New Earn-Out Deed

57 New Earn-out Deed : The New Earn-Out negotiated by the Trustee-Manager with the Summit Group to further strengthen the Trustee-Manager’s capacity to deliver the total distribution amount in respect of Forecast Year 2011 and Projection Year 2012 as disclosed in the Prospectus and to also strengthen the cash flows for distribution to Unitholders in the first half of 2013

New Loan Facility : A new onshore debt facility secured on the shares of the subsidiaries of PCRT which own directly or indirectly the Chengdu Longemont Mall Interest

NTA : Net tangible assets

Ordinary Resolution : A resolution proposed and passed as such by a majority being greater than 50.0% of the total number of votes cast for and against such resolution at a meeting of Unitholders convened in accordance with the provisions of the Trust Deed

Original Framework : The master framework agreement dated 3 November 2011 Agreement entered into between PCRPL, Chengdu Summit, Chengdu Ruifeng and Shanghai Summit Pte. Ltd. for the Acquisition of the Chengdu Longemont Mall Interest

PCRPL : Perennial China Retail Pte. Ltd.

PCRT : Perennial China Retail Trust

PCRT Unaudited : Unaudited financial statements of PCRT for the period from Financial Statements 9 June 2011 to 30 September 2011

PREPL : Perennial Real Estate Pte. Ltd.

Pre-Sale Agreement : Has the meaning ascribed to it in the Trust Deed

Property Management : The property management agreement entered into between the Agreement Trustee-Manager and a joint venture management company to be established between PREPL or its wholly-owned subsidiary and a member of the Summit Group

Projection Year 2012 : The period from 1 January 2012 to 31 December 2012, both dates inclusive

Property Management : The proposed structure of the fees (inclusive of leasing and/or Fee marketing commissions) payable to the Property Manager as described in paragraph 2.4 of this Circular

Property Manager : A joint venture management company to be established between PREPL or its wholly-owned subsidiary and a member of the Summit Group

Prospectus : Prospectus of PCRT issued by the Trustee-Manager dated 27 May 2011

Public Float : Refers to the percentage of Units held by the public

58 Purchase Consideration : The aggregate purchase consideration of approximately RMB2.28 billion (or approximately S$464.0 million). If Chengdu Ruifeng is able to obtain a debt facility secured by, inter alia,a mortgage over the Chengdu Longemont Mall to partly fund the construction costs, the cash outlay of PCRT will be reduced by 50.0% of the loan proceeds under such debt facility.

Recognised Stock : Means any stock exchange of repute in any country in any part of Exchange the world.

Refundable Deposit : A refundable deposit, of which PCRT’s 50.0% interest amounts to RMB113.8 million, being equivalent to 5.0% of the Purchase Consideration (equivalent to the sum of RMB227.6 million) payable by Shenyang Summit on behalf of PCRT and the Summit Group to Shanghai Summit

SGX-ST : Singapore Exchange Securities Trading Limited

Shanghai Summit : Shanghai Summit Real Estate Development Co., Ltd.

Shanghai Summit : Shanghai Summit (Group) Co., Ltd (Group)

SPV : Special purpose vehicle

Sqm : square metre

Stockbroker : A member of the SGX-ST or any other Recognised Stock Exchange

Substantial Unitholders : Unitholders with an interest in not less than 5.0% of all Units in issue

Summit Entities : Mr Tong Jinquan, Shanghai Summit, Chengdu Summit, Chengdu Ruifeng and Shanghai Summit Pte. Ltd.

Total Acquisition Cost : The Total Acquisition Cost is currently estimated to be approximately S$477.3 million, comprising:

(a) the Purchase Consideration of RMB2.28 billion (S$464.0 million);

(b) the Acquisition Fee of approximately S$6.3 million (being 1.35% of the Purchase Consideration) payable to the Trustee-Manager pursuant to the Trust Deed, which will be paid in Units at the election of the Trustee-Manager. The Acquisition Fee Units shall be payable to the Trustee- Manager upon the satisfaction of both the following conditions (i) the completion of the acquisition by PCRPL of the BVI SPV and (ii) the obtaining of the four permits by Chengdu Ruifeng and the amount of the Acquisition Fee will be based on the Purchase Consideration computed based on the GFA as set out in the Construction Planning Certificate and assuming that PCRT acquires a 50.0% interest in Chengdu Longemont Mall Development. Should PCRT exercise the option to increase its stake in Chengdu

59 Longemont Mall Development, an additional amount of Acquisition Fee will be payable upon such exercise. The Acquisition Fee Units are expected to be issued in the first half of 2012 after the satisfaction of the abovementioned two conditions. Although all Acquisition Fee Units once issued will be entitled to the distributions payable after their date of issuance, the Acquisition Fee Units will not be entitled to any distributions in respect of the distribution period from 1 January 2012 to 31 December 2012; and

(c) the estimated professional and other fees and expenses incurred or to be incurred by PCRT in connection with the Acquisition of approximately S$7.0 million (inclusive of the professionals’ fees and expenses incurred or to be incurred for the amendments to the Credit Facilities Agreement to fund part of the first 15.0% of the Purchase Consideration of approximately S$2.1 million, the upfront fees under the Credit Facilities Agreement of approximately S$4.3 million and miscellaneous expenses incurred in connection with the Acquisition of approximately S$0.6 million) which will be borne by PCRT

Summit Group : Shanghai Summit (Group) and its subsidiaries

Transactional GFA : The GFA approved by the authority in the construction project planning permit

Trust Asset : Any one of the assets forming for the time being a part of the Trust Property or, where the context requires, being considered to be acquired or otherwise included as part of the Trust Property, regardless whether such asset finally forms part of the Trust Property

Trust Deed : The trust deed dated 22 February 2011, constituting PCRT, as amended

Trust Deed Supplement : The proposed supplements to the Trust Deed in relation to the form of payment of the Management Fees or, as the case may be, in relation to Acquisition Fees

Trustee-Manager : Perennial China Retail Trust Management Pte. Ltd.

Trust Property : Has the meaning ascribed to it in the Business Trusts Act

Underlying Land : The underlying land in respect of the Chengdu Longemont Mall

Unit : A unit representing an undivided interest in PCRT

Unitholders : Unitholders of PCRT

VWAP : Volume weighted average price

S$ and cents : Singapore dollars and cents

% : Per centum or percentage

60 The terms “Depositor” and “Depository Register” shall have the meanings ascribed to them respectively in Section 130A of the Companies Act, Chapter 50 of Singapore.

Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders. References to persons shall include corporations.

Any reference in this Circular to any enactment is a reference to that enactment for the time being amended or re-enacted.

Any reference to a time of day in this Circular shall be a reference to Singapore time unless otherwise stated.

Any discrepancies in the tables, graphs and charts between the listed amounts and totals thereof are due to rounding. Where applicable, figures and percentages are rounded to one decimal place.

61 This page has been intentionally left blank. APPENDIX A

DETAILS OF THE CHENGDU LONGEMONT MALL AND THE EXISTING PORTFOLIO

Chengdu Longemont Mall

Note: * The picture on this page is an artist’s impression of Chengdu Longemont Mall and may differ from the actual view of the completed Chengdu Longemont Mall.

The Chengdu Longemont Mall, which is expected to measure approximately 455,2601 sqm in GFA (of which approximately 364,650 sqm2 is expected to be retail GFA and 90,610 sqm is expected to be carpark space) is part of the 1.7 million sqm2 Chengdu Longemont mixed-use development, and is sited in Chenghua District within the Third Ring Road of South-East Chengdu, Sichuan Province, China. The Chengdu Longemont Mall will be strategically located adjacent to and directly-connected via its basement level to the operational Chengdu East HSR Station, a newly-built major transportation hub with 27 train platforms comprising the inter-city high-speed railway, Chengdu’s intra-city subway (expected to serve Lines 2 and 7), long and short distance bus routes and taxi connections. An area spanning approximately 12 square kilometres surrounding the Chengdu East HSR Station has been designated as Chengdu’s new CBD3 and is increasingly being built-up with many residential apartments, commercial offices and business centres.

A-1 The Chengdu Longemont Mall is one part of the Chengdu Longemont mixed-use development that the Summit Group is developing on four plots of prime land surrounding and adjacent to the Chengdu East HSR Station. Amongst the four land plots, the land plot on which the Chengdu Longemont Mall will be sited is considered by the Trustee-Manager to be the most prime in terms of connectivity, as it is strategically located at the intersection of two of Chengdu’s intra-city subway lines (expected to serve Lines 2 and 7) and has immediate access to the mixed-use development’s local bus interchange as well as the taxi stand. The Summit Group is expected to develop office towers, a convention centre, a hotel and a wholesale centre on the remaining three plots of land1.

The Chengdu Longemont Mall will offer a myriad of retail and entertainment choices targeted at middle-income shoppers, including a supermarket, an amusement park, local and international fashion, food and beverage brands and other retailers. Construction of the Chengdu Longemont Mall will commence when the fourth permit being the construction permit is received in the first quarter of 2012. The excavation works on Chengdu Longemont Mall commenced in December 2011. The Chengdu Longemont Mall is expected to commence operations in the third quarter of 2014.

The State-owned Land Use Right Certificate in respect of the Chengdu Longemont Mall will be held in the name of Chengdu Ruifeng which will confer on Chengdu Ruifeng the right to use the Underlying Land.

Although Chengdu Ruifeng has not obtained the four permits2 from the PRC governmental authorities, being the land use right certificate (土地使用證), the construction land planning permit (建設用地規劃許可證), the construction project planning permit (建設工程規劃許可證) and the construction permit (建築工程施工許可證), the Chengdu land and Resources Bureau has confirmed in writing that the land use right in respect of the Underlying Land can be granted to Chengdu Ruifeng. Chengdu Ruifeng has submitted the relevant documents for the purposes of obtaining the land use right certificate to the Chengdu Land and Resources Bureau, which has accepted the documents. Chengdu Ruifeng is expected to receive the four permits in the first quarter of 2012 when construction of the mall will commence.

Existing Portfolio

1. Shenyang Red Star Macalline Furniture Mall（紅星美凱龍全球家居生活 Mall龍之夢店）

1 Based on information provided by the Summit Group. 2 Refers to the four approvals from the PRC governmental authorities, being (i) the land use right certificate (土地使用證), (ii) the construction land planning permit (建設用地規劃許可證), (iii) the construction project planning permit (建設工程規劃許可證) and (iv) the construction permit (建築工程施工許可證), which are expected to be received in the first quarter of 2012.

A-2 Shenyang Red Star Macalline Furniture Mall is a nine-level furniture mall comprising seven retail levels above ground, one retail level below ground and a basement car park housing 1,065 lots. The mall commenced operations on 30 September 2010 and is a major component within Shenyang Longemont Asia Pacific City.

With GFA of approximately 276,474 sqm1, Shenyang Red Star Macalline Furniture Mall currently boasts approximately 750 stores spread across the Basement 1 to Level 6 of the mall. Each retail level is further segregated into distinct zones specialising in a variety of thematic furniture home furnishings, fittings and fixtures, making Shenyang Red Star Macalline Furniture Mall a complete one-stop furniture centre for all home needs. Level 7 has been set aside for second phase of leasing, which is typically carried out after the rest of the mall is actively trading. With available sales and traffic data, the property manager will have improved bargaining power in fetching a higher rental. Active trade-mix planning and asset enhancement will be carried out to enhance the space usage.

The table below sets out a summary of selected information on Shenyang Red Star Macalline Furniture Mall.

Property(1) Shenyang Red Star Macalline Furniture Mall Completion of development Completed and commenced operations Commencement of Operations 30 September 2010 Expiry of Land Use Rights 50 years, expiring 20 January 2059 and 40 years, expiring 20 January 2049 for the commercial component Occupancy Rate as at September 2011 76.9% Land Area (sqm) 44,845.4 GFA (sqm)(2) 276,474 NLA (sqm)(2) 181,595 Car Park Lots(2) 1,065 car park lots and 41 heavy vehicle lots Valuation as at 31 December 2010 1,452.0 (RMB million)(3) Purchase Price (RMB million)(4) 1,284.6(5)

Notes: (1) Save for the valuation and the purchase price which are reflected on the basis of PCRT’s 50.0% stake, all information set out in this table assumes 100.0% of Shenyang Red Star Macalline Furniture Mall. (2) The relevant GFA, NLA and information on the car park lots are based on architectural plans prepared by the relevant architects and on which construction was based for the completed buildings and the properties under development. These areas may differ from the actual GFA, NLA and information on the car park lots of the relevant completed Properties. The GFA and information on the car park lots will be finalised when the relevant Building Ownership Certificate is issued. (3) The basis of the valuation of Shenyang Red Star Macalline Furniture Mall is on an “as is condition” (see Appendix E, “Independent Property Valuation Summary Report” of the Prospectus). (4) Shenyang Red Star Macalline Furniture Mall is acquired on a “completed” basis and the total purchase price set out in the relevant framework agreement is the “all-in” costs paid to the respective vendors and comprises the agreed land values and all construction and construction-related costs. (5) The total purchase price of the Shenyang Properties is computed based on the aggregate GFA of the Shenyang Properties, in accordance with the terms of the Shenyang Summit Co-operative Framework Agreement. The relevant GFA is based on architectural plans prepared by the relevant architects and, in the case of the completed buildings, on which construction was based. This GFA may differ from the actual GFA of the relevant completed Properties. The GFA will be finalised when the relevant Building Ownership Certificate is issued.

1 Based on architectural plans prepared by the relevant architects and may differ from the actual GFA of the completed property.

A-3 2. Shenyang Longemont — Shenyang Longemont Shopping Mall and Shenyang Longemont Offices (瀋陽龍之夢—瀋陽龍之夢購物中心與瀋陽龍之夢寫字樓)

Shenyang Longemont will comprise Shenyang Longemont Shopping Mall and Shenyang Longemont Offices and will be one of the focal points within Shenyang Longemont Asia Pacific City.

Shenyang Longemont Shopping Mall

Shenyang Longemont Shopping Mall is a 10-level shopping mall which commenced operations on 1 October 2011. With an expected GFA of approximately 327,789 sq m1, the mall is one of the largest integrated shopping malls in Shenyang and a key component of Shenyang Longemont Asia Pacific City.

Shenyang Longemont Shopping Mall provides an array of retail and entertainment choices, which include a large-scale indoor rooftop theme park of expected NLA of approximately 25,255 sqm, an indoor ice skating rink of expected NLA of approximately 2,907 sqm, a supermarket of expected NLA of approximately 19,735 sqm and one of the largest food plazas in Shenyang of expected NLA of approximately 2,200 sqm. The Summit Group has leased the space for the indoor rooftop theme park, the indoor ice skating rink, the supermarket and some food and beverage outlets located on level seven of the mall.

Shenyang Longemont Shopping Mall is positioned as a one-stop mall with a diverse base of approximately 800 tenants, when fully leased. Each of the 10 levels is themed and includes a central core of retailers operating in a manner similar to that of a department store with a central cashiering system. These quasi-department stores are surrounded by regular retail specialty shops.

1 Based on architectural plans prepared by the relevant architects and may differ from the actual GFA of the completed property. (receipt of the building ownership cert).

A-4 The Trustee-Manager believes that Shenyang Longemont Shopping Mall will provide a holistic shopping experience to shoppers and their families as a significant amount of space within the mall is dedicated towards purposes other than retail, such as leisure and entertainment purposes, distinguishing the mall from, and providing a competitive advantage over, other competing malls. The strong public transport access to the mall results in it being a focal point for local and regional residents as well as tourists visiting Shenyang.

The table below sets out a summary of selected information on Shenyang Longemont Shopping Mall:

Property(1) Shenyang Longemont Shopping Mall Completion of development Completed and commenced operations Commencement of Operations 1 October 2011 Expiry of Land Use Rights 50 years, expiring 20 January 2059 and 40 years, expiring 20 January 2049 for the commercial component Occupancy Rate as at September 2011 (based on 70.0% Committed Leases) Land Area (sqm)(2) 53,328.2 GFA (sqm)(3) 327,789 NLA (sqm)(3) 209,292 Valuation as at 31 December 2010 (RMB million)(4) 1,725.0 Purchase Price (RMB million)(5) 1,523.0(6)

Notes: (1) Save for the valuation and the purchase price which are reflected on the basis of PCRT’s 50.0% stake, all information set out in this table assumes 100.0% of Shenyang Longemont Shopping Mall. (2) Includes both Shenyang Longemont Shopping Mall and Shenyang Longemont Offices as they share the same land title. This also includes part of a transportation hub adjacent to Shenyang Longemont Shopping Mall covering an area of 27,000 sqm (of which 12,000 sqm is within the land area of Shenyang Longemont Shopping Mall) although this transportation hub is not owned by PCRT. (3) The relevant GFA and NLA are based on architectural plans prepared by the relevant architects and on which construction was based for the completed buildings and the properties under development. These areas may differ from the actual GFA and NLA of the relevant completed Properties. The GFA and NLA will be finalised when the relevant Building Ownership Certificate is issued. (4) The basis of the valuation of Shenyang Longemont Shopping Mall is on an “as if complete and fully leased” based on current market conditions (see Appendix E, “Independent Property Valuation Summary Report” of the Prospectus). (5) Shenyang Longemont Shopping Mall is acquired on a “completed” basis and the total purchase price set out in the relevant framework agreement is the “all-in” costs paid to the respective vendors and comprises the agreed land values and all construction and construction-related costs. (6) The total purchase price of the Shenyang Properties is computed based on the aggregate GFA of the Shenyang Properties, in accordance with the terms of the Shenyang Summit Co-operative Framework Agreement. The relevant GFA is based on architectural plans prepared by the relevant architects and, in the case of the completed buildings, on which construction was based. This GFA may differ from the actual GFA of the relevant completed Properties. The GFA will be finalised when the relevant Building Ownership Certificate is issued.

A-5 Tenant Profile of Shenyang Longemont Shopping Mall

As at September 2011, based on Committed Leases, Shenyang Longemont Shopping Mall has 517 tenants and 70.0% of the total NLA has been committed, with 30.7% of the total NLA committed by entities within the Summit Group. Based on the leasing plans of Chengdu Longemont Shopping Mall, the indicative trade sector analysis of Chengdu Longemont Shopping Mall is as follows:

Shenyang Longemont Shopping Mall Trade Categories (by area)

2.5% 1.6% 3.0% 3.0% Leisure and Entertainment 5.0% 29.0% F & B / Foodcourt

6.5% Supermarket / Hypermarket Fashion & related Sports & Fitness / Health

Home Furnishings / IT 15.6% Children

Education / School

Specialty / Others 18.0% Services

15.8%

Shenyang Longemont Offices

Shenyang Longemont Offices comprise two quality 56-level office towers under development and are expected to commence operations in the fourth quarter of 2012. As of November 2011, both towers have topped-out. The two office towers will have a combined expected GFA of 197,803 sqm1 and will be directly linked to Shenyang Longemont Shopping Mall.

Shenyang Longemont Offices offer the following benefits to its office tenants:

• Connectivity

Direct access to the transportation hub (through Shenyang Longemont Shopping Mall) that is directly serviced by two metro lines (Line 1 has commenced operations since October 2010 and Line 10 is expected to be operational in 2013) and a transit hub designed to support 56 bus lines which run both inter-city and intra-city.

• Quality asset in the east of the Shenyang commercial hub

The quality offices in Shenyang are mostly located in the Golden Corridor, while the Shenyang Longemont Offices are strategically located east of the Shenyang commercial hub where there is less competition for such offices.

1 Based on architectural plans prepared by the relevant architects and may differ from the actual GFA of the completed property.

A-6 • Complementary co-usage of Shenyang Longemont Asia Pacific City

Shenyang Longemont Offices is expected to be well complemented by other future development such as the hotels and retail developments within the Shenyang Longemont Asia Pacific City.

In addition, the municipal government has plans to make Shenyang the financial centre of northeastern China and has been promoting the development of office space in anticipation of future demand arising from the successful implementation of its financial centre development plans.

The table below sets out a summary of selected information on Shenyang Longemont Offices:

Property(1) Shenyang Longemont Offices Completion of development Construction expected to be completed in the second quarter of 2012 Commencement of Operations Expected to be fourth quarter of 2012 Expiry of Land Use Rights 50 years, expiring 20 January 2059; and 40 years, expiring 20 January 2049 for the commercial component Land Area (sqm)(2) 53,328.2 GFA (sqm)(3) 197,803 NLA (sqm)(3) 177,590 Valuation as at 31 December 2010 (RMB million)(4) 1,077.0 Purchase Price (RMB million)(5) 919.0(6)

Notes: (1) Save for the valuation and the purchase price which are reflected on the basis of PCRT’s 50.0% stake, all information set out in this table assumes 100.0% of Shenyang Longemont Offices. (2) Includes both Shenyang Longemont Shopping Mall and Shenyang Longemont Offices as they share the same land title. This also includes part of a transportation hub adjacent to Shenyang Longemont Shopping Mall covering an area of 27,000 sqm (of which 12,000 sqm is within the land area of Shenyang Longemont Shopping Mall) although this transportation hub is not owned by PCRT. (3) The relevant GFA and NLA are based on architectural plans prepared by the relevant architects and on which construction was based for the completed buildings and the properties under development. These areas may differ from the actual GFA and NLA of the relevant completed Properties. The GFA and NLA will be finalised when the relevant Building Ownership Certificate is issued. (4) The basis of the valuation of Shenyang Longemont Offices, is on an “as if complete and fully leased” based on current market conditions (See Appendix E, “Independent Property Valuation Summary Report” of the Prospectus). (5) Shenyang Longemont Offices is acquired on a “completed” basis and the total purchase price set out in the relevant framework agreement is the “all-in” costs paid to the respective vendors and comprises the agreed land values and all construction and construction-related costs. (6) The total purchase price of the Shenyang Properties is computed based on the aggregate GFA of the Shenyang Properties, in accordance with the terms of the Shenyang Summit Co-operative Framework Agreement. The relevant GFA is based on architectural plans prepared by the relevant architects and, in the case of the completed buildings, on which construction was based. This GFA may differ from the actual GFA of the relevant completed Properties. The GFA will be finalised when the relevant Building Ownership Certificate is issued.

A-7 3. Foshan Yicui Shijia Shopping Mall

Note: * The picture on this page is an artist’s impression of Foshan Yicui Shijia Shopping Mall and may differ from the actual view of the completed Foshan Yicui Shijia Shopping Mall.

Foshan Yicui Shijia Shopping Mall（佛山怡翠世嘉商場）is a development project which will be part of an integrated development in Foshan city by Nanhai Nenking (Holdings) Group Co., Ltd. (南海能興（控股）集團有限公司). The mall is expected to comprise GFA of approximately 68,833 sqm1. The integrated development which spans a land area of approximately 92,890 sq m will have total GFA of approximately 383,815 sqm and will comprise Foshan Yicui Shijia Shopping Mall, 16 high-rise residential towers of which all but two are at least 32 levels tall, a three-level kindergarten, underground car parks and amenities. The development will be completed in four phases, with the shopping mall to be built in the final phase. Once the first three phases are complete, all 16 high-rise residential towers will be complete, providing a ready shopper catchment when the shopping mall opens in the first quarter of 2013.

The mall will comprise two basement levels and three levels above ground, with the retail levels spanning basement one to level three and the car parks on basement two. There will be approximately 600 basement car park lots and 230 surface car park lots. The major tenants include a large supermarket, a cineplex, retail shops and approximately 200 specialty shops. The mall will offer retail, food and beverage, services and entertainment to cater to the needs of the residents in the vicinity.

The Pre-Sale Permit of the mall was received by the Nenking Group in October 2011, two quarters earlier than previously expected and disclosed in the Prospectus.

1 Based on architectural plans prepared by the relevant architects and may differ from the actual GFA of the completed property.

A-8 The table below sets out a summary of selected information on Foshan Yicui Shijia Shopping Mall:

Property Foshan Yicui Shijia Shopping Mall Completion of development Pre-sale Agreement expected to be entered into in the first quarter of 2012 Construction expected to be completed in the third quarter of 2012 Commencement of Operations Expected to be first quarter of 2013 Expiry of Land Use Rights 40 years, expiring 20 May 2049 Land Area (sqm) 34,412 GFA (sqm)(1) 68,833 NLA (sqm)(1) 47,410 Car Park Lots(1) 600 in the basement, 230 above ground Valuation as at 31 December 2010 (RMB million)(2) 795.0 Purchase Price (RMB million)(3) 586.5

Notes: (1) The relevant GFA, NLA and information on the car park lots are based on architectural plans prepared by the relevant architects and on which construction was based for the properties under development. These areas may differ from the actual GFA, NLA and information on the car park lots of the relevant completed Properties. The GFA and information on the car park lots will be finalised when the relevant Building Ownership Certificate is issued. (2) The basis of the valuation of Foshan Yicui Shijia Shopping Mall is on a “as if complete and fully leased” based on current market conditions (See Appendix E, “Independent Property Valuation Summary Report” of the Prospectus). (3) Foshan Yicui Shijia Shopping Mall is acquired on an “completed” basis and the total purchase price set out in the relevant framework agreement is the “all-in” costs paid to the respective vendors and comprises the agreed land values and all construction and construction-related costs.

4. Chengdu Qingyang Guanghua Shopping Mall

Note: * The picture on this page is an artist’s impression of Chengdu Qingyang Guanghua Shopping Mall and may differ from the actual view of the completed Chengdu Qingyang Guanghua Shopping Mall.

A-9 Chengdu Qingyang Guanghua Shopping Mall is a development project located in Chengdu with an expected GFA of approximately 90,000 sqm. This will comprise three levels above ground and three basement levels, with the retail levels spanning basement one to level three and the car park on basements two and three with about 800 parking spaces. It will be part of a large mixed development which will include a five-star hotel, an office block and SOHOs.

The mall will have good street frontage and is located in a park-like setting with the five-star hotel, office block and SOHO units located around the periphery. The entire mixed development will have a futuristic appearance and is expected to look distinctive from the other buildings in the vicinity, many of which are dense residential estates. Chengdu Qingyang Guanghua Shopping Mall will be a one-stop shop offering food and beverage, fashion, department store, supermarket, services and entertainment options. The tenants are likely to include a large supermarket on basement one, a cineplex and smaller retail shops on levels one to three, and approximately 280 specialty shops and food and beverage units.

As of December 2011, the first three permits, namely the land use right certificate (土地使用證), construction land planning permit (建設用地規劃許可證) and the construction project planning permit (建設工程規劃許可證), have been received.

The table below sets out a summary of selected information on Chengdu Qingyang Guanghua Shopping Mall.

Chengdu Qingyang Guanghua Shopping Property Mall Completion of development Real Estate Project Transfer Agreement is expected to be entered into in the second quarter of 2012 Construction expected to be completed in the fourth quarter of 2013 Commencement of Operations Expected to be the second quarter of 2014 Expiry of Land Use Rights 40 years, expiring 19 January 2050 Land Area (sqm) 52,823.0 GFA (sqm)(1) 90,000 NLA (sqm)(1) 58,500 Car Park Lots(1) 800 Valuation as at 31 December 2010 (RMB million)(2) 849.0 Total Project Costs (RMB million)(3) 657.0

Notes: (1) The relevant GFA, NLA and information on the car park lots are based on architectural plans prepared by the relevant architects, and on which construction was based for the properties under development. These areas may differ from the actual GFA, NLA and information on the car park lots of the relevant completed Properties. The GFA and information on the car park lots will be finalised when the relevant Building Ownership Certificate is issued. (2) The basis of the valuation of Chengdu Qingyang Guanghua Shopping Mall is on an “as if complete and fully leased” based on current market conditions (See Appendix E, “Independent Property Valuation Summary Report” of the Prospectus). (3) Chengdu Qingyang Guanghua Shopping Mall will be acquired on a “work-in-progress” basis and the total project costs comprise the agreed land value and all estimated construction and construction-related costs but exclude the development management fees payable to Perennial (Shanghai) Retail Management Co., Ltd in its capacity as the Perennial Development and Property Manager.

A-10 APPENDIX B

INDEPENDENT FINANCIAL ADVISER’S LETTER

DELOITTE & TOUCHE CORPORATE FINANCE PTE LTD (Incorporated in the Republic of Singapore) Company Registration Number: 200200144N)

20 January 2012

The Independent Directors and Audit and Risk Committee Perennial China Retail Trust Management Pte. Ltd. (as Trustee-Manager of Perennial China Retail Trust) 6 Temasek Boulevard #25-04/05 Suntec Tower Four Singapore 038986

Dear Sirs

(1) THE PROPOSED ACQUISITION OF A 50.0% INTEREST IN CHENGDU LONGEMONT SHOPPING MALL DEVELOPMENT FROM AN INTERESTED PERSON;

(2) THE PROPOSED TRUST DEED SUPPLEMENT IN RELATION TO THE FORM OF PAYMENT OF MANAGEMENT FEES.

For the purpose of this letter, capitalised terms not otherwise defined shall have the meaning given to them in the circular dated 20 January 2012 to the unitholders of Perennial China Retail Trust (the “Circular”)

1. INTRODUCTION

Perennial China Retail Trust (“PCRT”) is Singapore’s first pure-play, Peoples’ Republic of China retail development trust listed on the Mainboard of the Singapore Stock Exchange Securities Trading Limited (“SGX-ST”). It has been established with the objective of providing the Unitholders with long-term capital growth from the steady growth of PCRT’s net asset value per unit and regular distributions from stabilised income-producing assets.

The Acquisition

On 3 November 2011, Perennial China Retail Pte. Ltd. (“PCRPL”), a wholly-owned subsidiary of PCRT, Mr Tong Jinquan, Shanghai Summit, Chengdu Summit, Chengdu Ruifeng and Shanghai Summit Pte. Ltd entered into the Framework Agreement which will ultimately lead to PCRPL acquiring (the “Acquisition”) an interest of 50.0% (with the flexibility to increase the interest to 80.0%) (the “Chengdu Longemont Mall Interest”) in Chengdu Longemont Shopping Mall Development (the “Chengdu Longemont Mall”orthe“Property”).

Under the terms of the Framework Agreement and the Option Agreement, based on a completed GFA of 455,260 sqm, PCPRL will acquire a 50.0% interest in Chengdu Longemont Mall at an aggregate purchase consideration of approximately RMB2.28 billion (S$464.0 million) (the “Purchase Consideration”). The Purchase Consideration was arrived on a willing-buyer and willing-seller basis after taking into account the market valuation of the Chengdu Longemont Mall.

B-1 If the GFA of the Property is determined to be less than 95.0%1 of 455,260 sqm (which shall be no later than the time that Chengdu Ruifeng obtains the four permits2), based on the Transactional GFA, PCRPL shall have the flexibility to acquire a higher percentage interest (up to 80.0%) in Chengdu Longemont Mall at RMB10,000 per sqm subject always to PCRPL paying a maximum Purchase Consideration of RMB2.28 billion (S$464.0 million) for its aggregate interest in Chengdu Longemont Mall. PCRPL may increase its stake in Chengdu Longemont Mall at its option and at any time within one year from the later of (i) the date that PCRPL completes its acquisition of the BVI SPV and (ii) the date that Chengdu Ruifeng obtains the four permits. For the avoidance of doubt, if the Transactional GFA is less than 455,260 sqm but more than 95.0% of 455,260 sqm, PCRPL will not have the option of increasing its stake in Chengdu Longemont Mall and in such an instance, the Purchase Consideration payable will be adjusted based on the Transactional GFA.

As at the Latest Practicable Date, Mr Tong Jinquan, who wholly owns Shanghai Summit Pte. Ltd., which holds 167,142,000 Units (comprising 14.9% of the Existing Units), is deemed to be interested in 167,142,000 Units. As stated in the Prospectus, for purposes of good corporate governance, the Trustee-Manager has volunteered that from the Listing Date, for so long as Mr Tong Jinquan and his associates own 5.0% or more of the aggregate number of Units in issue, Mr Tong and his associates shall be deemed as an “interested person” under the Listing Manual. As Mr Tong Jinquan and his associates own 14.9% of the Existing Units, the Acquisition pursuant to the entry into by PCRPL of the Framework Agreement is regarded as an “interested person transaction” under Chapter 9 of the Listing Manual.

Under Chapter 9 of the Listing Manual, where PCRT proposes to enter into an interested person transaction the value of which (either in itself or when aggregated with the value of other transactions, each of a value equal to or greater than S$100,000, with the same interested person during the same financial year) is equal to or exceeds 5.0% of PCRT’s latest audited NTA, the approval of the Unitholders is required in respect of the transaction. As the Purchase Consideration of approximately RMB 2.28 billion (which is 61.9% of the NTA of PCRT as at 30 September 2011) exceeds the said threshold, the Acquisition is subject to the approval of the Unitholders.

The Property Management Agreement

Property management services in relation to the Chengdu Longemont Mall will be carried out under the terms of the property management agreement (the “Property Management Agreement”) by a joint venture management company (the “Chengdu Longemont Mall Property Manager”) formed for the purpose, which shall be at least 51.0% owned by PREPL or its wholly-owned subsidiary and 49.0% owned by a member of the Summit Group (both individually being a “controlling Unitholder” and a “controlling shareholders” of the Trustee-Manager). PREPL’s stake in the Chengdu Longemont Mall Property Manager may increase to 80.0% depending on the level of PCRT’s Chengdu Longemont Mall Interest. Accordingly, the Summit Group’s stake in the Chengdu Longemont Mall Property Manager will be between 20.0% and 49.0%. As such, the Property Management Agreement will be regarded as an “interested person transaction” under Chapter 9 of the Listing Manual and the entering into of the Property Management Agreement requires the approval of the Unitholders. This approval forms part of Resolution 1 to be voted on by the Unitholders. By approving the Acquisition, the Unitholders will be deemed to have also approved the Property Management Agreement.

1 The 95.0% threshold was arrived at based on a willing-buyer and willing-seller basis as a meaningful deviation from the estimated GFA of the building. 2 Refers to the four approvals from the PRC governmental authorities, being (i) the land use right certificate, (ii) the construction land planning permit, (iii) the construction project planning permit and (iv) the construction permit, which are expected to be received in the first quarter of 2012.

B-2 The Proposed Management Fees Supplement

The Trustee-Manager is seeking Unitholders’ approval under Clause 25.2 of the Trust Deed (which relates to the requirement to obtain the approval of Unitholders to modify the Trust Deed) to supplement the Trust Deed with the Trust Deed Supplement in relation to the form of payment of Management Fees for the purposes of allowing the Trustee-Manager to elect to receive its management fees in either cash or Units even when the issue price (which is equal to the Market Price) of each Unit is below the NAV per Unit at such point where the management fees are payable to the Trustee-Manager (the “Proposed Management Fees Supplement”). This approval forms Resolution 2 to be voted on by the Unitholders.

2. TERMS OF REFERENCE

We have been appointed as the independent financial adviser to the Independent Directors and the Audit and Risk Committee of the Trustee-Manager in respect of whether the Acquisition, the Property Management Agreement and the Proposed Management Fee Supplement (collectively the “Proposed Transactions”) are on normal commercial terms and are not prejudicial to the interests of PCRT and its minority Unitholders. This letter, which sets out our evaluation for the Independent Directors and the Audit and Risk Committee in respect of our engagement, is an integral part of the Circular.

We were neither a party to the negotiations entered into in relation to the Proposed Transactions, nor were we involved in the deliberations leading up to the decision on the part of the Board to enter into these transactions or arrangements.

We do not, by this letter or otherwise, advise or form any judgement on the strategic, commercial or financial merits or risks of the Proposed Transactions. All such evaluations, advice, judgements or comments remain the sole responsibility of the Board and their advisors. We have however drawn upon such evaluations, judgements and comments as we deem necessary and appropriate in arriving at our opinion.

The scope of our appointment does not require us to express, and nor do we express, a view on the future growth prospects, earnings potential or value of PCRT. We do not express any view as to the price at which the Units may trade upon completion of the Proposed Transactions nor on the future value, financial performance or condition of PCRT after the Proposed Transactions.

It is also not within our terms of reference to compare the merits of the Proposed Transactions to any alternative transactions that were or may have been available to PCRT. Such comparison and consideration remain the responsibility of the Board, the Trustee-Manager and their advisors.

In the course of our evaluation, we have held discussions with the directors and management of the Trustee-Manager and have considered the information contained in the Circular, publicly available information collated by us as well as information, both written and verbal, provided to us by the those Board members and the management of the Trustee-Manager. We have relied upon and assumed the accuracy of the relevant information, both written and verbal, provided to us by the aforesaid parties and have not independently verified such information, whether written or verbal, and accordingly cannot and do not warrant, and do not accept any responsibility for the accuracy, completeness and adequacy of such information. We have not independently verified and have assumed that all statements of fact, belief, opinion and intention made by the Board in the Circular have been reasonably made after due and careful enquiry. Accordingly, no representation or warranty (whether express or implied) is made and no responsibility is accepted by us concerning the accuracy, completeness or adequacy of such

B-3 information. We have nonetheless made reasonable enquiries and exercised our judgement on the reasonable use of such information and have found no reason to doubt the accuracy or reliability of such information.

We have not made any independent evaluation or appraisal of the assets and liabilities (including, without limitation, the real properties) of PCRT or the Property. We have been furnished with the valuation reports for the Property prepared by CBRE and by Colliers, the independent valuers commissioned by the Trustee-Manager (collectively, the “Independent Valuers”). With respect to such reports, we are not experts and do not hold ourselves to be experts in the evaluation of the Property and have relied solely upon such reports.

Our views are based on market, economic, industry, monetary and other conditions (where applicable) prevailing on and our analysis of the information made available to us as at the Latest Practicable Date. We assume no responsibility to update, revise or reaffirm our opinion, factors or assumptions in light of any subsequent development after the Latest Practicable Date that may affect our opinion or factors or assumptions contained herein. Unitholders should take note of any announcements relevant to their considerations of the Proposed Transactions which may be released by the Trustee-Manager after the Latest Practicable Date.

The Trustee-Manager has been separately advised by its own legal advisor in the preparation of the Circular other than this letter. We have had no role or involvement and have not provided any advice whatsoever in the preparation, review and verification of the Circular other than this letter. Accordingly, we take no responsibility for, and express no views, whether express or implied, on the contents of the Circular except for this letter.

Our opinion in relation to the Proposed Transactions set out in paragraph 7 of this letter and should be considered in the context of the entirety of our advice. While a copy of this letter may be reproduced in the Circular, the Trustee-Manager may not reproduce, disseminate or quote this letter or any part thereof for any purpose, other than for the purpose stated herein, without our prior written consent in each instance.

We have not had regard to the general or specific investment objectives, financial situation, tax position, risk profiles or unique needs and constraints of any Unitholder. As Unitholders will have different investment objectives, we advise the Independent Directors to recommend that any Unitholder who may require specific advice in relation to his or her specific investment objectives or portfolio should consult his or her stockbroker, bank manager, solicitor, accountant, tax advisor or other professional advisors.

3. THE ACQUISITION

3.1. Description of the Property

The Chengdu Longemont Mall, which is expected to measure approximately 455,2601 sqm in GFA (of which, approximately 364,650 sqm is expected to be retail GFA and 90,610 sqm is expected to be carpark space)1 is part of the 1.7 million sqm2 Chengdu Longemont mixed-use development and is sited in Chenghua District within the Third Ring Road of South-East Chengdu, Sichuan Province, China.

1 Based on architectural plans prepared by the relevant architects and may differ from the actual GFA of the completed property. 2 Based on information provided by the Summit Group.

B-4 The Property will be strategically located adjacent to and will be directly-connected via its basement level to the operational Chengdu East HSR Station, a newly-built major transportation hub comprising the inter-city high-speed railway, Chengdu’s intra-city subway (expected to serve Lines 2 and 7), long and short distance bus routes and taxi connections.

An area spanning 12 square kilometres surrounding the Chengdu East HSR Station has been designated as Chengdu’s new CBD1 and is increasingly being built-up with many residential apartments, commercial offices and business centres.

The Property will offer a myriad of retail and entertainment choices targeted at middle-income shoppers including a supermarket, an amusement park, local and international fashion, food and beverage brands and retailers. The Chengdu Longemont Mall is expected to commence operations in the third quarter of 2014.

3.2. Details of the Acquisition

Pursuant to the Framework Agreement entered into by PCRPL, a wholly-owned subsidiary of PCRT, Mr Tong Jinquan, Shanghai Summit, Chengdu Summit, Chengdu Ruifeng and Shanghai Summit Pte. Ltd., PCRPL will acquire the Chengdu Longemont Mall Interest at the Purchase Consideration of approximately RMB2.28 billion (S$464.0 million).

The Chengdu Longemont Mall Interest Option provides, inter alia, that the quality of the commercial components of the Chengdu Longemont Mall is to be comparable to Shenyang Longemont Shopping Mall2 and all planning, design, organisation, tenant mix and leasing of the commercial component of the Chengdu Longemont Mall has to be agreed to by PREPL and PCRPL. Under the Chengdu Longemont Mall Interest Option, it is contemplated that 5.0% of the Purchase Consideration (or approximately RMB113.8 million) be paid to the Shanghai Summit upon entry into of a transfer agreement. To give effect to this Shenyang Summit had on 17 November 2011, on behalf of PCRT and the Summit Group, paid to Shanghai Summit a refundable deposit of RMB194.0 million, which amounts to 4.3% of the Purchase Consideration. The remaining 0.7% of the Purchase Consideration (equivalent to RMB33.6 million) will be paid by Shenyang Summit in due course.

The remaining 50.0% or less interest in the Chengdu Longemont Mall will be held by the Summit Group (comprising Shanghai Summit (Group) and its subsidiaries), of which Mr Tong Jinquan is the founder.

1 Based on the publication of the Management Committee of Intercity Travel Business City of Chengdu New Railway Passenger Station. The Management Committee of Intercity Travel Business City of Chengdu New Railway Passenger Station has not provided its consent, to the inclusion of the information extracted from the relevant report published by it and therefore is not liable for such information. While the Trustee-Manager has taken reasonable actions to ensure that the information from the relevant report published by Management Committee of Intercity Travel Business City of Chengdu New Railway Passenger Station is reproduced in its proper form and context, and that the information is extracted accurately and fairly from such report, neither the Trustee-Manager nor any other party has conducted an independent review of the information contained in such report nor verified the accuracy of the contents of the relevant information. 2 Shenyang Longemont Shopping Mall, one of PCRT’s existing assets in the IPO portfolio, is a 10-storey shopping mall which opened on 1 October 2011.

B-5 3.3. Overview of the Framework Agreement

The overview of the Framework Agreement, which includes the key steps in the restructuring process in order for PCRPL to acquire the Chengdu Longemont Mall Interest and certain other key terms of the Framework Agreement, are set out in paragraph 2.3 of the Letter to Unitholders of the Circular. We recommend that the Independent Directors advise Unitholders to read this paragraph carefully.

3.4. Flexibility to Increase PCRT’s Interest in Chengdu Longemont Mall

If the GFA of the Property is determined to be less than 95.0% of 455,260 sqm (which shall be no later than the time that Chengdu Ruifeng obtains the “four permits”), PCRPL shall have the flexibility to acquire a higher percentage interest (up to 80.0%) in Chengdu Longemont Mall at RMB10,000 per sqm, subject always to PCRPL paying a maximum Purchase Consideration of RMB2.28 billion (S$464.0 million) for its aggregate interest in Chengdu Longemont Mall (save for the instance where the Final GFA as stated in the Building Title Certificate is more than the Transactional GFA approved by the authority in the construction project planning permit (see paragraph 2.2 of the Letter to Unitholders of the Circular for details of the adjustment)). PCRPL may increase its stake in Chengdu Longemont Mall at its option and at any time within one year from the later of (i) the date that PCRPL completes its acquisition of the BVI SPV (as defined herein) and (ii) the date that Chengdu Ruifeng obtains the four permits.

The Trustee-Manager believes that the flexibility for PCRT to increase its interest in Chengdu Longemont Mall to more than 50.0% (and up to 80.0%) is in the interests of Unitholders as it provides an opportunity for PCRT to take majority ownership in a quality asset, thereby increasing the number of potential assets in PCRT’s portfolio with majority ownership. In addition, as the Purchase Consideration for its aggregate interest in Chengdu Longemont Mall shall in all cases be limited to a maximum of RMB2.28 billion (S$464.0 million) (save for the instance where the Final GFA as stated in Building Title Certificate is more than the Transactional GFA approved by the authority in the construction project planning permit), the maximum cash outlay of PCRT for this investment is capped.

In addition, PCRPL has the flexibility to increase its stake at any time after it has been determined that the Transactional GFA of the Property will be less than 95.0% of 455,260 sqm (which shall be no later than the time that Chengdu Ruifeng obtains the “four permits”), thereby allowing the Trustee-Manager the time and opportunity to evaluate market conditions and consider various factors, which include the potential increase in the market value per sqm of GFA with reduction of GFA and reduced number of levels of the Property, and the terms of the acquisition to determine if there is further upside potential in relation to the Property at the relevant time.

3.5. The New Earn-out Deed

Shanghai Summit Pte. Ltd. and PCRPL had on 19 January 2012 entered into the New Earn-out Deed to supplement the earn-out amounts already committed to be paid under certain circumstances under the Amended and Restated Earn-out Deed.

The New Earn-out Deed provides that, inter alia, Shanghai Summit Pte. Ltd. shall pay a further sum to PCRT of up to RMB226,525,000 in the event that PCRT’s total distribution amount from 9 June 2011 (being the date of the listing of the Units on the SGX-ST) to the first half of 2013 fall below the thresholds stipulated below.

B-6 Minimum Distribution Amount to be achieved Relevant Period by PCRT 9 June 2011 to 31 December 2011 RMB139.0 million 1 January 2012 to 31 December 2012 RMB228.0 million 1 January 2013 to 30 June 2013 RMB116.0 million

The maximum amount of RMB226,525,000 payable under the New Earn-out Deed is based on the GFA of 455,260 sqm and the Purchase Consideration of RMB2.28 billion. The maximum amount may vary if the Transactional GFA is less than 95.0% of 455,260 sqm as set out in paragraph 2.5 of the Letter to Unitholders in the Circular.

The terms of the New Earn-out Deed (including the earn-out amount) were negotiated on an arm’s length basis. In the event that PCRT’s total distribution amount in any of the specified periods falls below the stipulated threshold after drawing down amounts due under the Amended and Restated Earn-out Deed, PCRT will have the right under the New Earn-out Deed to draw down funds up to the further sum agreed. The Summit Group has agreed to set aside all amounts (such amounts being up to RMB226,525,000) under the New Earn-out Deed are payable by 31 December 2012.

It is a condition of the New Earn-Out Deed that the Acquisition is completed.

3.6. Total Acquisition Cost and Payment Schedule

The Total Acquisition Cost is currently estimated to be approximately S$477.3 million, comprising:

(a) the Purchase Consideration of RMB 2.28 billion (S$464.0 million);

(b) the acquisition fee of approximately S$6.3 million (being 1.35% of the Purchase Consideration) payable to the Trustee-Manager pursuant to the Trust Deed, will be paid in Units1. The Acquisition Fee Units shall be payable to the Trustee-Manager upon the satisfaction of both the following conditions (i) the completion of the acquisition by PCRPL of the BVI SPV and (ii) the obtaining of the four permits by Chengdu Ruifeng and the amount of the Acquisition Fee will be based on the Purchase Consideration computed based on the GFA as set out in the Construction Planning Certificate and assuming that PCRT acquires a 50.0% interest in Chengdu Longemont Mall Development. Should PCRT exercise the option to increase its stake in Chengdu Longemont Mall Development, an additional amount of Acquisition Fee will be payable upon such exercise. The Acquisition Fee Units will not be entitled to any distributions in respect of the distribution period from 1 January 2012 to 31 December 2012; and

1 The actual issue price of the Acquisition Fee Units to be issued to the Trustee-Manager will be at the relevant market price, being the volume weighted average price for a Unit for all trades on the SGX-ST in the ordinary course of trading on the SGX-ST for the period of 10 business days immediately preceding the relevant business day. “Business day” for this purpose means any day (other than a Saturday, Sunday or gazetted public holiday) on which commercial banks are generally open for business in Singapore and the SGX-ST is open for trading. Although there are no restrictions against the Trustee-Manager selling such Acquisition Fee Units immediately upon issuance, of the Acquisition Fee Units, the Trustee-Manager will not transfer these Acquisition Fee Units for a period of time in order to give effect to the non-entitlement of these Acquisition Fee Units to distributions in respect of the period from 1 January 2012 to 31 December 2012. In this regard, the Trustee-Manager will not transfer these Acquisition Fee Units from the time of their issuance until after the books closure date for the distributions in respect of the period from 2 July 2012 to 31 December 2012.

B-7 (c) the estimated professional and other fees and expenses incurred or to be incurred by PCRT in connection with the Acquisition of approximately S$7.0 million (inclusive of the professionals’ fees and expenses incurred or to be incurred for the amendments to the Credit Facilities Agreement to fund part of the first 15.0% of the Purchase Consideration of approximately S$2.1 million, the upfront fees under the Credit Facilities Agreement of approximately S$4.3 million and miscellaneous expenses incurred in connection with the Acquisition of approximately S$0.6 million) which will be borne by PCRT.

Pursuant to the terms of the Framework Agreement, the Purchase Consideration shall (assuming a 50.0% interest in Chengdu Longement Mall at an assumed Transactional GFA of 455,260 sqm) be paid in stages on a progressive basis, as follows:

First Payment: 15.0%, being RMB341.4 million payable upon obtaining the “four permits”1 in connection with the Underlying Land and construction of the Chengdu Longemont Mall and satisfaction of certain conditions precedent2 (targeted to be payable in the first quarter of 2012);

Second Payment: an additional 40.0%, being RMB910.5 million payable upon the “topping-out”3 of the Chengdu Longemont Mall (targeted to be payable in the third quarter of 2013);

Third Payment: an additional 40.0%, being RMB910.5 million payable upon the commencement of operations of no less than 70.0% of the commercial area of the Chengdu Longemont Mall (targeted to be payable in the third quarter of 2014); and

Fourth and Final Payment: the final 5.0% being RMB113.8 million payable upon the obtaining of the relevant building title deed as well as other relevant governmental approvals4 in respect of the Chengdu Longemont Mall (targeted to be payable in the fourth quarter of 2014).

The cash outlay of PCRT, and hence the amounts payable by PCRT as set out above, will be reduced if Chengdu Ruifeng is able to obtain an onshore debt facility secured by, inter alia, a mortgage over Chengdu Longemont Mall to partly fund the construction costs.

Further details in respect of the PCRT’s progress payments and the corresponding funding requirements are set out in paragraph 2.7 of the Letter to Unitholders of the Circular. We recommend that the Unitholders should read this paragraph of the Circular carefully.

1 Refers to the four approvals from the PRC governmental authorities, being (i) the land use right certificate, (ii) the construction land planning permit, (iii) the construction project planning permit and (iv) the construction, which are expected to be received in the first quarter of 2012. 2 The conditions precedent include: (i) approval of the Unitholders for the Acquisition being obtained, (ii) the Credit Facilities Agreement Lenders agreeing to amendments to the Credit Facilities Agreement for the purposes of the Acquisition, (iii) the BVI SPV holding the entire issued share capital of the Hong Kong SPV so that the BVI SPV indirectly holds 50.0% of Chengdu Ruifeng, and PCRT being satisfied with the due diligence of the BVI SPV and the Hong Kong SPV, (iv) the BVI SPV Share Transfer Agreement has been signed and takes effect, and Ms Tong Yuqian and PCRPL having completed the transfer of the shares of the BVI SPV and (v) Chengdu Ruifeng having acquired the (Interim) Qualification Certificate for Real Estate Development Enterprise. 3 Refers to the overall completion of the building’s structure. 4 Other than the building title deed which is the main governmental approval, the other governmental approvals, if required, are general administrative in nature.

B-8 4. FINANCING OF THE ACQUISITION

The Trustee-Manager intends to fund the Acquisition wholly by debt financing through one, or a combination of the methods that are set out in paragraph 5 of the Letter to Unitholders of the Circular. We recommend that the Unitholders should read this paragraph of the Circular carefully.

Pursuant to these methods, the Trustee-Manager intends that the Acquisition will be funded as follows:

• The first 15.0% of the Purchase Consideration and the further 40.0% of the Purchase Consideration payable at “topping-out” of the Chengdu Longemont Mall are expected to be funded by a combination of proceeds from the Credit Facilities Agreement and from drawdowns under the MTN Programme.

• The remaining 45.0% of the Purchase Consideration, which will be due when the Chengdu Longemont Mall commences operations and receives its building title deed, is expected to be funded from the New Loan Facility and from further drawdowns under the MTN Programme.

• It is the intention of the Trustee-Manager and of the Summit Group that a PRC onshore debt facility of approximately RMB1.138 billion (S$232.0 million) be put in place by Chengdu Ruifeng to fund the construction costs of Chengdu Longemont Mall. Such facility is expected to be secured by way of a mortgage over the Chengdu Longemont Mall. If such a facility is put in place, the cash outlay of PCRT will be reduced by 50.0% of the amount funded by such debt facility and is expected to be approximately RMB1.707 billion1.As PCRT is investing in 50.0% of Chengdu Longemont Mall on a “completed” basis at RMB10,000 per sqm of GFA, the risks of construction costs overruns will be borne by the Summit Group alone.

• In the event that the Trustee-Manager is unable to fully fund the 40.0% of the Purchase Consideration or the remaining 45.0% of the Purchase Consideration by debt financing due to volatile market conditions, the Trustee-Manager may fund all or a part of this amount through an equity fund raising or through the sale of Foshan Yicui Shijia Shopping Mall or Chengdu Qingyang Guanghua Shopping Mall. In making such a decision, the Trustee- Manager will take into account, inter alia, prevailing market conditions, the interest rate environment, the debt expiry profile and the covenants and conditions associated with each financing option, so that the Acquisition will be in the overall interest of PCRT and its Unitholders.

5. EVALUATION OF THE ACQUISITION

In reaching our recommendation in respect of the Acquisition, we have given due consideration to the following factors:

(1) The Rationale for the Acquisition;

(2) The Independent Valuations;

(3) Comparison with Selected Retail Properties;

(4) The Financial Effects of the Acquisition; and

(5) Certain Other Considerations.

B-9 5.1. The Rationale for the Acquisition

The rationale for the Acquisition is set out in paragraph 3 of the Letter to Unitholders in the Circular. We reproduce the relevant segments of the rationale below:

“(1) Accretive Acquisition

Net Asset Value (“NAV”) Accretive: The Chengdu Longemont Mall’s 2011 and 2014 independent valuations1 by CBRE are RMB12,500 per sqm of GFA as at 31 October 2011 and RMB14,930 per sqm GFA in 2014, which is a premium of 25.0% and 49.3%, respectively over the agreed property purchase price of RMB10,000 per sqm of GFA which forms the basis of the Purchase Consideration of approximately RMB2.28 billion (S$464.0 million). The Acquisition is expected to increase PCRT’s adjusted pro forma NAV per Unit of S$0.99 2 to S$1.19 3 based on CBRE’s estimated future values of all the properties of PCRT in 2014, when the Chengdu Longemont Mall commences operations. Assuming the

1 The 2011 valuations by CBRE and Colliers are on an “as if complete and fully leased” basis which provides the value of a proposed development project assuming it has already been completed, and utilises market information prevailing as at the date of the valuations. The critical assumptions adopted are: (i) construction of the property had already been completed according to the development schemes and plans made available to the valuer, (ii) all necessary licences, permits or grants to act, to build, use and occupy have been obtained, with no future payments needed to ensure this position, (iii) the property is fully leased under leasing and occupational arrangement typical of the market as at the date of valuation, (iv) revenue and property outgoings are based on prevailing economic and market conditions, and (v) net property income is capitalised for the balance lease term at the prevailing market-derived capitalisation rates. This valuation basis is to be distinguished from the “as is” or “existing condition” bases. The estimates of the future value of the property by CBRE and Colliers in 2014 are for illustrative purposes only and are not a forecast, prediction or valuation, and is an extrapolation of the valuation of the property as at 31 October 2011 (in the case of the independent valuation by CBRE) and 30 November 2011 (in the case of the independent valuation by Colliers) based on prevailing market and economic conditions as at the date of the valuation. The extrapolations are based on the current capitalisation rate, and are not to be misconstrued as a valuation into the future and take into account the level of income and rental escalation which has historically been achieved within the retail sector in China. 2 The adjusted pro forma NAV per Unit of S$0.99 excludes deferred tax and is based on the estimated future values of the Properties (as defined in the Prospectus) in 2014 from CBRE and is based on all the assumptions and adjustments set out in the section “Unaudited Pro Forma Consolidated Balance Sheet as at the Listing Date — Pro Forma NAV per Unit for illustrative purposes” of the Prospectus. 3 The adjusted pro forma NAV per unit of S$1.19 is computed by applying the estimated future value of the Chengdu Longemont Mall in 2014 from CBRE of RMB14,930 per sqm of GFA to the adjusted pro forma NAV per unit of S$0.99 derived in the Prospectus and based on all the assumptions and adjustments set out therein, after incorporating the following key adjustments and assumptions, and excluding deferred tax: (i) the GFA of the Chengdu Longemont Mall for the purposes of computing the Purchase Consideration under the Framework Agreement is 455,260 sqm, (ii) the RMB amount in respect of the estimated future value and Purchase Consideration of the Chengdu Longemont Mall is translated into Singapore dollars based on the foreign exchange rate of RMB4.906 = S$1.00, (iii) the number of Units are assumed to remain as that used in deriving the adjusted pro forma NAV per unit of S$0.99 in the Prospectus, and (iv) the NAV per unit increase is computed based on the increase in valuation of the estimated future value of the Chengdu Longemont Mall which is an extrapolation of the “as if complete and fully leased” valuation by CBRE as at 31 October 2011 compared to the Purchase Consideration.

B-10 Acquisition was completed on 30 September 2011, the Acquisition is expected to increase PCRT’s adjusted pro forma NAV per Unit of S$0.67 1 to S$0.76 2 as at 30 September 2011.

(2) Strategic Location with Direct Connectivity to Chengdu East HSR Station

(3) Favourable Payment Schedule Provides Funding Flexibility and Reduces Costs

The largely back-loaded payment structure reduces the amount which PCRT needs to finance upfront and consequently, reduces interest and other related expenses for the Acquisition in such period.”

In addition to the above, we note that the Property is one of the prime Longemont commercial developments directly connected to high-speed railway stations which were identified as pipeline assets for PCRT and which were secured by options and rights of first refusal. As such, the Acquisition is entirely consistent with both the strategies and the execution of the pipeline of prospects made known to the Unitholders at the time of PCRT’s initial public offering.

1 The adjusted pro forma NAV per Unit of S$0.67 excludes deferred tax and is based on the valuation by CBRE of the Properties (as defined in the Prospectus) as at 31 December 2010 and is based on all the assumptions and adjustments set out in the section “Unaudited Pro Forma Consolidated Balance Sheet as at the Listing Date — Pro Forma NAV per Unit for illustrative purposes” of the Prospectus. Deferred tax which is payable on the profit from the disposal of property is excluded as PCRT intends to hold its assets on a long-term basis. The amount of such deferred tax depends on the method of disposal of the property. 2 The adjusted pro forma NAV per unit of S$0.76 is computed by applying the valuation by CBRE of the Chengdu Longemont Mall as at 31 October 2011 of RMB12,500 per sqm of GFA to the adjusted pro forma NAV per unit of S$0.67 derived in the Prospectus and based on all the assumptions and adjustments set out therein, after incorporating the following key adjustments and assumptions, and excluding deferred tax: (i) the GFA of the Chengdu Longemont Mall for the purposes of computing the Purchase Consideration under the Framework Agreement is 455,260 sqm, (ii) the RMB amount in respect of the valuation and Purchase Consideration of the Chengdu Longemont Mall is translated into Singapore dollars based on the foreign exchange rate of RMB4.906 = S$1.00, and (iii) the number of Units are assumed to remain as that used in deriving the adjusted pro forma NAV per unit of S$0.67 in the Prospectus.

B-11 5.2. The Independent Valuations

The Purchase Consideration of approximately RMB2.28 billion (S$464.0 million) under the Framework Agreement was arrived at on a willing-buyer and willing-seller basis after taking into account the market valuation of Chengdu Longemont Mall.

The Trustee-Manager has commissioned the Independent Valuers, being CBRE and Colliers, to opine as to the value of the Chengdu Longemont Mall. This was done voluntarily for the benefit of the Unitholders as the Listing Manual requires only one such valuation. The Valuation Summary Letters of the Independent Valuers are attached as Appendix C of the Circular.

It is important that the Unitholders understand the basis upon which the valuations have been drawn up. Both independent valuations (“Independent Valuations”) have been drawn up on an “as if complete and fully leased” basis. Such basis gives the value of the development project under assumption that it has already been completed and utilising the market information that is prevailing as at the date of the valuations. In such a basis, the assumptions that are critical to the value given are as follows:

(a) construction of the property has been completed in line with the development schemes and plans made available to the valuer;

(b) all necessary licences, permits and/or grants to act, to build, use and occupy have been obtained with no additional payments needed to ensure this position;

(c) the property is fully leased under leasing and occupational arrangements typical of the market as at the date of valuation;

(d) revenue and property outgoings are earned or incurred based on the prevailing economic and market conditions as at the date of valuation; and

(e) net property income is capitalised for the balance lease term at market-derived capitalisation rates prevailing as at the valuation date.

Further, we note that the Independent Valuers have stated that their estimates of the future value of the Property in 2014 are for illustrative purposes only, are not a forecast, prediction or valuation into the future and are extrapolations of the valuation of the property as at 2011 based on prevailing market and economic conditions as at the date of the valuation.

Such extrapolations are based on the current capitalisation rate and take into account the level of income and rental escalation which has historically been achieved within the retail sector in China. Such estimated future values (which are not to be construed as a valuation at a future date) were made by extrapolating revenue and property outgoings with certain assumptions made on rental growth, operating costs escalation, renewals and lease up periods, vacancy/bad debt allowances etc. Net property income in the extrapolations is then capitalised using an appropriate rate for the balance lease term in Year 2014.

The fundamental consideration in the extrapolation exercises is that each of the assets has an appropriate tenancy mix and asset management strategy to achieve its full income potential. It also takes into account the level of income/rental escalation which has historically been achieved within the retail sector in China. (See Appendix C, “Valuation Summary Letters” for the assumptions taken into account in the extrapolations).

B-12 With this understanding, we summarise the valuations of the Independent Valuers below:

All per sqm of GFA unless stated otherwise CBRE Colliers 2011 Independent Valuation RMB12,500 RMB12,700 2011 Independent Valuation (GRA basis) RMB 15,600 RMB 15,870 2014 Estimated Future Value RMB13,430(1) to RMB15,200 RMB14,930 2014 Estimated Future Value (GRA basis) RMB16,770(1) to RMB 18,920 RMB18,630 Valuation Dates 31 October 2011 30 November 2011

Purchase Consideration in 2011 RMB10,000 Purchase Consideration in 2011 (GRA basis) RMB12,485 Extent to which 2011 Independent Valuation is 25.0% 27.0% higher than Purchase Consideration(2) Extent to which 2014 Independent Valuation is 34.0% − 49.3% 52.0% higher than Purchase Consideration(2)

Notes: (1) Based on the lower end of the range of estimates of the future value of the Property by CBRE in 2014 of RMB6.12 billion. (2) The percentages noted reflect the extent of difference between the respective independent valuations per sqm of GFA and the purchase price of RMB10,000 per sqm of GFA expressed as a percentage of the purchase price.

The key points to be highlighted in respect of the Independent Valuations are as follows:

(i) Consistent Bases of Valuation: Both of the Independent Valuers have used “Market Value” as their basis of valuation, the definitions of which appear to be broadly consistent. Further, the Independent Valuations as at the Valuation Dates are all drawn up on an “As if complete and fully leased” basis. This basis appears to be consistent with the basis upon which the Purchase Consideration was negotiated, in that the Purchase Consideration of RMB10,000 per sqm of GFA was agreed on a “completed” basis.

(ii) Consistent Valuation Approaches: Both Independent Valuers have used both the capitalisation of income approach and the direct comparison approach in arriving at their opinions.

(iii) Market Valuations as at the Valuation Dates: The market values of the Property as computed by CBRE and Colliers for 2011 are 25.0% and 27.0%, respectively, higher than the agreed property purchase price of RMB10,000 per sqm of GFA. In arriving at these market valuations, we note that:

(a) The Independent Valuations are based on a “As if complete and fully leased” basis as at the Valuation Dates, whereas the Property is only expected to commence operations in the third quarter of 2014; and

(b) The Independent Valuations are based on a “As if complete and fully leased” basis, whereas the Purchase Consideration was arrived at on a “completed” (i.e. not fully leased) basis.

B-13 The Trustee-Manager believes that the differences between the market valuations of the Property provided by the Independent Valuers for 2011 and the Purchase Consideration reflects the investment return to PCRT for the commercial, market and financial risks to be borne by PCRT in connection with the Acquisition. We highlight a number of such risks for the Unitholders in paragraph 5.5.2 and 5.5.3 of this letter.

(iv) Estimated Future Value in 2014: The Estimated Future Values of the Property as computed by CBRE and Colliers for 2014 (being the expected year for commencement of operations of the Property) are between 34.0% and 49.3% (for CBRE) and 52.0% (for Colliers), respectively higher than the agreed property purchase price of RMB10,000 per sqm of GFA.

The Trustee-Manager believes that the differences between the Estimated Future Values of the Property in 2014 and the agreed property purchase price of RMB10,000 per sqm of GFA reflects the potential for appreciation of the Property’s value between the agreed purchase price and the estimated values in 2014.

5.3. Comparison with Selected Retail Properties

We have compiled details of certain selected retail properties located in Chengdu and other Tier II cities in China (the “Selected Retail Properties”) as a basis to compare with the Purchase Consideration. We note that there are only a limited number of directly comparable properties which have been the subject of a transaction and/or independent valuation in the recent past for which the details we require are in the public domain.

We note also that the Property may differ from the Selected Retail Properties insofar as there are differences in location, tenant mix, accessibility, title, net lettable area, proximity to major venues and/or transportation hubs, outstanding lease tenure, market risks, track record and other relevant factors. Further, the transactions and/or valuations of the Selected Retail Properties were undertaken at different points in time under different market and economic conditions. These differences may be significant.

Accordingly, the Unitholders should note that the comparisons made as between the Property and the Selected Retail Properties serves as an illustrative guide only. We highlight that the comparisons drawn are only one of a number of factors considered by us in our evaluation.

Years to Valuation Valuation Valuation Lease GRA (RMB per GRA Name of Property Location Date Expiry (sqm) millions) (RMB/sqm)

The Property(1) Chengdu Nov-11 40 364,650 4,553 12,485

GTC Galleria(2) Chengdu Jun-11 36 53,837 850 15,788

CapitaMall Jinniu(5) Chengdu Jun-11 33 57,884 438 7,567

CapitalMall Shawan(5) Chengdu Jun-11 35 38,612 338 8,754

Chengdu Qingyang Guanghua Shopping Mall Chengdu Dec-10 40 90,000 849(10) 9,433

Renhe Spring Zongbei(3) Chengdu Dec-10 25 9,369 413 44,082

ID Mall(4) Changsha Sept-10 N.A.(11) 80,000 1,500 18,750

CapitaMall Peace Plaza(5) Dalian Jun-11 24 157,576 1,759 11,163

Tianxing Roosevelt Centre(6) Dalian Jan-10 N.A.(11) 138,216 2,040 14,760

Foshan Yicui Shijia Shopping Mall Foshan Dec-10 38 68,833 795(10) 11,550

Central Avenue Mall(6) Qingdao Jun-11 37 43,643 646 14,802

B-14 Years to Valuation Valuation Valuation Lease GRA (RMB per GRA Name of Property Location Date Expiry (sqm) millions) (RMB/sqm)

Shenyang Red Star Macalline Furniture Mall Shenyang Dec-10 38 276,474 2,904(10) 10,504

Shenyang Longemont Shopping Mall Shenyang Dec-10 38 327,789 3,450(10) 10,525

CMA-SIP JUD Suzhou Industrial(8) Suzhou Oct-11 N.A.(11) 310,000 6,740 21,742

CapitaMall TianjinOne(5) Tianjin Jun-11 43 59,305 630 10,623

New Minzhong Leyuan(9) Wuhan Jun- 11 34 38,631 417 10,794

Average 14,722

Average (Excluding Renhe Spring Zongbei)(3) 12,625

High 44,082

Low 7,567

Source: REIT or company filings and circulars to unitholders or shareholders (as the case may be) in relation to the respective transactions where available and DTCF analysis.

Notes: (1) The valuation of the Property is based on the Purchase Consideration of approximately RMB2.28 billion (S$464.0 million) for the Chengdu Longemont Mall Interest pursuant to the Acquisition. (2) The GTC Galleria was the subject of an arms-length transaction of a 50% interest by MGPA Asia Fund III. The valuation date used is its transaction date. (3) Renhe Spring Zongbei is owned by Starhill Global Real Estate Investment Trust and its valuation has been extracted from the annual report for the financial year ended 31 December 2010. The high valuation per psm of GRA may be attributed to, amongst other things, its location in a high-end and high income area and its exclusive tenant profile. (4) The ID Mall was the subject an arms-length transaction of a 100% interest by CITIC Capital Holdings Limited. The valuation date used is its transaction date. (5) These properties are between 30 and 45% owned by CapitaMalls Asia Limited. Valuation dates are the latest available valuation reports. (6) Tianxing Roosevelt Centre was the subject of an arms-length transaction of a 100% interest by ARA Asia Dragon Fund. This property was acquired by ARA Asia Dragon Fund in January 2010 (Source: Annual report of ARA Asset Management Limited for the financial year ended 31 December 2010). The sale price was approximately US$300 million. The exchange rate used is RMB6.80 = US$1.00, being the average exchange rate of RMB versus the US$ in January 2010 (Source: Bloomberg). (7) This property is 55% owned by Treasury China Trust and 45% owned TRIO Group. Valuation dates are the latest available valuation report. (8) CMA-SIP JUD Suzhou Industrial refers to the CapitaMalls Asia-SIP JUD Suzhou Centre development, an integrated development comprising a shopping mall (GFA 250,000 sqm) and office (GFA 60,000 sqm) to be developed jointly by CMA and Suzhou Industrial Park Jinji Lake Urban Development Co., Ltd. The valuation psm of GRA indicated is based on the total expected development cost of the project of RMB6.74 billion disclosed in CMA’s news release dated 25 October 2011. (9) This property is owned and operated by CapitaRetail China Trust. Valuation dates are the latest available valuation report. The property was acquired by CapitaRetail China Trust from Ascott Holding Limited (an indirect wholly-owned subsidiary of CapitaLand Limited) in 2011 for a purchase consideration of RMB 395 million (RMB 10,225 psm of GRA). (10) The market values of Chengdu Qingyang Guanghua Shopping Mall, Foshan Yicui Shijia Shopping Mall and Shenyang Longemont Shopping Mall as at 31 December 2010 have been extracted from the Independent Property Valuation Summary report attached in the Prospectus. The 3 properties were under development on the valuation date and basis of valuation used was market value “As if complete and fully leased basis”. The market value of Shenyang Red Star Macalline Furniture Mall as at 31 December 2010 has been extracted from the Independent Property Valuation Summary report attached in the Prospectus. The basis of valuation used was market value subject to existing tenancies and occupational. (11) “N.A.” refers to not publicly available.

B-15 We highlight the following in respect of the details laid out in the table above: (i) The information compiled above in respect of the Selected Retail Properties is presented on a per sqm basis of GRA, not per sqm of GFA. (ii) The purchase price of RMB12,485 psm of GRA for the Property is within the range of values given for the Selected Retail Properties. (iii) The purchase price of RMB12,485 psm of GRA for the Property is broadly in line with the average value for the Selected Retail Properties.

5.4. The Financial Effects of the Acquisition The pro forma impact of the Acquisition is set out in paragraph 4.1 of the Letter to Unitholders of the Circular. We note that assumptions were made for the purpose of preparation of the pro forma financial effects. We recommend that the Independent Directors advise Unitholders to read these carefully, as well as take them into consideration when considering the financial effects of the Acquisition.

5.4.1. Pro forma NAV Assuming the Acquisition was completed on 30 September 2011, the pro forma financial effects of the Acquisition on the NAV per Unit as at 30 September 2011 would be as follows:

Effects of the Acquisition Before the Acquisition After the Acquisition NAV (S$’000) 749,307 858,300 Issued Units (’000) 1,121,695 1,134,830 NAV per Unit (S$) 0.67 0.76 Based on the figures above, we note that the pro forma NAV per Unit increases by S$0.09 (or 13.4%), due to valuation of the Property being higher than the Purchase Consideration.

5.4.2. Pro forma Capitalisation Assuming PCRT had completed the Acquisition, issued no Units as consideration for the Acquisition and incurred additional borrowings of S$355.0 million on 30 September 2011, the following table sets forth the pro forma capitalisation of PCRT as at 30 September 2011:

Adjusted for the Actual Acquisition (S$ million) (S$ million) Long-term debt: Secured debt 9.4 9.4 Unsecured debt 0 355.0

Total long-term debt 9.4 364.4 Total debt 9.4 364.4

Unitholders’ funds 749.3 858.3

Total Unitholders’ funds 749.3 858.3

Total Capitalisation 758.7 1,222.7

B-16 Based on the figures above, we note that the total debt increases from S$9.4 million to S$364.4 million, while PCRT’s Aggregate Leverage increase from 1.2% to 29.8%1 on a pro forma basis.

5.5. Certain Other Considerations

5.5.1. The New Earn-out Deed

The New Earn-out Deed supplements the earn-out amounts already committed to be paid under certain circumstances under the Amended and Restated Earn-out Deed by up to RMB226,525,000, which amounts to approximately 10.0% of the Purchase Consideration based on a completed GFA of 455,260 sqm. We note that the completion of the Acquisition is a condition precedent for such incremental sums under the New Earn-out Deed to be available to PCRT. As such, the New Earn-out further strengthens the Trustee-Manager’s capacity to deliver the total distribution amount in respect of Forecast Year 2011 and Projection Year 2012 as disclosed in the Prospectus and strengthens the cash flows for distribution to Unitholders in the first half of 2013.

As the New Earn-out Deed is contingent upon completion of the Acquisition, it can be viewed as an additional benefit arising from the Acquisition. Should PCRT drawdown amounts under the New Earn-out Deed, the effective Purchase Consideration will be lower than the agreed amount of approximately RMB2.28 billion (S$464.0 million) by the aggregate amount drawdown under the New Earn-out Deed.

5.5.2. Certain Commercial Risks

Any such commercial risks and/or significant periods of vacancy or unfavourable lease terms will adversely impact the revenue, profitability and realised value of the Property.

We note that the Trustee-Manager has mitigated the impact of such risks eventuating by ensuring that the purchase price for the Property is settled at a discount to the market valuations on an “as if complete and fully leased” basis, by ensuring that the Acquisition contemplates a purchase price which requires that Shanghai Summit deliver on a “completed” basis and that the payment structure is largely back-loaded (which serves to reduce interest and other related expenses for the Acquisition).

B-17 5.5.3. Certain Financing Risks

Certain Financing Risks in respect of the Acquisition are set out in paragraph 4.4.2 of the Letter to Unitholders of the Circular. We recommend that the Independent Directors advise Unitholders to read these carefully. Certain aspects relating the financing risks are set out in the paragraphs below.

The Trustee-Manager intends to fund the Acquisition wholly by debt financing. Such debt financing will be implemented through one of, or a combination of, the methods set out in paragraph 5 of the Letter to Unitholders of the Circular.

Under the existing plans, the first 15.0% of the Purchase Consideration and the 40.0% of the Purchase Consideration payable at the stage of “topping-out” of the Chengdu Longemont Mall shall be funded by a combination of the proceeds from the Credit Facilities Agreement and from draw-downs under the MTN Programme.

PCRT may require additional debt financing to fund the balance 45.0% of the Purchase Consideration, which will be due when the Chengdu Longemont Mall commences operations and receives its building title deed, expected in the fourth quarter of 2014. There can be no assurance that such financing will be available at that time, on acceptable terms.

We note that the Trustee-Manager has succeeded in structuring the Acquisition in a manner which may permit funding to be sourced entirely by debt capital, whilst maintaining leverage within permitted levels. Further, the Trustee-Manager has considered its alternatives in the event that its plans cannot be implemented. Nonetheless, the Unitholders should be aware that there can be no absolute assurance that such debt financing will be available on acceptable terms and that there may be a need either to divest assets at times which are non-optimal or to seek additional financing which may prove dilutive to Unitholders.

5.5.4. Property Management Agreement

We note that under the terms of the Property Management Agreement to be entered into between the Property Manager and PCRT, the Property Manager will provide property management services for Chengdu Longemont Mall.

The fees payable to the Property Manager pursuant to the Property Management Agreement is set out as follows:

• 2.0% of the Gross Revenue of Chengdu Longemont Mall;

B-18 • 2.0% of the Net Property Income of Chengdu Longemont Mall; and

• 0.5% of the Net Property Income of Chengdu Longemont Mall in lieu of leasing commissions otherwise payable to the Property Manager and/or third party agents.

The full text of information on the Property Management Agreement can be found in paragraph 2.6 of the Letter to Unitholders of the Circular. We recommend that the Unitholders read this paragraph of the Circular carefully.

We note that the terms of the Property Management Agreement are in line with the terms of PCRT’s existing property management agreement as well as being in line with the disclosed terms of property management agreements of certain real estate investment trusts listed on the SGX-ST, and hence do not appear unreasonable or prejudicial to PCRT and the Unitholders.

6. THE PROPOSED TRUST DEED SUPPLEMENT IN RELATION TO THE FORM OF PAYMENT OF MANAGEMENT FEES

The Trustee-Manager is seeking Unitholders’ approval under Clause 25.2 of the Trust Deed (which relates to the requirement to obtain the approval of Unitholders to modify the Trust Deed) to supplement the Trust Deed with the Trust Deed Supplement in relation to the form of payment of Management Fees for the purposes of allowing the Trustee-Manager to elect to receive its management fees in either cash or Units even when the issue price (which is equal to the Market Price) of each Unit is below the NAV per Unit at such point where the management fees are payable to the Trustee-Manager. Details of the Proposed Management Fees Supplement are set out in Appendix E of the Circular. Further, the rationale for the Proposed Management Fees Supplement can be found in paragraph 7.2 of the Letter to Unitholders of the Circular. We recommend that the Unitholders read these parts of the Circular carefully.

We note that the changes proposed in the Proposed Management Fees Supplement are in line with the disclosed form of payment of management fees for other business trusts and real estate investment trusts listed on the SGX-ST.

On this basis we conclude that the changes proposed in the Proposed Management Fees Supplement are not unreasonable and hence not prejudicial to the interests of PCRT and the Unitholders.

7. OUR RECOMMENDATION

In arriving at our recommendation, we have taken into account the following factors which we consider to have a significant bearing on our assessment of the Acquisition:

(i) The rationale for the Acquisition;

(ii) The Acquisition represents the consummation of one of a pipeline of assets identified as consistent with the strategies of PCRT and made known to the Unitholders at the time of PCRT’s initial public offering;

(iii) The market values of the Property as at 2011 as opined on by the Independent Valuers are 25.0% (for CBRE) and 27.0% (for Colliers), respectively higher than the agreed property purchase price of RMB10,000 per sqm of GFA. In arriving at these market valuations, we note that:

B-19 (b) The Independent Valuations are based on a “As if complete and fully leased” basis, whereas the Purchase Consideration was arrived at on a “completed” (i.e. not fully leased) basis.

The Trustee-Manager believes that the differences between the market valuations of the Property provided by the Independent Valuers for 2011 and the Purchase Consideration reflects the investment return to PCRT for the commercial, market and financial risks to be borne by PCRT in connection with the Acquisition;

(iv) The Estimated Future Values of the Property as computed by CBRE and Colliers for 2014 (being the expected year for commencement of operations of the Property) are between 34.0% and 49.3% (for CBRE) and 52.0% (for Colliers), respectively above the agreed property purchase price of RMB10,000 per sqm of GFA.

(v) The purchase price of RMB12,485 psm of GRA for the Property is within the range of prices and values given for the Selected Retail Properties;

(vi) The purchase price of RMB12,485 psm of GRA for the Property is broadly in line with the average value for the Selected Retail Properties;

(vii) The pro forma NAV per Unit increases by S$0.09 (or 13.4%) due to the valuation of the Property being higher than the Purchase Consideration;

(viii) The New Earn-out Deed (for which the completion of the Acquisition is a condition precedent for draw-down of incremental sums) will further strengthens the Trustee- Manager’s capacity to deliver the total distribution amount in respect of Forecast Year 2011 and Projection Year 2012 as disclosed in the Prospectus and strengthens the cash flows for distribution to Unitholders in the first half of 2013. The New Earn-out Deed is an additional benefit arising from the Acquisition and should PCRT drawdown amounts under the New Earn-out Deed, the effective Purchase Consideration will be lower than the agreed amount of approximately RMB2.28 billion (S$464.0 million) by the aggregate amount drawdown under the New Earn-out Deed;

(ix) The Property is being acquired on a “completed” basis. Nonetheless, it is a substantial development property in a promising, emerging market and as such is subject to a number of commercial and market risks. Such risks may have an adverse impact on the revenues, profitability and realised value of the Property. We note however that the Trustee-Manager has taken steps to mitigate the impact of such risks eventuating;

(x) The terms of the Property Management Agreement are in line with the terms of PCRT’s existing property management agreement as well as being in line with the disclosed terms of property management agreements of certain real estate investment trusts listed on the SGX-ST; and

(xi) In respect of the Proposed Management Fees Supplement, we note that the changes proposed in the Proposed Management Fees Supplement are in line with the disclosed form of payment of management fees for other business trusts and real estate investment trusts listed on the SGX-ST.

Subject to the assumptions and qualifications set out herein and taking into account the prevailing conditions as at the Latest Practicable Date, we are of the opinion that the Acquisition,

B-20 the Property Management Agreement and the Proposed Management Fees Supplement are on normal commercial terms and not prejudicial to PCRT and its minority Unitholders. Accordingly, we are of the opinion that the Independent Directors and the Audit and Risk Committee can recommend that Unitholders vote in favour of the Acquisition and the Trust Deed Supplement in relation to the form of payment of the management fees to be proposed at the Extraordinary General Meeting.

In arriving at our recommendations, we emphasize that we have, inter alia, relied on representations made by the Board and the Trustee-Manager in relation to the current intentions and future direction of PCRT. The Independent Directors and the Audit and Risk Committee should note that we have arrived at these conclusions based upon the information made available to us up to and including the Latest Practicable Date.

Our recommendation is addressed to the Independent Directors and the Audit and Risk Committee for their benefit in connection with and for the purpose of their consideration of the Proposed Transactions. Any recommendation made by the Independent Directors and the Audit and Risk Committee in respect of the Proposed Transactions shall remain their responsibility.

Our recommendation is governed by the laws of Singapore and is strictly limited to the matters stated herein and does not apply by implication to any other matter.

Yours faithfully Deloitte & Touche Corporate Finance Pte Ltd

Jeff Pirie Executive Director

B-21 This page has been intentionally left blank. APPENDIX C

VALUATION SUMMARY LETTERS

International Valuation, Asia

CBRE Pte. Ltd. 6 Battery Road #32-01

Singapore 049909

T (65) 6224 8181 F (65) 6225 1987

www.cbre.com.sg

Co. Reg. No.: 197701161R Agency Licence No.: L3002163I 3 November 2011

Perennial China Retail Trust Management Pte. Ltd. (As Trustee-Manager of Perennial China Retail Trust) 6 Temasek Boulevard #25-04/05 Suntec Tower Four Singapore 038986

Dear Sirs

Parcel A (the “Property”) Proposed Commercial Development (Chengdu HSR) Chengdu, Sichuan Province The People’s Republic of China

Instructions

We refer to instructions issued by Perennial China Retail Trust Management Pte. Ltd. (as Trustee-Manager of Perennial China Retail Trust), requesting formal valuation advice in respect of the abovementioned Property. We have specifically been instructed to provide our opinion of Market Value as at 31 October 2011 of the remaining leasehold interest in the Property on a “As if completed and fully leased” basis, subject to the development proposals as disclosed.

We have prepared a comprehensive formal valuation report (the “Report”) in accordance with the requirements of our instructions and the following international definition of Market Value, namely:

"Market Value is the estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion".

and also on the following basis:

"The price at which the property might reasonably be expected to be sold at the date of the valuation assuming:

i. a willing, but not anxious, buyer and seller; and

ii. a reasonable period within which to negotiate the sale, having regard to the nature and situation of the Property and the state of the market for property of the same kind; and

iii. that the Property will be reasonably exposed to the market; and

C-1 International Valuation, Asia

CBRE Pte. Ltd. 3 November 2011

iv. that no account is taken of the value or other advantage or benefit, additional to market value, to the buyer incidental to ownership of the Property being valued; and

v. that the seller has sufficient resources to allow a reasonable period for the exposure of the Property for sale; and

vi. that the seller has sufficient resources to negotiate an agreement for the sale of the Property."

In adopting this definition of value, we are of the opinion that it is consistent with the international definition of Market Value as advocated by the Royal Institution of Chartered Surveyors (RICS).

We provide a Summary of the Report outlining key factors that have been considered in arriving at our opinions of value. The value conclusions reflect all information known by the valuers of CBRE who worked on the valuations in respect of the Property, market conditions and available data.

Reliance on This Letter

This short format report alone does not contain the necessary data and support information included in our Report. For further information to that contained herein, reference should be made to the Report, copies of which are held by the Manager.

CBRE has provided the Manager with comprehensive valuation report for the Property. The valuation and market information are not guarantees or predictions and must be read in consideration of the following:

The Report is approximately 40 to 50 pages in length and the conclusions as to the estimated value are based upon the factual information set forth in that report. Whilst CBRE has endeavoured to assure the accuracy of the factual information, it has not independently verified all information provided by the Manager (primarily copies of leases and financial information with respect to the Property as well as reports by independent consultants engaged by the Manager). CBRE believes that every investor, before making an investment in the Perennial China Retail Trust, should review at least one of the reports to understand the complexity of the methodology and the many variables involved.

The methodologies used by CBRE in valuing the Property – the Capitalisation of Income and Direct Comparison Approach – are based upon estimates of future results and are not predictions. These valuation methodologies are summarised in the Valuation Rationale section of this letter. Each methodology begins with a set of assumptions as to income and expenses of the Property and future economic conditions in the respective local markets. The income and expense figures are mathematically extended with adjustments for estimated changes in economic conditions. The resultant value is considered the best practice estimate, but is not to be construed as a prediction or guarantee and is fully dependent upon the accuracy of the assumptions as to income, expenses and market conditions. The basic assumptions utilised for the Property are summarised in the Valuation Rationale of this letter.

The Report was undertaken based upon information available as at 18 October 2011. CBRE accepts no responsibility for subsequent changes in information as to income, expenses or market conditions.

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CBRE Pte. Ltd. 3 November 2011

This confidential document is for the sole use of persons directly provided with it by CBRE (Pte) Ltd. Use by, or reliance upon this document by anyone other than Perennial China Retail Trust Management Pte. Ltd. (as Trustee-Manager of Perennial China Retail Trust) is not authorised by CBRE and CBRE is not liable for any loss arising from such unauthorised use or reliance. This document should not be reproduced without our prior written authority.

A copy of our Assumptions, Disclaimers, Limitations and Qualifications is appended.

Property Description

The following section provides a brief summary of the Property.

Parcels A, Proposed Commercial Development (Chengdu HSR)

The proposed Chengdu Longemont Mall is situated in Chenghua District within the Third Ring Road of South- East Chengdu, Sichuan province, China. The mall is located adjacent to Chengdu East High-Speed Railway (“HSR”) Station, a newly-constructed transportation hub comprising the inter-city high-speed railway, Chengdu city’s intra-city subway and long and short distance bus station.

The area surrounding the proposed subject property has been designated as Chengdu’s new Central Business District and is currently being built up with several residential apartments, commercial offices and business centres. The adjoining Chengdu Longemont mixed-use development is expected to feature office towers, convention centre, hotel and wholesale centre.

The proposed mall is part of Chengdu Longemont mixed-use development and is well connected within the development. It comprises approximately 455,260 sqm of Gross Floor Area, of which approximately 80% is retail space and the remaining for carpark space. The mall is also expected to be directly connected to the adjacent HSR via its basement level, providing good accessibility to and from the transportation hub. The subject property is expected to offer a variety of retail and entertainment options targeted at the middle- income, including a supermarket, an amusement park, local and international fashion retailers and Food and Beverage outlets. The Chengdu Longemont Mall is expected to commence operations in Third Quarter 2014.

Summary of Property Details

The following table summarises the key Property details as follows:

Remaining Land Area NLA GRA GFA Project Lease Term Type (sqm) (sqm) (sqm) (sqm) (years)

Parcel A39.30 39.50 Retail 48,27348,222 255,254 364,650 455,260

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CBRE Pte. Ltd. 3 November 2011

Market Commentary

China’s economy registered a slowdown in expansion in 2011 after the strong economic growth of 10.3% in 2010. The third quarter of 2011 saw economic growth of 9.1% year-on-year, the weakest growth since 2009, resulting from external economic pressure from the global debt uncertainty surrounding the Eurozone and nominal economic growth in the U.S., as well as inflation, monetary pressure and weaker export domestically. Inflation rose consistently throughout the year and reached a new high of 6.56% in the third quarter of 2011, leading to the implementation of increasingly aggressive monetary policies.

The Purchasing Manager’s Index (PMI) has been falling gradually from April this year but recovered slightly in August. The PMI rose marginally from 50.7 in July to 50.9 in August, while the service sector index dropped from 59.6 to 57.6 in the same period. The figures indicate that although both the manufacturing and servicing industries are still expanding in the third quarter, the growth rate has weakened as compared to the previous year. Key economic indicators suggest a cautious outlook for the economy in the short to medium term.

The retail sector appears to be less affected by the current economic climate with the retail investment growth rate rising continually since 2008. China retail property investment has been growing at an average annual rate of more than 20% over the past decade until the end of 2010, while high-end department store retail sales have also registered strong growth averaging 15% to 18% in 2010 as a result of strong domestic demand.

Several key underlying macro fundamentals indicate that this strong domestic demand is likely to persist. Positive growth in both wage and employment levels, coupled with potential changes in government policies, could lead to higher disposable income and trigger increased spending. Continual urbanisation and improved infrastructure, including the construction of suburban retail hubs and transportation network, within China would promote the development of large-scale malls, and hence strengthen the country’s investment- grade retail sector. The United Nations has predicted that China’s urban population will exceed 900 million Chinese citizens by 2030 and this change in population structure would likely stimulate the growth of retail sector over the next few years.

The past decade has seen the retail sector in China undergo significant development as foreign entities enter the segment. Modern shopping facilities have sprouted up across the country as retailers look to capitalise on a more affluent populace and rising domestic consumption resulting from the increase in population density. With emerging retail markets in second and third tier cities experiencing higher rentals and undersupply, together with rapid urbanisation in these cities, the retail sector is expected to develop rapidly in the next few years. Strong opportunities reside within the up and coming lower tier cities as more quality branded retailers seek to penetrate these emerging markets. Average annual retail sales growth across China is expected to reach 9.5% from now until 2015, with Beijing, Tianjin and Chongqing leading the growth.

Overall, the outlook of China’s economy remains favourable to the property market over the short term as the RMB is expected to continue its gradual but steady upward trend to counter the negative impacts of declining export growth and domestic inflationary pressure. As such, China is expected to be more of a consumer economy rather than the "world's factory" as before, with the economy underpinned by domestic demand, consumption and the growing services sector.

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Valuation Rationale

In arriving at our opinion of value, we have considered relevant general and economic factors and in particular have investigated recent sales and leasing transactions of comparable properties that have occurred in the relevant market. We have utilised the Capitalisation of Income Approach in undertaking our assessment of the Property. The Direct Comparison Approach is adopted as a secondary method of valuation.

Capitalisation of Income Approach

We have utilised a capitalisation approach in which the sustainable net income on a fully leased basis has been estimated having regard to the net rental income.

The resultant net income has thereafter been capitalised for the remaining tenure of the respective Property to produce a core capital value. The yields adopted reflect the nature, location and tenancy profile of the Property together with current market investment criteria, as evidenced by the sales evidence considered. Thereafter, appropriate capital adjustments have been included relating to rental reversion adjustments.

Summary of Value

Based on the above, the following table summarises the assessed market value for the Property:

Assessed Market RMB psm of RMB psm of RMB psm of Project Value (RMB) NLA GRA GFA

Parcel A 5,688,000,000 22,280 15,600 12,500

Please see Appendix for our Valuation Certificate of the Property.

Assessment of Value

We are of the opinion that the Market Value of the leasehold interest in the Property on a “As if completed and fully leased” basis, subject to the development proposal provided, is:

RMB 5,688,000,000 (Renminbi Five Billion Six Hundred and Eighty-Eight Million)

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CBRE Pte. Ltd. 3 November 2011

Specific Reporting Requirement

The client has asked CBRE for advice regarding a possible price or values for the Property in the future. This is beyond the scope of the valuation by CBRE and the following is an extrapolation of the analysis contained within our full valuation reports. It is not a forecast or prediction or valuation and the extrapolation is based on prevailing market and economic conditions as at the date of valuation.

This request for a future price or value in Year 2014 assumes appropriate tenancy mix and lease negotiations to achieve the full income potential of the property. It also takes into account the level of income/rental escalation which has historically been achieved within the retail sector in China.

There is expectation within the market that yields for institutional quality real estate will firm over the next 5 to 10 years as China further develops an extensive domestic institutional platform.

We detail our extrapolation for the property below and we state that this is not to be misconstrued as a valuation into the future.

Project Range (RMB)

Parcel A 6,115,000,000 - 6,795,000,000

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CBRE Pte. Ltd. 3 November 2011

Disclaimer

CBRE has relied upon property data supplied by the Manager which we assume to be true and accurate. CBRE takes no responsibility for inaccurate client supplied data and subsequent conclusions related to such data.

The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions and are our personal, unbiased professional analyses, opinions and conclusions. Messrs Danny Mohr and Lim Khee Boon have no present or prospective interest in the Property and have no personal interest or bias with respect to the party/s involved. The valuers’ compensation is not contingent upon the reporting of a predetermined value or direction in value that favours the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event (such as a lending proposal or sale negotiation).

We hereby certify that the valuers undertaking these valuations are authorised to practise as valuers and have at least 15 years continuous experience in valuation.

Yours sincerely CBRE Pte. Ltd.

Danny Mohr AAPI MRICS Lim Khee Boon (Est.Mgt) Hons MSISV Registered Valuer Appraiser’s Licence No. AD04-2004195E Executive Director Director International Valuation, Asia International Valuation, Asia

Appendices Valuation Certificate Assumptions, Disclaimers, Limitations & Qualifications

Page 7 C-7

APPENDICES

C-8 International Valuation, Asia

CBRE Pte. Ltd.

Valuation Certificate

Property: Parcel A Proposed Commercial Development (Chengdu HSR) Chengdu, Sichuan Province, The People's Republic of China

Client: Perennial China Retail Trust Management Pte. Ltd. (As Trustee-Manager of Perennial China Retail Trust) Purpose: Acquisition and Corporate Finance

Interest Valued: Leasehold interest which will expire on 2030 February June 2051. 2051. Balance term term is 39.30is 39.50 years. years. Basis of Valuation: Market value on a "As if completed and fully leased" Basis Land Area: 48,221.648,273.0 sqm sqm Land Use Rights: Commercial Brief Description: The proposed Chengdu Longemont Mall is situated in Chenghua District within the Third Ring Road of South-East Chengdu, Sichuan province, China. The mall is located adjacent to Chengdu East High-Speed Railway (“HSR”) Station, a newly- constructed transportation hub comprising the inter-city high-speed railway, Chengdu city’s intra-city subway and long and short distance bus station. The mall is expected to be directly connected to the adjacent HSR via its basement level, providing good accessibility to and from the transportation hub. The subject property is expected to offer a variety of retail and entertainment options targeted at the middle-income, including a supermarket, an amusement park, local and international fashion retailers and Food and Beverage outlets. The Chengdu Longemont Mall is expected to commence operations in 3Q 2014.

NLA (sqm) 255,255.00 GRA (sqm) 364,650.00 GFA (sqm) 455,260.00

General Comment: China’s economy registered a slowdown in expansion in 2011 after the strong economic growth of 10.3% in 2010. The third quarter of 2011 saw economic growth of 9.1% year-on-year, the weakest growth since 2009, resulting from external economic pressure from the global debt uncertainty surrounding the Eurozone and nominal economic growth in the U.S., as well as inflation, monetary pressure and weaker export domestically. The retail sector appears to be less affected by the current economic climate with the retail investment growth rate rising continually since 2008. China retail property investment has been growing at an average annual rate of more than 20% over the past decade until the end of 2010, while high-end department store retail sales have also registered strong growth averaging 15% to 18% in 2010 as a result of strong domestic demand. Overall, the outlook of China’s economy remains favourable to the property market over the short term as the RMB is expected to continue its gradual but steady upward trend to counter the negative impacts of declining export growth and domestic inflationary pressure.

Valuation Approaches: Capitalisation Approach & Direct Comparision Method Date of Valuation: 31 October 2011

Assessed Value (RMB): ¥ 5,688,000,000 (Renminbi Five Billion Six Hundred and Eighty-Eight Million)

Assumptions, This valuation report is provided subject to the assumptions, qualifications, limitations and disclaimers detailed throughout Disclaimers, this report which are made in conjunction with those included within the Assumptions, Qualifications, Limitations & Limitations & Disclaimers section located within this report. Reliance on this report and extension of our liability is conditional upon the Qualifications reader’s acknowledgement and understanding of these statements. This valuation is for the use only of the party to whom it is addressed and for no other purpose. No responsibility is accepted to any third party who may use or rely on the whole or any part of the content of this valuation. The valuer has no pecuniary interest that would conflict with the proper valuation of the property.

Prepared By: CBRE Pte. Ltd.

Per: Danny Mohr AAPI MRICSP er: Lim Khee Boon BSc (Est. Mgt) Hons MSISV Registered Valuer Appraiser's Licence, No. AD041-2004195E Executive Director Director International Valuation, Asia International Valuation, Asia

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CBRE Pte. Ltd.

Assumptions, Disclaimers, Limitations & Qualifications

Valuation Subject Premise 1- Real estate values vary from time to time in response to changing market circumstances and it should, therefore, be noted that this To Change: valuation is based on available information as at the date of valuation. No warranty can be given as to the maintenance of this value into the future. It is, therefore, recommended that the valuation be reviewed periodically.

Our Investigations: Premise 2 - This valuation is conducted on the basis that we are not engaged to carry out all possible investigations in relation to the property. We have identified certain limitations to our investigations to enable you to instruct further investigations if you consider this appropriate. CBRE is not liable for any loss occasioned by a decision not to instruct further investigations.

Assumptions: Premise 3 - Assumptions are a necessary part of this valuation. CBRE adopts assumptions because some matters are not capable of accurate calculation, or fall outside the scope of our expertise, or our instructions. The risk that any of the assumptions adopted in this document may be incorrect should be taken into account. CBRE does not warrant or represent that the assumptions on which this valuation is based are accurate or correct.

Information Premise 4 - This document contains a significant volume of information which is directly derived from other sources, without verification by us Supplied By including, but not limited to tenancy schedules, planning documents and environmental or other expert reports. We confirm that we are not Others: instructed to verify that information. Further, the information is not adopted by CBRE as our own, even where it is used in our calculations. Where the content of this document has been derived, in whole or in part, from sources other than CBRE, CBRE does not warrant or represent that such information is accurate or correct.

Future Matters: Premise 5 - To the extent that this document includes any statement as to a future matter, that statement is provided as an estimate and/or opinion based on the information known to CBRE at the date of this document. CBRE does not warrant that such statements are accurate or correct. If any of the assumptions are found to be incorrect, or if the party on whose instructions this valuation is provided wishes our valuation to be based on different assumptions, this valuation should be referred back to CBRE for comment and, in appropriate cases, amendment.

Site Details: Premise 6 - A current survey has not been provided. This valuation is made on the basis that there are no encroachments by or upon the property and this should be confirmed by obtaining a current survey report and/or advice from a registered surveyor. If any encroachments are noted by the survey report, we should be consulted to reassess any effect on the value stated herein.

Property Title: Premise 7 - We have been provided with a brief title search only. We have therefore not perused the original title/lease documentation. We have assumed that there are no further easements or encumbrances not disclosed by this brief title search which may affect market value. However, in the event that a comprehensive title search is undertaken which reveals further easements or encumbrances, we should be consulted to reassess any effect on the value stated herein.

Environmental Premise 8 - In the absence of an environmental site assessment relating to the subject property, we have assumed that the site is free of elevated Conditions: levels of contaminants. Our visual inspections of the subject property and immediately surrounding properties revealed no obvious signs of site contamination. Furthermore, we have made no allowance in our valuation for site remediation works. However, it is important to point out that our visual inspection is an inconclusive indicator of the actual condition of the site. We make no representation as to the actual environmental status of the subject property. If a test is undertaken at some time in the future to assess the degree, if any, of contamination of the site and this is found to be positive, we reserve the right to review our valuation assessed herein, should we deem it to be necessary.

Town Planning/ Premise 9 - The information relating to town planning is as reflected on the Land Use Rights Certificate provided and is assumed to be accurate. In Land Use Right: the event that a legal requisition is obtained and the information therein is found to be materially different to the town planning/land use rights information detailed within this report, we reserve the right to amend the advice provided herein. We were not advised of any road widening or other adverse planning proposals affecting the property. However, in the event that a search is undertaken which reveals that the property is affect by public scheme(s), we should be consulted to reassess any effect on the value stated herein.

Floor Areas: Premise 10 - We have assumed that the floor areas have been calculated in accordance with the prevailing guidelines and legal requirements. In the event that there is a material variance in areas, we reserve the right to review our valuation as assessed herein.

Inclusions & Premise 11 - Our valuation includes those items that form part of the building service installations such as heating and cooling equipment, lifts, Exclusions: sprinklers, lighting, etc., that would normally pass with the sale of the property, but excludes all items of plant, machinery, equipment, partitions, furniture and other such items which may have been installed (by the occupant) or are used in connection with the business/businesses carried on within the property.

Condition & Premise 12 - We have inspected the building. However, we advise that we have not carried out a structural survey nor tested any of the services or Repair: facilities and are therefore unable to state that these are free from defect. We advise that we have not inspected unexposed or inaccessible portions of the building and are therefore unable to state that these are free from rot, infestation, asbestos or other hazardous material. We have, however, viewed the general state of repair of the property and advised that we did not notice any obvious signs of structural defect or dilapidations. Furthermore, the property appears to be in reasonable condition having regard to its age and use unless otherwise stated. Our valuation assumes that a detailed report of the structure and service installations of the building would not reveal any defects requiring significant expenditure. Additionally, we assume that the building complies with all relevant statutory requirements in respect of matters such as health, building and fire safety regulations.

C-10 Valuation of a Commercial Property to be

Developed in Chengdu, Sichuan Province, the

People’s Republic of China

DECEMBER 2011

PREPARED BY: TO: Flora He Perennial China Retail Trust Management Pte. Dongbao Xu Ltd (as Trustee-Manager of Perennial China Retail Trust)

C-11 Colliers International (Hong Kong) Ltd MAIN +86 10 8518 1633 Valuation & Advisory Services FAX +86 10 8518 1638 Company Licence No: C-006052 EMAIL [email protected] Suite 5701 Central Plaza 18 Harbour Road Wanchai Hong Kong

OUR REF: 20300 2 DECEMBER 2011

Perennial China Retail Trust Management Pte. Ltd (as Trustee-Manager of Perennial China Retail Trust) 6 Temasek Boulevard, #25-04/05, Suntec Tower Four, Singapore

For the attention of:

Dear Sir/Madam,

Re: ACOMMERCIAL PROPERTY TO BE DEVELOPED IN EAST OF JINXIU AVENUE,CHENGHUA DISTRICT,CHENGDU CITY,SICHUAN PROVINCE, THE PEOPLE’S REPUBLIC OF CHINA (THE “PROPERTY”)

INSTRUCTIONS

Instructions have been received from Perennial China Retail Trust Management Pte. Ltd (as Trustee- Manager of Perennial China Retail Trust) (the “Client”) to conduct a valuation of the Property as at 30 November 2011 (the “date of valuation”) for investment purposes.

BASIS OF VALUATION

Our valuation of the Property represents the Market Value which we would define as “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.”

The instruction from the client is to provide the opinion of market value as at the valuation date of the remaining leasehold interest in the Property on a “as if completed and fully leased” basis. Further, it is requested from the client to provide a future value estimation of the Property value in 2014, assuming an appropriate tenancy mix and lease negotiations to achieve the full income potential of the Property.

VALUATION STANDARDS

The valuation has been carried out in accordance with the RICS Valuation Standards (7th Edition) published by the Royal Institution of Chartered Surveyors and HKIS Valuation Standards on Properties published by the Hong Kong Institute of Surveyors.

COLLIERS INTERNATIONAL (HONG KONG)LIMITED PAGE 2 Valuation of a Commercial Property to be Developed in Chengdu, Sichuan Province, PRC

C-12 VALUATION RATIONALE

We have valued the Property using the Direct Capitalisation Approach and the Direct Comparison Approach.

The Direct Capitalisation Approach estimates the values of the properties on an open market basis by capitalising net rental income on a fully leased basis having regard to the current passing rental income from existing tenancies and potential future reversionary income at the market level. In calculating the net rental income, no deduction has been made from the net passing rental income which is exclusive of any property management fee.

The Direct Comparison Approach estimates the value of the Property’s interest by comparing recent sales of similar interests located in the surrounding area. By analysing sales which qualify as ‘arms- length’ transactions between willing buyers and sellers, market value indicators and price trends can be identified and recent sales evidence is available.

ASSUMPTIONS AND CAVEATS

Our valuations have been made on the assumption that the owners sell the Property on the open market without the benefit of deferred terms contracts, leasebacks, joint ventures, management agreements or any similar arrangements which would serve to affect the value of the Property.

No allowance has been made in our valuations for any charges, mortgages or amounts owing on the Property nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the Property is free from encumbrances, restrictions and outgoings of an onerous nature which could affect their values.

We have conducted the valuation assuming:

the information of the Property provided by the Client is true and correct;

the site is free from contamination and the ground conditions are satisfactory;

the proper ownership title of the Property has been obtained, all payable land premium or land use rights fees have been fully settled;

all required approvals and certificates necessary for the development and occupation and use of the Property have been duly obtained and are in full force and effect; and

the Property can be freely transferred, mortgaged, sublet or otherwise disposed of in the market.

This valuation report is subject to our standard Assumptions and Caveats in the appendix.

SOURCE OF INFORMATION

We have relied on the information provided by the Client and have accepted advice given to us on matters such as the development scheme of the Property and all other relevant matters. Dimensions, measurements and areas included in the valuation certificate are based on information provided to us by the Client.

COLLIERS INTERNATIONAL (HONG KONG)LIMITED PAGE 3 Valuation of a Commercial Property to be Developed in Chengdu, Sichuan Province, PRC

C-13 TITLE DOCUMENTS

We have made assumptions that the proper ownership title of the Property has been obtained and that all payable land premium or land use rights fees have been fully settled.

SITE MEASUREMENT

We have not carried out detailed site measurements to verify the correctness of the site area in respect of the Property but have assumed that the site area information provided to us is correct. All documents and contracts have been used as reference only and all dimensions, measurements and areas are approximations.

SITE INSPECTION

We have done site inspection for the valuation, but we have not carried out investigations to determine the suitability of the ground conditions and the service etc for any future development. Our valuations have been prepared on the assumption that these aspects are satisfactory. We are not, however, able to report whether the Property are is free of rot, infestation or any other structural defects. No tests were carried out on any of the services.

NON-PUBLICATION CLAUSES

We have prepared this report on the instructions of PCRT for the purpose of inclusion in the circular to unitholders of PCRT (the “Purpose”). We expressly disclaim any liability to any party who relies or purports to rely on this report for any purpose whatsoever (other than the Purpose).

Finally and in accordance with our standard practice, we must state that this report is for the use only of the party to whom it is addressed and no responsibility is accepted to any third party for the whole or any part of its contents.

Our valuation certificate is attached.

Yours faithfully, For and on behalf of Colliers International (Hong Kong) Ltd

Flora He David Faulkner MRICS MCOMFIN BSc(Hons) FRICS FHKIS RPS(GP) MAE Associate Director Executive Director Valuation and Advisory Services Valuation and Advisory Services

COLLIERS INTERNATIONAL (HONG KONG)LIMITED PAGE 4 Valuation of a Commercial Property to be Developed in Chengdu, Sichuan Province, PRC

C-14 VALUATION CERTIFICATE

OPINION OF MARKET VALUE AS IF PARTICULARS COMPLETED AT 30 PROPERTY DESCRIPTION AND TENURE OF OCCUPANCY NOVEMBER 2011 A Commercial The Property to be developed (The Chengdu At the time of RMB5,790,000,000 Property to be Longemont Mall) is sited in Chenghua District our inspection, Developed in East within the Third Ring Road of South-East the Property is a Unit Consideration: of Jinxiu Avenue, Chengdu, Sichuan Province, China. The parcel of vacant RMB12,700per sq m Chenghua District, Property is strategically located adjacent to and land. (Average based on a Chengdu City, will be directly-connected via its basement level total gross floor area of 455,260.00 sq m) Sichuan Province, to the operational Chengdu East High-Speed PRC Railway (“HSR”) Station, a newly-built major transportation hub comprising the inter-city high-speed railway.

We have been provided with information of a set of undated development schematic plans together with a floor area schedule of the Property. According to the plan, the Property will be built as a retail building comprising an 8- storey aboveground portion erected on a 4- storey underground portion with a total gross floor area of approximately 455,260.00 sq m. The detailed information of area distribution by levels is listed below:

Approximate Use Gross floor area (sq m)

Retail (B2-L8) 364,650.00 Car Park (B4-B3) 90,610.00 Total 455,260.00 As advised, the construction work of the Property will start in 2012 and the target commencement of operation of the Property is in third quarter 2014.

As advised by the Client, the land use rights of the Property will have been granted for a term of 40 years for commercial use.

Notes:

1) We have not been provided any ownership titles of the Property by the Client and we have made assumptions that the proper ownership title of the Property has been obtained, all payable land premium or land use rights fees have been fully settled.

2) The extrapolated estimation of the Property value as at 2014 is RMB6,900,000,000, and the unit consideration is RMB15,200 per sq m, which is an average amount on a gross floor area basis. COLLIERS INTERNATIONAL (HONG KONG)LIMITED PAGE 5 Valuation of a Commercial Property to be Developed in Chengdu, Sichuan Province, PRC

C-15 CAVEATS AND ASSUMPTIONS

1. DEFINITIONS In these Caveats and Assumptions the following words or phrases shall have the meaning or meanings set out below: ‘Confidential Information’ means information that: (a) Is by its nature confidential. (b) Is designed by Us as confidential. (c) You know or ought to know is confidential. (d) Includes, without limitation: information comprised in or relating to any of Our intellectual property in the Services or any reports or certificates provided as part of the Services. ’Currency Date’ means, in relation to any valuation report, the date as at which our professional opinion is stated to be current. ‘Fee’ means the amount agreed to be paid for the Services as set out in the Quotation. ‘Parties’ means You or Us as the context dictates. ‘Quotation’ means the written quote provided by Us in relation to the Services. ‘Services’ means the valuation services provided pursuant to these Terms and Conditions and the Quotation, and includes any documents, reports or certificates provided by Us in connection with the Services. ‘The Property’ means the assets which are subject of our appointment as your advisor. ‘We’, ‘Us’, ‘Our’, ‘Colliers’ means Colliers International Limited. ‘You’, ‘Your’, ‘Client’ means the person, company, firm or other legal entity by or on whose behalf instructions are given, and any person, firm, company or legal entity who actually gave the instructions to us even though such instructions were given as agent for another. ‘Professional Property Practice Standards’ refers to RICS Valuation and Appraisal Handbook, or appropriate standards.

2. PERFORMANCE OF SERVICES 2.1 We have provided the Services in accordance with: (a) The Terms and Conditions contained herein; or (b) As specifically instructed by You for the purpose of the Services; and (c) Within the current provisions set by the prevailing Professional Property Practice Standards.

3. CONDITION OF THE PROPERTY 3.1 No allowance has been made in our report for any charges, mortgages or amounts owing on any of the properties valued nor for any expenses or taxation which may be incurred in effecting a sale. We have assumed that the Property is free from and clear of any and all charges, liens and encumbrances of an onerous nature likely to affect value, whether existing or otherwise, unless otherwise stated. We assume no responsibility for matters legal in nature nor do we render any opinion as to the title which is assumed to be good and marketable. We are not aware of any easements or rights of way affecting the property and our valuation assumes that none exists. 3.2 We have assumed that the Property has been constructed, occupied and used in full compliance with, and without contravention of, all ordinances, except only where otherwise stated. We have further assumed that, for any use of the Property upon which this report is based, any and all required licences, permits, certificates, and authorisations have been obtained, except only where otherwise stated. 3.3 We have assumed that any development sites are in a condition suitable for development; this has not been checked by us. 3.4 We have not carried out detailed site measurements to verify the correctness of the site areas in respect of the properties but have assumed that the site areas shown on the documents and official site plans handed to us are correct. All documents and contracts have been used as reference only and all dimensions, measurements and areas are approximations. No on- site measurement has been taken. 3.5 We have assumed that there is no timber infestation, asbestos or any other defect (unless advised otherwise) and that the property is compliant with all relevant environmental laws. It is Your responsibility to provide reports to Us that are relevant to these issues. 3.6 An internal inspection has been made; no detailed on site measurements have been taken.

COLLIERS INTERNATIONAL (HONG KONG)LIMITED PAGE 6 Valuation of a Commercial Property to be Developed in Chengdu, Sichuan Province, PRC

C-16 3.7 While due care is exercised in the course of our inspection to note any serious defects, no structural survey of the Property will or has been undertaken, and We will not (and are not qualified to) carry out a structural, geotechnical or environmental survey. We will not inspect those parts of the property that are unexposed or inaccessible. 3.8 None of the services have been tested by Us and we are unable therefore to report on their present condition, but will presume them to be in good working order. 3.9 We have not undertaken a detailed inspection of any plant and equipment or obtained advice on its condition or suitability. 3.10 We recommend that You engage appropriately qualified persons to undertake investigations excluded from our Services. 3.11 No responsibility will be accepted either to You or to any third party for loss or damage that may result directly or indirectly from the condition of the property.

4. ENVIRONMENT AND PLANNING 4.1 We have obtained only verbal town planning information. It is your responsibility to check the accuracy of this information by obtaining a certificate under the appropriate legislation. 4.2 We do not hold ourselves to be experts in environmental contamination. Unless otherwise stated, our inspection of the site did not reveal any contamination or pollution affectation, and our valuation has been prepared on the assumption that that the land is not contaminated and has not been affected by pollutants of any kind. We would recommend that that this matter be checked by a suitably qualified environmental consultant. Should subsequent investigation show that the site is contaminated, our valuation may require revision.

5. BUILDING AREAS AND LETTABLE AREAS 5.1 Where a survey is provided to Us for consideration, We will assume that information contained in the survey is accurate and has been prepared in accordance with the prevailing Professional Property Practice Standards. 5.2 If you do not provide Us with a survey, We will estimate building and/or lettable areas based only upon available secondary information (including but not limited to building plans, deposited plans, and our own measurements). Such estimates do not provide the same degree of accuracy or certainty as would be provided by a survey prepared by an appropriately qualified professional in accordance with the prevailing Professional Property Practice Standards. 5.3 Where such a survey is subsequently produced which differs from the areas estimated then You will refer the valuation back to Us for comment or, where appropriate, amendment.

6. OTHER ASSUMPTIONS 6.1 Unless otherwise notified by You, We will assume: (a) There are no easements, mortgages, leases, encumbrances, covenants, caveats, rights of way or encroachments except those shown on the Title. (b) All licences and permits can be renewed and We have not made any enquires in this regard. 6.2 Where third party expert or specialist information or reports are provided to Us or obtained by Us in connection with Services (including but not limited to surveys, quantity surveyors reports, environmental audits, structural/ dilapidation reports), we will rely upon the apparent expertise of such experts/ specialists. We will not verify the accuracy of this information or reports, and assume no responsibility for their accuracy. 6.3 Our services are provided on the basis that the client has provided us with a full and frank disclosure of all information and other facts which may affect the service, including all secrecy clauses and side agreements. We accept no responsibility or liability whatsoever for the valuation unless such a full disclosure has been made. 6.4 Any plans, sketches or maps included in this report are for identification purposes only and should not be treated as certified copies of areas or other particulars contained therein. 6.5 The study of possible alternative development options and the related economics are not within the scope of this report. 6.6 Our opinion about the Market Value of the property is free from any influence and/ or point of views of any other parties.

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C-17 7. VALUATION FOR FIRST MORTGAGE SECURITY 7.1 Where the Services are provided for mortgage purposes, You agree that You will not use the valuation report where the property: (a) Is used as security other than by first registered mortgage; (b) Is used as part of a group of securities (except where the property forms part of a trust); or (c) Is used as security for more than one loan. 7.2 We reserve the right, at Our absolute discretion, to determine whether or not to assign Our valuation to any third party. Without limiting the extent of Our discretion, We may decline a request for assignment where: (a) The proposed assignee is not a major recognised lending institution (such as a major bank); (b) The assignment is sought in excess of 3 months after the date of valuation; (c) We consider that there has been a change in conditions which may have a material impact on the value of the property. (d) The proposed assignee seeks to use the valuation for an inappropriate purpose (including in a manner inconsistent with Your agreement at Clause 7.1); or (e) Our fee has not been paid in full. 7.3 Where we decline to provide an assignment on either of the basis at 7.2(b) or (c), we may be prepared to provide an updated valuation on terms to be agreed at that time. 7.4 In the event that You request Us to assign Our valuation and We agree to do so, You authorize Us to provide to the assignee a copy of these Terms and Conditions, the Quotation and any other document, including instructions provided by You, relevant to the scope of Our Services.

8. ESTIMATED SELLING PRICE 8.1 Where you instruct Us to provide an Estimated Selling Price, You agree that the Services: (a) Are limited to the provision of an opinion based on Our knowledge of the market and informal enquiries. (b) We are not required to carry out a full inspection of the property; any inspection of comparable properties; a search of Title(s) or other enquiries as to encumbrances, restrictions or impediments on Title(s); or other investigations which would be required for a formal valuation. (c) Provide an indicative figure only which is not suitable for use for any purpose other than as general information or guide as to sale expectations. It is not suitable to be relied upon for the purpose of entry into any transaction. 8.2 No responsibility will be accepted either to You or to any third party for loss or damage that may result from the issue of such an Estimated Selling Price.

9. CURRENCY OF VALUATION 9.1 Due to possible changes in market forces and circumstances in relation to the property the Services can only be regarded as relevant as at the Currency Date. 9.2 Where You rely upon Our valuation report after the Currency Date, You accept the risks associated with market movements between the Currency Date and the date of such reliance. 9.3 Without limiting the generality of 9.2, You should not rely upon Our valuation: (a) After the expiry of 3 months from the Currency Date; (b) Where circumstances have occurred during that period which may have a material effect on the value of the property or the assumptions or methodology used in the valuation report.

10. MARKET PROJECTIONS 10.1 Any market projections incorporated within our Services including, but not limited to, income, expenditure, associated growth rates, interest rates, incentives, yields and costs are projections only and may prove to be inaccurate. Accordingly, such market projections should be interpreted as an indicative assessment of potentialities only, as opposed to certainties. 10.2 Where Our Services include market projections such projections require the dependence upon a host of variables that are highly sensitive to varying conditions. Accordingly, variation in any of these conditions may significantly affect these market projections. 10.3 Where market projections form part of Our Services, We draw your attention to the fact that there will be a number of variables within acceptable market parameters that could be pertinent to Our Services and the projections adopted are representative of only one of these acceptable parameters.

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C-18 11. YOUR OBLIGATIONS 11.1 You warrant that the instructions and subsequent information supplied by You contain a full and frank disclosure of all information that is relevant to Our provision of the Services. 11.2 You warrant that all third party expert or specialist reports provided to Us by You for the purpose of Us providing the Services are provided with the authority of the authors of those reports. 11.3 You authorise and license Us to incorporate Your intellectual property within Our report(s). 11.4 You will not release any part of Our valuation report or its substance to any third party without Our written consent. Such consent will be provided at Our absolute discretion and on such conditions as We may require including that a copy of these Terms and Conditions be provided to such third party. This clause shall not apply to persons noted as recipients in Your prior instruction to Us or in the Quotation provided that You shall provide any such recipient with a copy of these Terms and Conditions. 11.5 We reserve the right to reconsider or amend the valuation advice, or the Fee set out in Our Quotation to You, if; (a) Certificates, surveys, leases, side agreements or related documentation that were not provided to Us prior to the provision of the Services are subsequently provided, and contain matters that may affect the value of the advice; or (b) Where subsequent site inspections made in relation to any of the matters raised in Clause 3 materially affect or may alter the value of the property, the subject of the Services. 11.6 If You release any part of the valuation advice or its substance without written consent, You agree: a) to inform the other person of the terms of our consent; and b) to compensate Us if You do not do so. We have no responsibility to any other person even if that person suffers damage as a result of any other person receiving this valuation.

12. CONFIDENTIALITY 12.1 This report and each part of it is prepared and intended for the exclusive use of the Client for the sole purpose outlined in Our agreement for internal reference purposes, and in accepting this report, the Client expressly agrees not to use or rely upon this report or any part of it for any other purpose. No person other than the Client shall use or rely upon this report or any part of it for any purpose unless we have given Our express written consent. Similarly neither the whole nor any part of this report nor any reference there to may be included in any document, circular or statement nor published in any way without our written approval of the form and context in which it may appear. 12.2 If consent to disclose the Confidential Information is provided by Us, You agree to abide by any additional terms and conditions that We may apply to that disclosure. 12.3 You agree that You will indemnify, hold harmless and defend Us from and against any and all loss, liability, costs or expenses (including but not limited to professional or executive time) We may suffer or reasonably incur, directly or indirectly, as a result of a breach of this clause. 12.4 Unless otherwise directed in writing by Client, Colliers International retains the right to include references to the Services in its promotional material. Such references shall not contain confidential material.

13. PRIVACY 13.1 We may obtain personal information about You in the course of performing Our Services. We respect your privacy and advise You that we will only obtain information that is necessary to assist us in the course of performing Our Services. If it is necessary for Us to engage third parties, we will inform these parties that they are not to disclose any personal information about You to any person or organisation other than Us.

14. SUBCONTRACTING 14.1 We may sub-contract or otherwise arrange for another person to perform any part of the Services or to discharge any of Our obligations under any part of these Terms and Conditions, with Your consent.

15. LIMITATION OF COLLIERS LIABILITY 15.1 To the extent permissible under applicable laws, in no event shall Colliers International be liable to Client or anyone claiming by, through or under Client, including insurers, for any lost, delayed, or diminished profits, revenues, production, business, use or opportunities, or any incidental, special, indirect, or economic losses, wasted costs, diminution of value or consequential damages, of any kind or nature whatsoever, however caused.

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C-19 15.2 All the costs and benefits forecasted will, ultimately, be determined by future market conditions. Forecasts of these elements are based on assumptions of certain variable factors, which, in turn, are extremely sensitive to changes in the market and economic contexts. For this reason, the figures mentioned in this report were not computed under any known or guaranteed conditions. Rather, these are forecasts drawn from reliable sources of data and information and made in the best judgment and professional integrity of Colliers International. Notwithstanding this, Colliers International reiterates that it will not accept any responsibilities in the face of damage claims that might result from any error, omission or recommendations, viewpoints, judgments and information provided in this report. 15.3 Colliers International, or any employee of Ours shall not be required to give testimony or to appear in court or any other tribunal or to any government agency by reason of this valuation report or with reference to the property in question unless prior arrangements have been made and we are properly reimbursed. 15.4 We are free from any possible legal and/ or non-legal issue which may attach to the Property’s title documents.

16. ENTIRE AGREEMENT 16.1 No further agreement, amendment or modification of these Terms and Conditions shall be valid or binding unless made in writing and executed on behalf of the Parties by their duly authorised officers. 16.2 If there is inconsistency between these Terms and Conditions and the Quotation, any letter of instruction from You, or other specific request or information shall prevail to the extent of the inconsistency.

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C-20 APPENDIX – I

LOCATION PLAN OF THE PROPERTY

C-21 LOCATION PLAN

FOR IDENTIFICATION PURPOSE ONLY

C-22 APPENDIX – II

PHOTOS OF THE PROPERTY

C-23 Southern Boundary – Yalongjiang Road Northern Boundary – Bailongjiang Road

Eastern Boundary – Longquanshan Road Western Boundary – Jinxiu Avenue

Existing Status of the Property

C-24 CONTACT DETAILS Tel: 852 2822 0525

Colliers International (Hong Kong) Ltd Valuation & Advisory Services Company Licence No: C-006052

Suite 5701 Central Plaza 18 Harbour Road Wanchai Hong Kong www.colliers.com/hk

C-25 This page has been intentionally left blank. APPENDIX D CHENGDU RETAIL MARKET REVIEW BY THE INDEPENDENT PROPERTY CONSULTANT

Chengdu East Railway Station Commercial Development

Retail Market Review

December 2011

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DISCLAIMER This report is prepared on the instructions of the party to whom or which it is addressed and is thus not suitable for use other than by that party. As the report involves future forecasts, it can be affected by a number of unforeseen variables. It represents for the party to whom or which it is addressed the best estimates of Urbis Pty Ltd, but no assurance is able to be given by Urbis Pty Ltd that the forecasts will be achieved.

URBIS STAFF RESPONSIBLE FOR THIS REPORT WERE:

Director Peter Holland Associate Director Jack Backen Senior Consultant Zoe Crampton Job Code MPEA-0062

xdisclaimerx

All Rights Reserved. No material may be reproduced without prior permission. While we have tried to ensure the accuracy of the information in this publication, the Publisher accepts no responsibility or liability for any errors, omissions or resultant consequences including any loss or damage arising from reliance in information in this publication.

URBIS Australia Asia Middle East urbis.com.au

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TABLE OF CONTENTS

Introduction ...... 1

1 Overview of the Chinese Economy ...... 3 1.1 Regional Context & Background ...... 3 1.2 System of Government & Political Background ...... 4 1.3 Economic Transformation in China ...... 4 1.4 Recent Economic Trends ...... 5 1.5 Quantitative Analysis of GDP Trends & Forecasts ...... 7 1.6 Retail Sales ...... 10 1.7 Inflation ...... 12 1.8 Population Characteristics ...... 12 1.9 Income Growth & the Chinese Middle Class ...... 14

2 Overview of the Retail Property Sector ...... 16 2.1 General Overview of the Chinese Retail Market ...... 16 2.1.1 Emergence & Evolution of Shopping Centres in China ...... 16 2.2 Heterogeneity of Shopping Centres ...... 16 2.3 Key Retail Players & Competitors as Consumption Patterns Evolve ...... 18 2.4 Retail Floorspace Estimates ...... 19 2.4.1 Shopping Centre Floorspace Per Capita ...... 19 2.4.2 Other Retail Floorspace Per Capita ...... 20 2.5 Key Cities & Growth Areas for Retail ...... 20 2.6 Future Development Trends ...... 22 2.7 Barriers to Entry for Foreign Investors ...... 22 2.8 General Outlook & Potential Opportunities ...... 23

3 Chengdu Economy ...... 24 3.1 Overview of the Chengdu Economy ...... 24 3.1.1 Regional Context & Background ...... 24 3.1.2 Macro Economy ...... 26 3.1.3 GDP Growth Trends & Forecasts ...... 27 3.1.4 Inflation ...... 28 3.1.5 Retail Sales ...... 28 3.1.6 Population Trends & Key Demographics ...... 30 3.1.7 Economic Outlook ...... 31

4 Chengdu Retail Property Market ...... 32 4.1.1 Major Retail Areas ...... 32 4.1.2 Shopping Mall Developers & Major Retailers ...... 36 4.1.3 Supply of Prime Retail, Current & Future ...... 38 1. Shopping Mall Supply Forecasts ...... 38 4.2 Chengdu Retail Market Performance ...... 41 4.2.1 Retail Rentals ...... 41 4.2.2 Investment Yields & Capital Value ...... 43 4.2.3 Occupancy Rate ...... 43 4.3 Future Trends & Market Outlook ...... 44 4.3.1 Shopping Malls Coming of Age ...... 44 4.3.2 Department Stores Expansion Plans ...... 44 4.3.3 Retailer Driven Development Plans ...... 44 4.3.4 Expansion into the Suburbs...... 44 4.3.5 Future Market Outlook ...... 44

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5 Chengdu Longemont Railway Commercial Development ...... 45 5.1 Chengdu East Village ...... 45 5.1.1 Chengdu East Railway Station ...... 45 5.2 Location & Accessibility of Chengdu Longemont Railway Commercial Development ...... 45 5.3 Description of the Property ...... 46

6 Trade Area Analysis ...... 48 6.1 Trade Area Definition ...... 48 6.2 Trade Area Population & characteristics ...... 49 6.3 Trade Area Retail Expenditure ...... 53 6.4 Tourism Spending Market ...... 55

7 Competition ...... 56 7.1 Major Retail Precincts ...... 56 7.2 Shopping Centre Competition – Current ...... 56 7.3 Shopping Centre Competition – Future ...... 59

8 Concluding Comments ...... 63

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Introduction

Perennial China Retail Trust Management Pte. Ltd. (as Trustee-Manager of Perennial China Retail Trust (“PCRT”)) commissioned Urbis to conduct an independent review of the Chengdu retail property market for the purpose of inclusion in the circular to be issued to the unitholders of PCRT in connection with its investment in a landholding next to the Chengdu East High Speed Railway Station. The report has been prepared by Urbis Pty Ltd (“Urbis”) with assistance provided by Cushman & Wakefield and Global Demographics.

Throughout this report we refer to the subject site as the ‘Longemont Site’, and the shopping centre to be built on the Longemont Site as the ‘Longemont Centre’.

The report provides a general overview of the retail sector in China and Chengdu, as well as a more detailed review of the retail market in which the Longemont Centre will operate.

SOURCES OF INFORMATION In conducting this study we have referred to the following sources:

China Statistics Yearbook, 2011.

Chengdu Statistics Yearbook, 2011.

Preliminary results from China’s 2010 Census.

Demographic and income data provided by Global Demographics, an international demographic forecasting specialist.

Retail market data provided by Cushman & Wakefield.

Various Chengdu retail market snapshots produced by international agencies.

IMF and World Bank economic data.

FORMAT OF THE REPORT The report is made up of the following sections:

Section 1 – outlines the recent and projected performance of China with reference to the key economic measures including population, GDP growth, inflation and retail sales. Section 2 – provides an overview of the China retail property market including consideration of the emergence and evolution of shopping centres in China; the key players and competitors; the key cities and growth areas for retail; barriers to entry for foreign investors; future development trends and the overall market outlook for this sector. Section 3 – examines the Chengdu economy, providing the context in which to consider the future development of the retail sector. Section 4 – considers the key attributes of the Chengdu retail market, including major retail precincts, supply of shopping centres, shopping centre performance, and future market development. Section 5 – gives a brief description of the Longemont Site and Centre. Section 6 – provides a description of the likely trade area to be served by the Longemont Centre and outlines population and retail expenditure estimates. Section 7 – examines the current and future competitive environment in which the Longemont Centre will operate.

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DISCLAIMER This report is dated 27 October 2011 and incorporates information and events up to that date only and excludes any information arising, or event occurring, after that date which may affect the validity of Urbis Pty Ltd’s (Urbis) opinion in this report. Urbis prepared this report on the instructions, and for the benefit only, of PCRT (Instructing Party) for the purpose of providing background information for potential investors (Purpose) and not for any other purpose or use. Urbis expressly disclaims any liability to the Instructing Party who relies or purports to rely on this report for any purpose other than the Purpose and to any party other than the Instructing Party who relies or purports to rely on this report for any purpose whatsoever (including the Purpose).

In preparing this report, Urbis was required to make judgements which may be affected by unforeseen future events including wars, civil unrest, economic disruption, financial market disruption, business cycles, industrial disputes, labour difficulties, political action and changes of government or law, the likelihood and effects of which are not capable of precise assessment.

All surveys, forecasts, projections and recommendations contained in or made in relation to or associated with this report are made in good faith and on the basis of information supplied to Urbis at the date of this report. Achievement of the projections set out in this report will depend, among other things, on the actions of others over which Urbis has no control.

Urbis has made all reasonable inquiries that it believes is necessary in preparing this report but it cannot be certain that all information material to the preparation of this report has been provided to it as there may be information that is not publicly available at the time of its inquiry.

In preparing this report, Urbis may rely on or refer to documents in a language other than English which Urbis will procure the translation of into English. Urbis is not responsible for the accuracy or completeness of such translations and to the extent that the inaccurate or incomplete translation of any document results in any statement or opinion made in this report being inaccurate or incomplete, Urbis expressly disclaims any liability for that inaccuracy or incompleteness.

This report has been prepared with due care and diligence by Urbis and the statements and opinions given by Urbis in this report are given in good faith and in the belief on reasonable grounds that such statements and opinions are correct and not misleading bearing in mind the necessary limitations noted in the previous paragraphs. Further, no responsibility is accepted by Urbis or any of its officers or employees for any errors, including errors in data which is either supplied by the Instructing Party, supplied by a third party to Urbis, or which Urbis is required to estimate, or omissions howsoever arising in the preparation of this report, provided that this will not absolve Urbis from liability arising from an opinion expressed recklessly or in bad faith.

ABBREVIATIONS CBD Central Business District China People’s Republic of China CPI Consumer Price Index F&B Food & Beverage GDP Gross Domestic Product GFA Gross Floor Area NLA Net Leasable Area PLA People’s Liberation Army PPP Purchasing Power Parity RPI Retail Price Inflation SEZ Special Economic Zones WTO World Trade Organisation

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1 Overview of the Chinese Economy

This first section of the report provides an overview of the Chinese economy with particular focus on the growth it has achieved over the past two decades. This growth has been largely attributable to the economic reforms introduced into China over the past three decades including an easing of restrictions on foreign investment.

Overall, China’s economic outlook remains robust, with strong growth expected into the future and with some economic experts predicting that by 2030, China will have overtaken the United States as the world’s largest economy. This section on China economy specifically covers:

Regional context and background

System of government and political background

Economic transformation in China

Recent economic trends

GDP trends and forecasts

Retail sales growth

Inflation

Population characteristics

Income growth and the Chinese middle class

1.1 REGIONAL CONTEXT & BACKGROUND China is the world’s fourth-largest country by land area and the largest by population.

China has an area of 9.6 million sq.km (more than 6% of the planet’s total land surface). It stretches 5,200 km from the Pacific Ocean in the east deep into Central Asia. From north to south it extends 5,500 km. In all, the country has 14,500 km of coastline and more than 22,000 km of land border with 14 countries (refer Map 1.1).

Administratively, China has 23 provinces, five autonomous regions (Tibet, Guangxi, Inner Mongolia, Xinjiang and Ningxia) and four municipalities (Beijing, Chongqing, Shanghai and Tianjin).

The current population, estimated at 1.34 billion as of 2010, is composed mostly of Han Chinese (92%). However, this still leaves 107 million people belonging to ethnic minorities. Many of these live in the five mainland “autonomous” regions listed above.

China has a long and glorious past in which it has stood out as one of the great civilizations of human history, leading the way in science, the arts, government and commerce. In the early 1800’s it was the world’s largest economy. This great historical legacy has been disrupted somewhat by episodic civil unrest, military calamity and foreign occupation that plagued the country during much of the 19th and 20th centuries.

After World War II, Mao Zedong’s Communists established a dictatorship that imposed strict controls over everyday life. His successors have looked more kindly on market-oriented economic development and modernisation, which has resulted in rapid and vast improvement in living standards and expanded personal freedoms.

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CHINA IN ASIA MAP 1.1

1.2 SYSTEM OF GOVERNMENT & POLITICAL BACKGROUND China is a communist state, meaning in essence that supreme power resides with the Communist Party of China, which was founded in July 1921 and had over 80 million members by 2010. The Party exercises its power through the government and armed forces.

The latter – formally called the People’s Liberation Army (PLA) – is the real enforcer behind the state apparatus. The PLA is reputed to be the world’s largest military force with approximately three million troops. Although it is technically subordinate to the government it enjoys substantial independence and influence.

The current China head of state is President Hu Jintao while the official head of government is Premier Wen Jiabao. Chief policymaking body is the National People’s Congress and its Standing Committee, whose policies are implemented by a cabinet called the “State Council” that controls the various ministries and agencies beneath it.

1.3 ECONOMIC TRANSFORMATION IN CHINA Despite the centrally-planned approach to government practiced by the communists, China has shifted gradually from a system of public ownership toward a market-based one, euphemistically referred to as “socialism with Chinese characteristics”. In this hybrid system, publicly and privately-owned enterprises function together cheek-by-jowl.

The transformation of the economy has been implemented in a series of phases beginning in the 1970s and 1980s. First reforms consisted of opening up trade links with the outside world, allowing farmers to sell their surplus on the open market and establishing local enterprises that took over businesses hitherto run by the state.

The second wave of reform in the late 1980s and early 1990s involved the development of a pricing system and de-emphasised the role of the state in resource allocation.

A third wave in the late 1990s saw the closure of many (though by no means all) unprofitable state enterprises and addressed the insolvency of China’s state banking system.

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In the fourth wave, currently underway, more attention is being given to the growing gap in living standards between China’s haves and have-nots. The government’s economic strategy is also trying to shift toward growth driven more by domestic consumption and less by exports and fixed asset investment. There has also been a push towards more balance between services and manufacturing, and to tilt both manufacturing and services toward high-tech industries.

One of the tools employed by the government to drive foreign investment and to facilitate innovation, trade and economic growth is the establishment of Special Economic Zones (SEZ), which are regions within whose boundaries companies are granted preferential policies. Such policies include tax incentives and subsidies for foreign investment, less red tape and greater independence to conduct “outward-looking” (read: export-oriented) economic activities.

SEZ’s have been established in coastal areas, including the Pudong District of Shanghai, Shenzhen in the Pearl River Delta and Qingdao on the south coast of the Shandong Peninsula.

China’s economic reform is generally regarded as a success story with over two decades of exceptionally strong economic growth. The standard of living of most residents has improved quite dramatically since reforms began. Evidence of modernisation is visible throughout the country, with its new highways, skyscrapers, airports, and telecommunication facilities.

Such visual evidence of improved conditions and openness to the international economic community is supported by a raft of statistics. China is:

Number 9 in the world for stock of inward foreign direct investment – US $578 billion at the end of 2010;

Second-largest economy in the world in purchasing power parity (PPP) terms after the US;

World’s largest exporter, with exports of US $1.58 trillion in 2010, a year of global recession;

Possessor of the world’s largest reserves of foreign exchange and gold: more than US $3.2 trillion at September 2011;

Second-largest producer of electricity after the US;

There is still much work to do. China’s GDP per capita of US $7,800 (PPP terms) gives it the modest ranking of 95th in the world out of 227 countries (EIU, 2010).

1.4 RECENT ECONOMIC TRENDS China’s economy was one of the strongest performers throughout the global financial crisis, not only managing to stay out of recession but continuing to experience relatively robust growth that has persisted throughout 2010 and into 2011. This has been achieved despite the contraction of export markets in the US and Europe.

With plenty of fiscal firepower in the form of a large budget surplus in 2007, the Chinese government pumped approximately US $600 billion in stimulus money into the economy in an endeavour to offset declining exports with heightened domestic consumption and investment. The fiscal measures were harnessed to accommodative monetary policies.

The stimulus efforts during 2009-10 were focused on projects such as low-income housing, water, electricity and rural infrastructure. The package also included tax reform and the abolition of commercial banks’ credit ceilings, which resulted in US $1.5 trillion of bank lending on balance sheets in 2009. There has also been an unknown amount of lending off balance sheets that is raising some concerns about the health of the banking system.

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Despite a temporary hiccup in 2008/2009, real GDP bounced back and grew by 10.3% in 2010. Even export volumes recovered somewhat as companies appear to have restructured to improve their competitiveness and entered new markets. In relative terms the overall outlook for China’s economy is extremely positive. Having said this however, there are some minor concerns, particularly:

The durability of private consumption as an engine of growth as the government stimulus measures wane; e.g. the removal of incentives for vehicle purchases.

The broader macroeconomic effects of measures taken by the government through 2010 and 2011 to clamp down on soaring property prices and dampen inflation more generally. More narrowly, the curbing of the housing boom will also flow through to reduced sales of home goods and construction materials.

The heightened role of state-owned enterprises in the economy, due to the fact that these were conduits for much of the stimulus money.

The on-going contraction in export markers in the US and Europe and the continued economic instability in the Eurozone in particular.

There is also some concern about the quality of the GDP growth. What goes into the numbers is not necessarily the kind of activity that creates long-term wealth. For example, there have been instances whereby there has been a suspected mismatch between the type of real estate and infrastructure investments required in China and the type that have been made in recent years, as well as the way these projects have been financed by state-owned Chinese banks. (This has raised questions about the health of the banks as noted above.)

So despite continuing favourable trends in the official economic data there is still some room for caution. The consensus view is that the economy will continue to grow for the next five years at a robust pace (9.5% real growth CAGR), albeit slightly slower than in the lead-up to the global crisis in 2008. Rising exports and a strong labour market are likely to keep a reasonably high platform under household consumption spending even as macro policy returns to its pre-2008 stance.

The shift to a more consumer-led economy is still contending with structural headwinds. China’s households – particularly those headed by older people – still hold large precautionary bank balances and when extra disposable income is available it tends to be squirreled away rather than spent.

This is likely to become a less-prevalent behaviour pattern over time as younger generations move into their peak earning years and the quality of China’s retailers and shopping centres converge on the world class.

It is also important to note that the pace of retail spending in China, while impressive on the surface, is not all that it appears to be because of definitional differences with more conventional retail sales measures used in other parts of the world. This, together with issues that have been raised over the veracity of China’s economic statistics generally, suggest a degree of circumspection should be involved when interpreting data to be used as the basis for investment decisions.

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1.5 QUANTITATIVE ANALYSIS OF GDP TRENDS & FORECASTS China has been the world’s second-largest economy in PPP terms for some time, and in 2010 surpassed Japan for the same mantle at market exchange rates (refer Chart 1.1 and following data in ¥).

China, Japan & USA Nominal GDP 1980-2015 (USD BILLION AT MARKET EXCHANGE RATES) CHART 1.1

20,000 18,000 China 16,000 Japan 14,000 USA 12,000 10,000 GDP (USDBillion) 8,000 6,000 4,000 2,000 - 1980 1985 1990 1995 2000 2005 2010 2015 (F)

Source : IMF World Economic Outlook, April 2011 update

China GDP ¥ BILLION (NOMINAL) TABLE 1.1 2005 2006 2007 2008 2009 2010

China GDP (¥ Billion) 18,494 21,631 26,581 31,405 34,090 39,798

China GDP Real Growth (%) 10.4% 11.6% 13.0% 9.6% 9.1% 10.3%

China GDP Nominal Growth (%) 15.7% 17.0% 22.9% 18.1% 8.6% 16.7%

Source : IMF World Economic Outlook, April 2011

However, in terms of GDP per capita at both purchasing power parity and market exchange rates, a broad measure of living standards, China still lags well behind the developed countries (refer Chart 1.2).

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GDP per Capita, 2010 USD, PPP ADJUSTED CHART 1.2

Singapore 56,522

US 47,284

Hong Kong 45,736

Taiwan 35,227

Japan 33,805

Euro Area 30,540

Korea 29,836

Malaysia 14,670

Thailand 9,187

China 7,519

Indonesia 4,394

Philippines 3,737

India 3,339

0 10,000 20,000 30,000 40,000 50,000 60,000

Source : IMF World Economic Outlook, April 2011 update; European Central Bank

The still relatively low level of GDP per capita should come as no surprise since China has a massive population with highly variable productivity levels from region to region and countryside to city. For example, while GDP per capita for China as a whole was ¥29,668 in 2010, GDP per capita for Chengdu was ¥41,253 and that for Shanghai was ¥ 76,074.

This heterogeneity in terms of economic productivity across the country means that the headline economic aggregates can be misleading indicators of the prosperity of individual regions.

While the absolute level of GDP per capita for China is still modest by the standards of other Asian and developed countries, the growth rate continues to be very impressive. With a forecast 11.2% CAGR China’s nominal GDP per capita will almost double from 2010 and be approaching ¥60,000 by 2016.

Real GDP in China has been growing at an average rate of 10.1% CAGR during since 2001 (refer Chart 1.3). In nominal terms, GDP per capita has grown at a CAGR of 14.8% over the same period (Chart 1.4).

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As discussed above, the outlook during the forecast period is favourable but weighted with some risk. Both the IMF and the World Bank forecast an annual average percentage growth rate in the high single digits through to 2015, which is consistent with the recent past. In the case of the slightly more pessimistic World Bank projection (a 9% annual growth forecast vs. 9.5% for the IMF) some ground is conceded to the economic headwinds noted above, specifically:

The normalisation of macroeconomic policies will reduce the level of consumer spending, particularly on durable goods such as cars.

Softer growth potential in the trade sector due to slower growth in major export markets.

Softer fixed investment as a result of the waning stimulus and government measures to restrain property prices and inflation.

Urbis believes that these forecasts are the most plausible in current circumstances. The risks to growth and concerns about the quality of growth are real, yet not sufficient at this point to cause a material downgrade of GDP growth expectations. We believe that the China growth “story” remains intact, with its compelling demographics and ongoing economic liberalisation.

Actual and Forecast Real GDP Growth for China 1996-2016 CHART 1.3

14.0% World Bank Q`VH: 12.0% 13.0% IMF 10.3% 11.6% 9.6% 9.5% 9.5% 10.0% 9.5% 9.5% 10.0% 10.0% 10.1% 10.4% 10.3% 9.6% 8.0% 9.3% 9.1% 9.1% 9.3% 8.4% 8.3% 8.7% 7.8% 7.6% 6.0%

4.0%

2.0%

0.0% 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Source : IMF World Economic Outlook, April 2011; World Bank Beijing Office Quarterly Update June 2011

China GDP Per Capita 1980-2016, ¥ NOMINAL CHART 1.4

70,000

60,000 Q`VH: 57370 51656 50,000 46476 41678 37386 40,000 33704 29669 25541 30,000 23648 20117 16456 20,000 14144 12299 10510 7828 8592 9368 10,000 5816 6388 6765 7129

- 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Source : IMF World Economic Outlook, April 2011

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1.6 RETAIL SALES China’s retail sales measure reported by the government’s National Bureau of Statistics and widely cited in the world business media has surged at an annual average rate of almost 15% over the past decade, reaching approximately ¥15.7 trillion in 2010. However, this measure includes wholesale trade, motor vehicle sales, accommodation and other items that make it inconsistent with the retail sales measures of developed countries such as the US, Australia, Singapore and Europe. Consequently, the Chinese government retail figures should not be used as a strict indicator of the level and pace of sales at outlets commonly found in shopping centres.

Urbis has examined China’s national accounts over a number of years and determined that sales of what are conventionally accepted as retail goods, excluding motor vehicles and automotive fuels, have typically been around 55% of household consumer spending. We have further estimated that food spending is approximately 36% of consumer spending, leaving the remaining 19% to be allocated among non-food retail goods.

Using these estimates we have constructed time series for what we call “actual” retail sales. The estimates have been calibrated in recognition of the fact that as consumers become more affluent spending on food diminishes as a proportion of retail sales, while spending on more discretionary goods increases (refer Charts 1.5 and 1.6).

China Retail Sales 2000-2010, ¥ BILLION CHART 1.5

18,000

16,000 Retail Sales (Official Measure)

14,000 Urbis Estimate of Retail Sales

12,000

10,000

8,000 ¥ Billion 6,000

4,000

2,000

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

* Urbis Estimate Source : China National Bureau of Statistics, Urbis

Using these alternative constructs, retail sales in China have grown from ¥2.5 trillion in 2000 to ¥7.4 trillion in 2010, representing a CAGR of 11.3%. Sales are expected to increase to approximately ¥12.9 trillion in 2015 (refer Chart 1.6). This represents a robust 11.9% CAGR from 2011, which is slightly below the 13.8% CAGR that sales achieved over the 2005-10 period. The outlook for a 11.9% CAGR despite a marginal slowing in overall GDP growth, is justifiable in view of:

The still generally favourable economic growth outlook, which will raise disposable incomes;

Improved retail supply, both in amount and quality;

The macroeconomic policy emphasis shifting from trade to domestic consumption.

The gap between food and non-food spending will gradually close during the forecast period but food spending should still account for more than 60% of the household retail spending budget. Food spending is forecast to grow at an annual rate of 11.4% up to 2015, slightly higher than its 10.7% pace during 2001-10.

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Meanwhile, non-food spending rises sharply from an estimated ¥2.6 trillion in 2010 to ¥4.9 trillion in 2015. This is a nominal annual average growth rate of 12.7% and represents a slight decline from the trend during 2001-10.

China Estimated Total Retail Sales 2001-2015 (¥ BILLION) CHART 1.6

14,000 12,960 Q`VH: Non-food 11,623 12,000 Food 10,425 10,000 9,308 8,273 7,354 8,000 6,694 5,977 ¥Billion 6,000 5,162 4,438 3,929 3,521 3,135 4,000 2,716 2,901

2,000

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

* Urbis Estimate Source : China National Bureau of Statistics, Urbis

Despite growth in international tourism to China over recent years, foreign tourists contribute little to total retail sales. In 2010, the Chinese government reported foreign exchange earnings from international tourism of US $45.81 billion, of which approximately 34% goes to shopping including sales at food and beverage establishments. This translates to just over 1% of retail sales.

With population growing at about 0.5% annually, retail spending per capita will approximately track annual total retail sales growth, minus 0.5%. This means retail sales per capita can be expected to grow from their 2010 level of about ¥5,482 to ¥9,423 by 2015 (refer Chart 1.7).

Of course, it must be kept in mind that this is a national average encompassing a vast area and a vast population with plenty of heterogeneity with respect to income and spending propensity. The larger cities in particular such as Shanghai and Beijing with their higher incomes, will have considerably higher per capita sales and spending levels than for China as a whole.

China Estimated Retail Sales Per Capita 2000-2015 ¥ CHART 1.7

10,000 9,423 9,000 Q`VH: 8,494 7,656 8,000 6,870 7,000 6,137 5,482 6,000 5,004 4,592 5,000 3,990 3,445 4,000 3,065 2,461 2,768 3,000 1,998 2,138 2,279 2,000 1,000 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source : China National Bureau of Statistics, Urbis

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1.7 INFLATION Throughout the 1980s and 1990s China experienced relatively high inflation by global standards, with average rates of 7.5% and 7.8% respectively for those two decades. Since 2000 the inflation rate has been brought down materially to an annual average of only 2.2% over 2001-10. Prices fell slightly with the downturn in 2009 but recovered in 2010. The outlook is for modest consumer price growth of 2.7% throughout the forecast period (refer Chart 1.8), notwithstanding a current spike in prices.

Retail Price Inflation (RPI) measures movement in prices of retail goods and services over time. Since it tracks only retail items it is a narrower measure than the CPI. Moreover, as it tends to move in the same direction as the CPI it is apt to be ignored by many analysts. The recent history and forecast for the RPI are included in Chart 1.7 along with the CPI. We expect the RPI to edge forward at a low average annual rate of approximately 1.9% during the next five years.

China Average Consumer and Retail Price Inflation 2001-2015 CHART 1.8

3.5% 3.0% 3.0% CPI RPI 2.7% 2.5% 2.5% 1.9% 2.0%

1.5% 1.4%

1.0%

0.5% 0.3%

0.0% 2001-05 2006-10 2011-15 (F)

Source : China Bureau of National Statistics, IMF, Urbis

1.8 POPULATION CHARACTERISTICS China has the world’s largest population but annual growth has been slowing in recent decades to its current pace of about 0.5%.

The IMF forecasts a continuation of this stable but low population growth rate for the remainder of the forecast period (refer Chart 1.9). The modest pace of growth is a result of both an ageing population and the one-child policy initiated in the late 1970’s.

Accompanying this headline growth trend has been a dramatic process of urbanisation, particularly since the beginning of the last decade. The percentage of people living in urban areas surged to almost 50% in 2010, up from 36% in 2000 (refer Chart 1.9).

Looking forward over the short to medium term, it is expected that urbanisation within China will continue. More than half of the population will be urban dwellers by the end of 2013 and by 2025 a billion people will live in the nation’s cities.

As a result of this urbanisation process China now has 25 urban areas with a population greater than 2.5 million people (refer Chart 2.2 in the next section of this report). Moreover China currently has 88 cities with a population of over 1 million and by 2020 the United Nations forecast that this will have increased to around 120 cities. Shanghai, currently the largest city, is ranked number 10 in the world.

Like much of the developed world, China’s population is ageing, not just as a result of low birth-rates but also improvements in hygiene and medical technology that have increased life expectancy (Table 1.2).

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China Population and Urbanisation 2013-2016 CHART 1.9

Urbanisation Popualtion ('000) 60% 1,375 1,382 1,400 1,362 1,368 Population Urbanisation 1,348 1,355 1,335 1,341 1,321 1,328 55% 1,307 1,315 1,292 1,300 1,300 50%

45% 1,200

40% 1,100 35%

30% 1,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source : IMF, Urbis

China’s Key Demographic Indicators TABLE 1.2 Unit 2000 2010

Life Expectancy Males years 66.8 69.6 Females years 70.5 73.3 Literacy Rate Total % 93.3% 95.9% Annual Per Capita Income of Households Urban ¥ 6,280 19,109 Rural ¥ 2,253 5,919 Gender Split Males % 51.6% 51.3% Female % 48.4% 48.7% Educational Attainment No schooling % 15.6% 11.5% Primary School % 35.7% 26.8% Junior Secondary School % 34.0% 38.8% Senior Secondary School % 11.1% 14.0% College or Higher % 3.6% 8.9% Age Distribution 0-14 % 22.9% 16.6% 15-64 % 70.2% 74.5% 65+ % 7.0% 8.9% Urbanisation Urban dwellers % 36.2% 49.9% Rural dwellers % 63.8% 50.5%

Source : China National Bureau of Statistics

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1.9 INCOME GROWTH & THE CHINESE MIDDLE CLASS During the past 15 years personal incomes have increased significantly along with GDP growth. This has made possible increasing household penetration of basic consumer goods, including washing machines, refrigerators, televisions, mobile phones and computers (refer Table 1.3).

Ownership of Consumer Durables by Chinese Urban Households SELECTED YEARS TABLE 1.3

Item Ownership per 100 Urban Households

1990 1995 2000 2010 Car - - 0.5 13.1 Motorcycle 1.9 6.29 18.8 22.5 Washing machine 78.4 88.97 90.5 96.9 Refrigerator 42.3 66.22 80.1 96.6 Colour television 59.0 89.79 116.6 137.4 Air conditioner 0.3 8.09 30.8 112.1 Water heater - 30.05 49.1 84.8 Computer - - 9.7 71.2 Microwave - - 17.6 59.0 Mobile phone - - 19.5 188.9 Source : China National Bureau of Statistics

At the same time, however, the gap in well-being between urban and rural residents has widened considerably. In 1995 rural dwellers enjoyed approximately 37% of the disposable income per capita of urban dwellers. By 2010 that figure had dropped to 31% (refer Chart 1.10).

Since 1995 urban disposable income per capita has grown at a very strong 10.5% CAGR.

Per Capita Income of Urban and Rural Households 1995-2010 ¥ CHART 1.10

25,000

Urban Disposable Income Per Capita 20,000 19,109 Rural Net Income Per Capita 17,175 15,781 15,000 13,786 11,760 10,493 9,422 8,472 10,000 7,703 6,860 6,280 5,919 5,160 5,425 5,854 5,153 4,283 4,839 4,140 4,761 5,000 3,255 3,587 2,366 2,476 2,622 2,936 1,578 1,926 2,090 2,162 2,210 2,253

0 1995 1997 1999 2001 2003 2005 2007 2009

Source : China National Bureau of Statistics

Strong income per capita growth in urban areas is resulting in the emergence of a middle class that is being eyed enthusiastically by domestic and foreign retailers alike.

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Table 1.4 shows estimates compiled by McKinsey Global Institute of the number of China’s urban households in various income brackets in 2005 and 20151. McKinsey defines five different household income segments: global affluent, mass affluent, upper middle class, lower middle class and poor. The lower middle class segment has an annual after-tax income of ¥25,001-40,000 (US $12,500-20,000 using a common PPP conversion rate for 2005) while the upper middle class has an annual income of ¥40,001-100,000 (US $20,001-50,000).

Disposable Income of China’s Urban Households TABLE 1.4 Disposable Urban Households (mil) Income (¥) 2005 2015 Income Category

Global Affluent >200,000 0.2 1.1 Mass Affluent 100,001-200,000 1.0 15.7 Upper Middle Class 40,001-100,000 18.0 59.4 Lower Middle Class 25,001-40,000 24.1 139.2 Poor <25,000 147.6 65.0

Source : McKinsey & Company, IMF, Urbis

Thus, within the middle class bracket defined by McKinsey were an estimated 42.1 million households in 2005, expected to grow to 198.6 million households in 2015 representing a CAGR of 16.8%. The vast majority of the numeric growth – 115.1 million households – will occur in the lower middle class as rising wages and incomes lift the standard of living of erstwhile poor families to a new condition where they have some limited amount of discretionary income.

Meanwhile, the number of households in the more affluent income segments above the middle class is estimated to grow from just over one million in 2005 to almost 17 million in 2015.

Two key implications emerge from this data:

1. China’s middle class as it is commonly defined by McKinsey and other sources and cited in media reports, is growing rapidly and will reach huge proportions within a relatively short time- frame. Within 10 years, the number of households encompassed by these middle class definitions is likely to approach 200 million.

2. Over the next five to ten years the standard of living of this middle class will not be directly comparable to the middle class in the US and other developed countries. Households will have some limited amount of discretionary income to spend and most of this will be allocated to mass consumer products rather than high-end or luxury products.

From the standpoint of shopping centre operators it is hardly surprising when looking at the McKinsey data, and at China’s income data in general, that mass market retailers such as hypermarkets are currently the growth vehicles and preferred anchor stores for much of China retail. From the standpoint of merchandise assortment and market positioning, these retailers are situated at retail’s “sweet spot” and will be the chief beneficiaries of China’s emergent middle class.

1 Diana Farrell, Ulrich A. Gersch, Elizabeth Stephenson The Value of China’s Emerging Middle Class in Mckinsey Quarterly, 2006 special edition.

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2 Overview of the Retail Property Sector

This section describes some of the forces driving the retail property market in China. This broader context is important when considering the future of retail in China and in Chengdu.

2.1 GENERAL OVERVIEW OF THE CHINESE RETAIL MARKET

2.1.1 EMERGENCE & EVOLUTION OF SHOPPING CENTRES IN CHINA China’s shopping centre industry is relatively new. As recently as the late 1980’s there were virtually no shopping centres in China in the sense of independently managed entities operating with modern shopping centre business models. There were, however, department stores that charged fees to manufacturers and dealers to operate their own shops within the department store envelope.

These department stores gradually expanded their offer by bringing in a greater variety of tenants, such as food and beverage. They began to look a little bit more like shopping centres but they were still a long way from the real thing.

In the early 1990’s entities resembling genuine shopping centres began to appear, mostly multi-level buildings in downtown locations built with the financial backing of local governments. Examples included the China World Trade Center in the Beijing CBD (opened 1990), Guangzhou Tee Mall in Guangzhou (1996), and Shanghai Bailian Nanfang Shopping Mall (1998), Shanghai Grand Gateway (1999) and Plaza 66 (2001) all in Shanghai. These centres were operated approximately according to western practices with regard to management and leasing, and they represented the leading edge of a retail property boom driven by growing disposable incomes and urbanisation.

Mall developments now are typically anchored by hypermarkets, department stores and/or supermarkets and include scores of fashion specialty, food and entertainment tenants. Most are multi-level and often include mixed-use elements such as residential, hotel and office space.

Many, though by no means all, of the newer centres exhibit improvement over their predecessors because their developers have understood and applied the lessons of past mistakes. The quality of mall management is also improving as international best practices seep into the market and professional management companies with a global profile are hired to operate properties.

The profitability of the better developed and managed centres has attracted a stronger flow of capital into the retail sector and the participation of more robust investors such as Citic and COFCO, and developers such as Wanda Group, R&F Properties and Longhu Properties. High-profile international firms have joined the fray, including Singapore’s CapitaLand, Charoen Pokphand Group of Thailand, SM Investments Corporation of the Philippines, Simon Properties from the US (now exited), Japan’s Aeon, and Hong Kong’s Wharf and Swire.

2.2 HETEROGENEITY OF SHOPPING CENTRES Despite the progress of the industry in China, the quality of mall assets is highly variable. While the superior ones have attracted the better domestic retailers and high-profile international ones, the worst have either withered away or await a similar fate.

Professional management of shopping centres as a unified entity is sometimes conspicuous by its absence, and in many cases explicitly prevented by the shopping centre business model itself. The most egregious examples of this latter are so-called “strata titled” centres, in which shops are sold off to individual investors instead of being leased to retail tenants under finite terms that enable the owner to turn over the space to more competitive retailers as the situation warrants. The tenant mix consequently becomes fragmented and incoherent, making it impossible for the mall to achieve optimal retail operation. These strata titled centres probably account for about half of all shopping centres in China.

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Many other centres fail not because they suffer from leasing fragmentation but because they were wrongly sized to market demand or incorrectly positioned for the prevailing local market demographics. It is not uncommon to see shopping centres that are too upscale for local spending power, too large, poorly designed, configured impractically or not fitted out in a manner that approaches international standards. Sadly, these shortcomings frequently occur simultaneously under the one roof.

The principal reasons for these kinds of failures are twofold: first, a lack of professional development and management skills on the part of the developers, many of whom come from a residential development background and don’t understand retail particularly well; second, dubious motivation for development in the first place. In a number of instances projects have been financed by state-owned local entities that are competing with one another to build the biggest and the best without heed to sound shopping centre economics.

Golden Resources Mall, which opened in Beijing in late 2004, was at that time the world’s largest shopping centre with 680,000 sq.m of leasable area. One of the mall’s general managers (the property did not have a single unified management) told the Christian Science Monitor that: “From the beginning we wanted the largest shopping centre in the world. We are the country with the most people in the world. We have the fastest growing economy. The largest mall shows our progress as a society.”2

South China Mall, which “opened” in Dongguan a year after Golden Resources and challenged the latter for the title of world’s largest mall, was in reality mostly an empty shell, conceived more out of competitive hubris than genuine consumer demand.

This kind of competitive sentiment is widespread, particularly among larger cities such as Shanghai, Beijing, Shenzhen and Guangzhou. Moreover, smaller cities try to attract investment in large shopping centres in an endeavour to raise the city’s profile, to prove that they have “arrived.”

As noted, the positive side of the story is that the development community in China is now turning out centres that in some cases are of genuinely international standard.

Well before the global downturn of 2008-09 large US and European retail chains in just about every category were eyeing China as their potential future growth engine. Unable to expand further in their domestic markets and struggling to generate same-store sales growth within existing store fleets, the chains saw China as their “get out of jail ticket” – a sanctuary with almost unlimited market potential to counterbalance less risky but only glacial growth at home.

In other words, retail chains had hit upon a new concept that they borrowed from the world of investing – this was “diversification,” an opportunity for rapid growth – or any growth at all – in one place to offset a downturn elsewhere.

The financial crisis only accelerated the sense of urgency among developed country retail chains to get a foothold in China as quickly as they could.

However, these retailers generally will not go into substandard shopping centres. This is driving a bigger wedge between the shopping centre “haves” and “have nots” in China – those with the best brands and those without them – and accelerating either the demise or repositioning of the less competitive properties.

At the same time as fashion brands and other specialty chains are going into China’s new generation of regional malls, hypermarket operators such as Carrefour, Wal-Mart and Tesco are in many cases becoming de facto shopping centre operators with themselves as anchors. These retailers are creating neighbourhood/community-type centres which often consist of three levels, with the ground floor leased to small tenants and the upper two levels occupied by the hypermarket itself.

In this manner, China is now evolving toward a multidimensional shopping centre industry not just tied to large super regional malls, but encompassing smaller and highly popular neighbourhood and community centres as well.

2 Robert Marquand, “China’s Supersized Mall,” Christian Science Monitor, November 24, 2004

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2.3 KEY RETAIL PLAYERS & COMPETITORS AS CONSUMPTION PATTERNS EVOLVE As their disposable incomes increase the consumption patterns of middle class urban Chinese households will change.

However, households are likely to maintain a very high rate of savings by world standards. At approximately 40%, China already has one of the highest saving/income ratios in the world and this culture restrains consumer spending and borrowing. The characteristic is particularly evident among older people. Attitudes are changing with the advent of a new generation that has not grown up with the economic and political upheavals that affected their parents’ lives and influenced their more conservative spending behaviour.

Nonetheless, although the rate of discretionary spending will rise in the coming years, a good deal of household income will be saved. From the standpoint of China’s wage earners there are compelling reasons for this. In the US or western Europe, an individual’s upward mobility occurs in an environment where health care and education systems are relatively strong, housing is of a generally high standard, and the unemployed, sick or retired are provided for by the state.

In contrast, China’s new middle class will be focused on improving all of these elements of life largely self-financed. Saving will therefore continue to be of critical importance. With the passing of the baton from one generation to another, we expect China’s saving rate to come down but to remain at a relatively high level.

Even as they stand by their need to save, middle-class consumers can be expected to improve their living standards by purchasing as many discretionary items as they can afford. Consumers will be price- sensitive and formats that are able to sell at low price points such as hypermarkets are well-placed to continue their leading role in the foreseeable future.

The three largest foreign hypermarket operators are Wal-Mart (189 stores), Auchan/RT-Mart (114 stores) and Carrefour (184 stores), all of which are expanding successfully in the market along with powerful domestic players such as Wu Mart (113 stores). New entrants in the China hypermarket sector such as Jusco from Japan and Lotte from Korea have also arrived.

Department stores – long the mainstay of China’s retail scene – are still an important format although their numbers have plateaued and they will continue to be challenged by the more value-oriented formats, particularly the hypermarkets. According to the National Bureau of Statistics there were 3,805 chain department stores in China at the end of 2008, slightly fewer than the 3,853 they numbered in 2005.

In contrast specialty stores are multiplying rapidly, with the number of units operated by chains increasing by almost 40% from 2005 to 2008. This is not surprising in view of the increasing primacy of shopping centres as a distribution channel. The demand for specialty retail stores is being met by domestic and international fashion brands, digital product retailers and home goods retailers.

The next big wave of specialty stores entering the China market are the fast fashion players, including Zara and Mango from Spain, H&M from Sweden, Uniqlo from Japan and Forever 21 from the US. These retailers will deliver compelling value to China’s youthful fashion-oriented market, with trendy clothing that is generally accessible in price.

Zara now has 77 stores, and the Zara “suite” of brands (including Pull & Bear and Bershka) takes this to 165 stores. H&M have opened 61 stores over the past five years, and is now looking to introduce its smaller format stores (Cos and Monki) to China.

American lifestyle brands such as Gap, American Eagle Outfitters, Bebe, Levi’s and Guess have also arrived in China and have significant expansion plans. Levi’s has created a format called “Denizen” specifically for the China market, believing that it is essential for the success of western brands in China that their store formats be customised to local conditions. More of these kinds of tailored store formats, many of them with new names over their doors, can be expected to emanate from established chain stores and brands.

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Further up the food chain, sales of luxury products are increasing materially in China but with high taxes on these products many luxury stores in mainland China are currently highly effective marketing vehicles for the brand more than sales channels. However, some brands report that their China businesses are flourishing and view China as the next Japan in terms of its sales potential.

There are two key reasons for the urgency of luxury brands to expand in secondary and even tertiary Chinese markets even before consumers are necessarily able to buy their products. First, they want to increase brand awareness and the preferred form of marketing for a luxury brand is a physical presence. Second, they are seeking to acquire the optimal locations in Chinese cities just as they did in New York and Paris. When conspicuous consumption in these secondary and tertiary China markets begins to hit its stride, the brands want to be on the cities’ Fifth Avenues or Champs-Elysees.

Except for some significant pockets of wealth in cities such as Beijing and Shanghai, high-end designer brands have taken a little longer to penetrate many parts of the country. However, in the past few years, these brands have increased their expansion efforts substantially, with international brands now becoming much more commonplace throughout the country. This has been the case for both luxury and mass market retailers. However, the presence of up-scale international brands is not a guarantee of success - for most shopping centre owner/developers, a well-researched tenant roster that matches the local demographic profile of a local market and focuses primarily on food, mass market consumer goods and moderately-priced fashion is more likely to be a successful formula for the short-term success of a centre than a lavish assortment of upscale brands.

2.4 RETAIL FLOORSPACE ESTIMATES China has an estimated 1.1 sq.m of floorspace per capita (NLA) in 2010. This is relatively low by western standards, particularly compared with the United States at 4.7 sq.m per person and Australia (2.1). It is comparable however to Hong Kong (1.1) and Singapore (1.0) (refer Error! Reference source not found.), where the planning environments are highly controlled.

At this level of provision, we estimate China’s total retail floorspace at approximately 1.47 billion sq.m. While some of this floorspace includes high quality shopping centres and department stores, the majority of this floorspace comprises local and often lower-quality individual retailers.

China and Selected Countries Estimated Retail Floorspace Per Capita (SQ.M) CHART 2.1

5.0 4.7 4.5 4.0 3.5 3.0 2.5 2.1 2.0 1.5 1.3 1.2 1.5 1.1 1.1 1.0 1.0 0.5 0.0 USA (2010) Australia Japan (2009) Korea (2010) United China (2010) Hong Kong Singapore (2009) Kingdom (2009) (2010) (2009)

Source : Urbis; International Council of Shopping Centres

2.4.1 SHOPPING CENTRE FLOORSPACE PER CAPITA We have estimated China’s shopping centre (including department stores) floorspace to comprise roughly 113.5 million sq.m or 6.6% of total retail floorspace (based on the per capita estimates provided in the previous section).

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The estimated average per capita shopping centre and department store floorspace provision (including department stores) for China’s most China’s 20 most heavily supplied cities is approximately 0.22 sq.m. We have estimated that outside of these cities, shopping centre and department store provision is far patchier, with an average provision totalling approximately 0.07 sq.m. With China it must be noted that a significant proportion of the retail floorspace is located in rural areas and it is relatively old, inefficient and of low quality.

The amount of retail floorspace accounted for by shopping centres is lower in China than in more developed retail markets - for example in the US it is 50% of total retail floorspace and in Singapore it accounts for 38% - which is not surprising considering China’s shopping centre development history.

What such a low figure does suggest is that there is significant scope for further development of shopping malls in the near term, particularly in urban areas that are not currently well-supplied.

2.4.2 OTHER RETAIL FLOORSPACE PER CAPITA Given the provisions estimated above, total floorspace that falls outside of the definition of shopping centres (including department stores) equated to roughly 1.6 billion sq.m, or 1.2 sq.m per capita. This figure comprises all individual retailers (i.e. locally owned small businesses), including restaurants, convenience stores, supermarkets and the like.

2.5 KEY CITIES & GROWTH AREAS FOR RETAIL Retail development is now shifting focus away from the mega-cities of Shanghai, Beijing, Shenzhen, Guangzhou and Dongguan, to fast-growing secondary cities with high concentrations of population and relatively high purchasing power.

As indicated in Chart 2.2 there are 20 of these “second tier” cities with populations in excess of 2.5 million and more to be added in a short time-frame as the urbanisation process goes on.

The shift of retail development is occurring for a number of “push” and “pull” reasons.

The major “push” factors are increasing saturation of both mall space and retailers in the first tier cities. Moreover, the cost basis of operating in those large cities is growing, particularly with respect to land and labour.

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China’s Most Populous Urban Areas, 2010 CHART 2.2

Shanghai 18.4 Shenzhen 14.5 Beijing 14.0 Guangzhou-… 13.3 Dongguan 10.5 Tianjin 6.7 Chongqing 5.5 Wuhan 5.3 Hangzhou 5.3 Shenyang 5.2 Chengdu 4.8 Xi'an 4.0 Nanjing 3.6 Suzhou 3.6 Harbin 3.6 Dalian 3.3 Changchun 3.2 Kunming 3.1 Taiyuan 2.9 Wuxi 2.9 Changsha 2.7 Zhengzhou 2.6 Nanchang 2.5 Qingdao 2.5 Shijiazhuang 2.5

0 2 4 6 8 10 12 14 16 18 20

Source : Demographia: World Urban Areas and Population Projections, Edition 6.1 July 2010

There are numerous compelling “pull” factors, including:

The central government has a “go west” policy and also a strategy to revitalize the northeast of the country. This is of particular relevance to Chengdu.

Rising incomes in the secondary cities, particularly the provincial capitals, make mass market operations profitable immediately. These same cities are undersupplied with quality retail.

Increasing urbanisation makes it easier to reach consumers through various advertising media.

Facilities for retailing and wholesaling operations are improving.

Transport links such as high-speed rail, urban rapid transit systems, freeways and airports are improving intercity travel greatly. The government has a firm commitment to massive infrastructure investment.

Improving facilities for expatriates such as hotels, schools, hospitals and residences.

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2.6 FUTURE DEVELOPMENT TRENDS While the geographic emphasis of new development will fan out into the secondary and tertiary locations, there will also be many redevelopment and infill opportunities for centres in the first tier cities such as Beijing and Shanghai.

As less competitive centres are repositioned and new ones improve on the old in terms of design, configuration, leasing strategies, right-sizing and other factors, the Chinese shopping centre industry will converge toward a truly international level.

At the same time, the signs are that China’s retail sector is moving toward a diversified menu of formats that serves convenience shopping, discretionary shopping and entertainment needs. This is evident in some of the supermarket/hypermarket-anchored neighbourhood centres mentioned above.

Other key development trends to look forward to over the next five to ten years are as follows:

1. Tenant mixes will change, and in particular this will mean more experimentation with anchors as department stores continue to fade in appeal and competitiveness. Weaker department stores will depart the scene and while better ones will survive and even be supplemented by high-profile players from abroad, there is little reason that China will not follow trends overseas and use more contemporary anchor types. This can already be seen with growing ubiquity of hypermarkets, which will be supplemented by mega-entertainment tenants, junior anchors in categories such as casual dining, fast fashion and digital products, and precincts offering traditional and/or local products.

2. Shopping centres will need to be right-sized (usually downscaled) so that they meet individual market conditions. Unfortunately, the tendency toward building triumphal “trophy” centres is likely to persist as development spreads to secondary markets, and many of these centres will, like some of their predecessors such as the aforementioned South China Mall, not arrive at a happy ending. These will ultimately become a second generation of repositioning candidates.

3. Experimentation will occur with town centre formats involving open-air space, alfresco dining and community-oriented design elements, subject to climatic limitations.

4. Environmental sustainability will be increasingly important in the design of future shopping centres.

5. Mixed-use properties will be the dominant types of shopping centre projects, involving office, residential, hotel and sports facilities.

6. China’s malls, like those elsewhere in the world, will need to have state-of-the-art communications capability to enable consumers and retailers to tap into emerging retail technologies. Such technologies will become sufficiently important that for a mall operator not to facilitate them will be a competitive disadvantage, particularly in a country where young shoppers are so engaged with technology.

2.7 BARRIERS TO ENTRY FOR FOREIGN INVESTORS Before it joined the World Trade Organization (WTO) in 2001, foreign investment in the retail sector was limited. However, as a condition of its WTO accession, China committed to gradually eliminate market access barriers for foreign retailers and permitted them to establish a presence within China without geographic limitations.

Now, China regularly appears with other developing nations such as India and Russia on lists of attractive places for retailers to invest. The principal reasons for this are:

General attractiveness of the market in terms of economic growth and rising purchasing power

Fragmentation of the market. The top 20 retailers have less than 10% of the market and this will lend itself to investments aimed at consolidation

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As more international brands arrive in the market more will follow, creating a virtuous circle of success and opportunity for the better developers

One of the most widely-cited of these lists is A.T. Kearney’s Global Retail Development Index, which is published annually and ranks the top 30 emerging countries in order of attractiveness for retailers to do business. In 2011 China was ranked 6th. It has, however, fallen five places since 2010 and now sitting behind Brazil, Uruguay, Chile, India and Kuwait.

Still, according to World Bank “Doing Business Report 2011” rankings, China is an unimpressive 79th out of 183 in “ease of doing business.” With respect to investor protection it ranks 93rd, based on a surveys of the legal protection afforded minority shareholders’ interests against “directors’ misuse of corporate assets for personal gain.”

Dealing with construction permits is also a huge problem and China is ranked 181 out of 183 in this category, based on an analysis of the number of procedures required, the time required to clear the procedural hurdles and the inordinate cost of clearing them.

Despite these caveats China’s accession to the WTO in 2001 significantly eased the regulatory barriers facing foreign retailers seeking to establish themselves in China. Generally speaking, it is now much easier for foreign firms to operate in China than ever before.

2.8 GENERAL OUTLOOK & POTENTIAL OPPORTUNITIES The overall outlook for retail property within China, in our view, is sound. We expect continued strong nominal growth in retail sales over the next five years. This will be attributable to a number of factors, including ongoing strong economic growth; rising incomes; the increasing acceptance of western-style living and brand consciousness; the ongoing shift from rural areas to cities and the very strong desire by many international retailers to gain a presence within China’s major and secondary metropolitan areas.

Other factors of more secondary importance include higher levels of car ownership; increased demand for merchandise with elevated design and quality attributes; increasing acceptance of the hypermarket format for food and grocery shopping; and the increasing acceptance of the shopping centre as preferred format for all shopping needs.

Finally, international retailer chains have focused their efforts to date on the major cities of Beijing, Shanghai and Guangzhou. However, they are now beginning to turn their attention to secondary markets in the interior of the country where wealth and income are both lower and more dispersed. As they learn to reach these consumers more efficiently, new demand will be created and retail sales will accelerate.

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3 Chengdu Economy

It should be noted that this section relies heavily on data produced by various statistics agencies in Chengdu and China. Chinese statistics, particularly those that relate to cities, are not considered to be as reliable as those produced in more developed countries. Wherever we have used these statistics we have attempted to look beyond the numbers to ensure they make sense. However, in the absence of finding information that directly contradicts the data, we have relied on it. The veracity of official statistics is an ongoing concern for researchers in China

3.1 OVERVIEW OF THE CHENGDU ECONOMY

3.1.1 REGIONAL CONTEXT & BACKGROUND Chengdu is the capital of Sichuan Province and its resident population of 11.5 million in 2010 makes it the largest city in southwest China.

An ancient city founded in the fourth century BC, Chengdu has a number of historic sites that are strong draws for tourists. Some of these sites are associated with the Shu Han period around the middle of the third century, a particularly bloody period of Chinese history which has long been romanticised and celebrated in drama, poetry and other branches of the arts.

Other diverse tourist attractions in Chengdu include spectacular natural scenery, the cottage of a famous poet Du Fu, the Jujiangyan Irrigation System built in 256 BC, and a panda breeding and research facility.

Apart from its tourism significance, Chengdu is an important manufacturing centre, and as it occupies a strategic location between east and west China it has also become an important transportation hub and financial centre for the western part of the country.

Chengdu is a major railway junction and the terminal or starting point for a number of intercity highways, including major routes to the city of Chongqing 340 km away to the southeast and Xi’an 920 km away to the north-east. However, Chengdu is very remote from the other major centres in China with the exception of Chongqing, a fact that is reflected in drive-times: 20 hours to Xi’an, 47 hours to Beijing, 48 hours to Guangzhou and 53 hours to Shanghai (refer Map 3.1).

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CHENGDU IN CHINA MAP 3.1

This remoteness makes air links very important. The city is served by Chengdu Shuangliu International Airport which is one of the busiest in China and one of only four airports in the country with two runways.

Internally, Chengdu has an improving transportation network with a number of expressways connecting the downtown area of the city to its suburbs. Furthermore, rail links to Chengdu are improving. The fast rail linking Chengdu North station to Dujiangyan’s Qingchengshan station opened in May 2010, and the Chengdu – Nanjing link opened in early 2011. Fast rail lines to Chongqing and Dazhou are currently under construction. These routes are part of the government’s plan to increase Sichuan’s profile as a vital transportation and economic centre in southwest China, linking Chengdu via high-speed rail to other major cities in the region as well as the rest of the country. Chengdu East station will play a major role within this plan.

A seven-line subway system – the Chengdu Metro – is currently under construction with the first 26 km line (Line 1) having opened in early 2011. Map 3.2 shows the complete Metro. Line 1 is shown in red. Lines 2 and 3 are currently under construction.

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CHENGDU METRO MAP MAP 3.2

Chengdu has a humid subtropical climate and the weather tends to be humid, overcast and rainy for much of the year. (It has the dubious distinction of having fewer days of sunshine than London.) The city’s geographic position just south of the Qinling Mountains gives it shelter from the brutal northerly winds that blow down from Siberia in the winter. Thus, winters are apt to be short and mild while summers are hot and humid.

3.1.2 MACRO ECONOMY Chengdu, somewhat in competition with nearby Chongqing, is developing into western China’s financial centre. Major international financial institutions such as Citigroup, HSBC, Standard Chartered Bank and BNP Paribas have a presence in the city.

In 2010 the contribution to the economy of agriculture was 5% as compared with industry (45%), and of services (50%). Services is the fastest growing sector while agriculture’s share is declining.

Both services and manufacturing benefit from substantial inflows of foreign investment, amounting to US $2.9 billion in 2010, up from US $810 million five years ago.

Chengdu is a major manufacturing centre. Six key industrial products account for about 70% of industrial output: electronics, pharmaceuticals, food, beverage & tobacco, machinery, petroleum and building materials. However, despite the dominance of these six sectors the industrial base is quite broad, including light and heavy manufacturing, aluminium smelting and textiles (cotton, wool, silk and satin).

Chengdu is a well-established centre for electronics and information technology. Not only are several important electronics R&D institutes located there, but the Chengdu Hi-tech Industrial Development Zone, opened in 1988 and covering more than 82 sq.km, is host to a large number of international companies including Intel, IBM, Nokia, Motorola, Xerox and Microsoft, as well as home-grown companies like Lenovo.

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As noted above, tourism is an important revenue driver for the Chengdu economy. Domestic tourism revenue was more than ¥58 billion in 2010 and international tourism generated foreign exchange earnings of US $288 million. Tourism will benefit from the city’s expanding air links, particularly direct flights to and from foreign cities such as the twice-weekly direct connection with Tokyo recently launched in September 2011.

3.1.3 GDP GROWTH TRENDS & FORECASTS Chengdu experienced an average real GDP growth rate of 13.9% CAGR from 2001 to 2010, well above the 10.1% national average. Even in 2008, the year of the Sichuan earthquake, the city still managed 12.4% growth.

The economy continued to surge through the 2009 downturn with 14.7% growth compared with 8.7% for China as a whole. Chengdu is expected to continue outperforming the national economy during the forecast period by a similar percentage to the previous decade. On this basis, Urbis forecasts an average growth rate of just under 13% annually from 2011 to 2015.

Chengdu Real Average GDP Growth Rate 2001-2015 TABLE 3.1

15.0%

14.4% 14.5%

14.0%

13.5% 13.3%

13.0% 12.9%

12.5%

12.0% 2001-2005 2006-2010 2011-2015 (F)

Source : Chengdu Statistical Bureau, Urbis

This robust real economic growth will increase Chengdu’s nominal GDP from ¥555 billion in 2010 to ¥1,084.7 billion in 2015, representing a growth of 15.4% CAGR. Nominal GDP per capita more than doubles under this forecast from ¥41,253 to ¥87,536. In 2010 nominal GDP per capita in Chengdu was ¥41,253 compared to ¥29,699 for China as a whole.

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Chengdu Nominal GDP and GDP Per Capita 2001-2015 TABLE 3.2

1,200 120,000

GDP GDP Per Capita 1,000 100,000

800 80,000

600 60,000

GDP (RMB Bil) GDP (RMB 400 40,000

200 20,000 (RMB) Capita GDP Per

0 - 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source : Chengdu Statistical Bureau, Urbis

3.1.4 INFLATION Inflation in Chengdu has not been a significant issue throughout the past decade, with the exception of 2007-08 when a temporary spike driven mainly by food prices pushed CPI growth up to around 5%.

Notwithstanding the current spike in prices that is impacting all of China, price growth is expected to average 2% to 3% annually over the next five years, much in line with the longer term average. In terms of the retail price index, annual growth has tracked below that of the CPI over time and Urbis anticipates it will grow at just under 2% per annum over the next five years.

Chengdu CPI and RPI Annual Growth Rate 2001-2015 TABLE 3.3

3.5% 2.9% 3.0% 2.8%

2.5% 2.3%

2.0% 1.8% 1.6% 1.5%

1.0%

0.5% 0.2% 0.0% 2001-2005 2006-2010 2011-2015 (F)

1. F = forecast Source : Chengdu Statistical Bureau, Urbis

3.1.5 RETAIL SALES Disposable income per capita of urban residents has increased at an annual average rate of 10.9% over the past decade and in 2010 stood at ¥20,835, or about US $3,275 at current exchange rates. Although this is still not a great deal of money by developed country standards, it has underpinned a very rapid rate of growth in “social” retail sales, the official measure of retail activity in China (refer Chart 3.4).

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Chengdu Official Retail Sales and Retail Sales Growth Rate 2001-2010 TABLE 3.4

300 25.0% Official Retail Sales 242 250 Growth rate 20.0% 205 200 162 15.0% 150 136 116 101 10.0% 88 100 78 63 71

Retail Sales (RMB Bil) (RMB Sales Retail 5.0% 50 Retail Sales Per Capita (RMB) Capita Per Sales Retail

0 0.0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

1. Official Government estimate of retail sales includes wholesale trade, automotive sales and accommodation Source : Chengdu Statistical Bureau, Urbis

Using Urbis’ retail sales measure that excludes cars, wholesale trade and other items that are outside of conventional retail sales definitions, sales were estimated at ¥109.7 billion in 2010, having grown by 15% CAGR since 2001. Consistent with strong growth in disposable income per capita, continued urban population growth of about 3% and stable growth of tourism, retail sales should more than double to approximately ¥221.2 billion by 2015. This represents a CAGR of 14.9% over 2011-15.

Of the total retail sales, food sales are expected to grow from ¥66 billion to ¥124 billion while non-food sales increase from ¥44 billion to ¥97 billion. This means non-food spending will approach 44% of total retail sales in 2015 compared with 40% in 2010. This assumes continuing enhancement of the quality of Chengdu’s retail supply, including the ability of the city to attract high-profile international and domestic brands as well as a qualitative improvement in shopping centre space.

Chengdu Estimated Total Retail Sales 2001-2015, NOMINAL TABLE 3.5

250 For ecas t 200

97 150 83 73 61 100 51 44 36 Retail Sales (RMB Bil) (RMB Sales Retail 31 28 111 124 50 22 97 17 20 76 85 11 12 13 57 66 36 42 49 20 21 23 30 33 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Food Non-food

Source : Chengdu Statistical Bureau, Urbis

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3.1.6 POPULATION TRENDS & KEY DEMOGRAPHICS Chengdu’s official resident population reached 11.5 million in 2010 according to official statistics, of which an estimated 5.35 million live in the prefecture urban area (which includes nine districts). The urban population has been growing at an average rate of 2.1% CAGR over the last five years. This is greater than the 0.5% CAGR experienced by the balance of Greater Chengdu. Current growth trends are expected to continue and even accelerate slightly. The number of urban inhabitants is expected to increase to approximately 5.97 million by 2015. This number does not include a very significant number of transients and several thousand expats.

The schism in living standards between urban and rural Chengdu is massive. Net income per capita of the rural community (at ¥8, 205 in 2010) is less than 40% of that of urban residents (¥20,835). Nonetheless, life expectancy overall in Chengdu is about 80, well above the benchmark for China as a whole.

Chengdu Key Demographics TABLE 3.6

Characteristic Number %

Gender Males 2,694 50.3% Females 2,663 49.7% TOTAL 5,357 100.0% Age 0-14 915 17.1% 15-24 766 14.3% 25-39 939 17.5% 40-64 2,097 39.1% 65 plus 640 12.0% TOTAL 5,357 100.0% Adults by Lifecycle Stage Young Single 526 11.3% Young Married child < 10 875 18.8% Married youngest child >= 9 and < 19 704 15.1% Working Age Empty Nester 1,513 32.5% Working Age Older Single 243 5.2% Over 64 Married 480 10.3% Over 64 Single/Widow/Widower 321 6.9% TOTAL 4,662 100.0% Households Persons per Household 1 Person 168 10.3% 2 Persons 289 17.8% 3 Persons 531 32.8% 4 Persons 330 20.4% 5+ Persons 303 18.7% Total Households 1,621 100.0% Average Persons per Household 3.3 0.0% Source: Global Demographics

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3.1.7 ECONOMIC OUTLOOK The economic outlook for Chengdu is particularly bright for the same reasons that have driven its success since the “take-off.” The city is benefiting temporarily from infrastructure projects and also rebuilding after the Sichuan earthquake of May 2008, which killed nearly 70,000 people, left millions homeless and triggered a trillion ¥ rebuilding programme in the area.

A number of factors will contribute to the rapid development of Chengdu’s economy over the forecast period. These include:

Population growth as a result of the city’s power to generate employment and the fact that it is a resettlement target city from eastern China (the “Go West” campaign).

Its strategic location.

Its ability to attract foreign investment.

Infrastructure improvements, including the building of the Metro, road improvements and expanding international and domestic air connections.

Its status as a centre for high-tech industry.

The perception of a business-friendly local government.

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4 Chengdu Retail Property Market

This section provides a high level summary of the retail property market in Chengdu, including a discussion of major retail precincts, performance metrics and the market outlook. This provides important context in which to consider the Longemont Centre.

4.1.1 MAJOR RETAIL AREAS Chengdu’s retail market currently comprises three primary shopping districts: Chunxi Road, Yanshikou and Luomashi as well as eight secondary and developing shopping districts including Jianshelu, Xinnan Tiandi, the Wanda Area (or Chengren Road), Shawan, Guanghua, Zongbei, Guanweihui and the New Exhibition Centre area. The broad location of these is presented in Map 4.1, with a distribution of department store and shopping centre floorspace presented in Chart 4.1.

Distribution of Retail Floorspace by District SHARE OF DEPARTMENT STORE AND SHOPPING CENTRE FLOORSPACE BY DISTRICT CHART 4.1

Jianshelu, 15.1% Xinnan Tiandi, 9.5%

Wanda Area, 8.0%

Luomashi, 10.5%

Shawan, 7.9%

Guanghua, 8.1%

Yanshikou, 17.1% Zongbei, 0.3%

Other, 8.6%

Chunxi Road, 14.8%

Source: Cushman & Wakefield

While the focus for retail has been traditionally been ‘downtown’ in Chunxi Road, Yanshikou and Luomashi, in the future it is expected that city renewal and regional integrated development will result in new regional retail districts appearing. An example is the emerging Jianshelu district which is home to ‘the Mixc City’ and Ito Yokado. It is expected that this area will become the fourth key retail area in Chengdu.

There are seven major retail forms in Chengdu including pedestrian shopping streets; department stores; shopping malls/centres; supermarkets; warehouse stores; convenience stores and street shops. Many of the current retail projects are either low to mid-end department stores or community shopping centres, with a hypermarket or a supermarket as the anchor tenant.

Traditional department stores remain the major retail format found in Chengdu’s key retail areas, with the two most prominent brands being ‘Pacific’ and ‘Wangfujing’.

Shopping malls, however, are less well presented in Chengdu’s key retail areas with ten existing shopping malls at present, although this is changing rapidly. Two of the malls, namely New City Plaza and Top City, have not been particularly successful although Top City with its higher calibre of brands has fared slightly better of the two. The recently opened Galleria (within the Xinnan Tiandi district has attracted strong tenants (Zara, H&M, Uniqlo), and is a good quality centre reminiscent of what should be expected of future development in Chengdu. A further 28 shopping malls are proposed for Chengdu by 2014.

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MAJOR RETAIL PRECINCTS IN CHENGDU MAP 4.1

Source: Cushman & Wakefield

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Each of the three primary shopping districts and the two most relevant secondary shopping districts are now described in more detail.

CHUNXI ROAD Located in Chengdu’s CBD, Chunxi Road retail zone includes Chunxi Road, Kejia Lane, Dong Major Road, Zongfu Road and Hongxing Road with a total area of approximately 121 hectares. Many retailers have chosen to locate their flagship stores in this district, capitalising on the significant pedestrian flow that the city’s largest and most popular retail area creates. The precinct has a significant amount of pedestrian only outdoor malls, creating a vibrant and busy atmosphere.

Chunxi Road is also often compared with Wangfujing in Beijing or Nanjing Road in Shanghai and it is home to some of Chengdu’s better known mid to high-end retailers, such as the Pacific, Ito Yokado and Wangfujing Department Stores as well as more than a thousand individual retailers. Chunxi Road as a retail location, has a national reputation and draws not only on Chengdu itself but also on western China in general.

The first shopping mall project in Chunxi Road, Top City was opened in 2007 and since then the total shopping centre and department store retail stock for the area has risen to 276,000 sq.m GFA, accounting for 15% city’s stock as a whole. The Wangfujing Department Store, which opened in 1996, was the first prime retail project for the Chunxi Road.

Infrastructure improvements over recent years including the development of Metro Line 1, as well as numerous bus routes, have greatly improved accessibility to Chunxi Road and therefore have extended its catchment area.

YANSHIKOU Located in central Chengdu and at the intersection of Chunxi Road and Tianfu Square, Yanshikou is one of Chengdu’s traditional retail hubs with over 100 years of history. The area is positioned at the mid to high-end of the market and it attracts domestic travellers as well as local residents.

Despite the rapid development of other commercial districts in the city, Yanshikou has been able to maintain its charm and attraction as a prime retail area and it remains one of the most popular shopping precincts in Chengdu. Importantly, with the opening of Chengdu’s Metro Line 1, the area has become more accessible.

The major retail format in Yanshikou, in contrast to other retail areas, is more focused on department stores including Renhe Spring Department Store (Rendong), Maison Mode Lessin Department Store, Mall Parkson Department Store, Beijing Hualian Department Store as well as three others.

At present, the area has two main shopping malls, Fortune Centre and Yanlord Landmark Shopping Mall, with a total shopping centre and department store GFA of 319,000 sq.m, or 17.1% of the Chengdu total.

LUOMASHI Luomashi includes Babao Street, Xi Main Road and Ningxia Street and has a total department store and shopping centre GFA of approximately 195,000 sq.m. It is an area that is basically dominated by street shops which are occupied by low to middle end brands and it is targeted primarily at the local population.

To date there has only been very limited new retail development in Luomashi and this is principally been due to the area’s poor accessibility and traffic congestion problems, although the opening of Metro line 1 should have eased this pressure.

The area currently comprises two shopping malls, New City Plaza and Platinum Shopping Centre, with a total retail NLA of 100,000 sq.m and 26,000 sq.m, respectively. The area also has one department store, the Pacific Department Store (Quanxing Store), one supermarket (Carrefour Babao Street) and numerous street shops.

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XINNAN TIANDI (TIANFU NEW CITY) Within Xinnan Tiandi there are several significant retail complexes and most of these are positioned as one-stop shopping malls or home decoration centres where homemaker and furniture related retailers can be found.

The precinct is rapidly evolving. IKEA is a major draw card, and the 2009 opening of Galleria (with Uniqlo, Zara and H&M) has added to the precinct’s appeal. Suning Plaza is a large multi-level centre that has a soft opening recently, and remains only partially let. There are a number of other large scale retail centres including an Auchan hypermarket and a Fusen Noble House (furniture).

In the future, a major CapitaLand development is set to help support this area becoming a major retail precinct. Part of a mixed use development, the total floor area of the retail portion of this development is estimated at around 100,000 sq.m GFA.

This precinct is experiencing a lot of growth, and we expect its importance as a regional shopping location to be re-enforced over the next few years.

JIANSHE ROAD Jianshe Road is the most advanced emerging retail hub in Chengdu at present and it is expected to become the fourth primary retail area in Chengdu in the near future. This retail hub is located in the east of Chengdu City and on the Second Ring Road. To date this area has basically provided a community retail function targeting the residents in the surrounding area.

The first shopping mall in Jianshe Road, SM Plaza, was opened in 2006 and has an estimated NLA of 110,000 sq.m. Another major retail format in Jianshe Road is the department store, with major department stores in the area including Ito Yokado (Jianshe Road store) and Chengdu Hualian. A recent addition is the relatively well presented Paradise Walk which provides a good mix of mid-market fashion and food & beverage (F&B), and we understand is generating good trade, particularly on weekends.

WANDA AREA This precinct has developed around Wanda Plaza, one of Chengdu’s most well established shopping centres. Wanda Plaza is was opened in 2007, and contains around 150,000 sq.m GFA. It is anchored by a Vans department stores, an Ito Yokado department store and a cinema. The centre lacks some of the major international retailers that are present in Galleria or the CBD, but the centre remains popular nonetheless.

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4.1.2 SHOPPING MALL DEVELOPERS & MAJOR RETAILERS The majority of the shopping malls developed in Chengdu to date, have been developed by local development companies and they are also the operators of these centres. Over recent years however, domestic developers from other cities and some foreign developers, such as CapitaLand, have also entered the Chengdu market.

Chengdu’s Most Significant Shopping Mall Developers TABLE 4.1

Shopping Mall Developers Major Shopping Mall Projects in Chengdu Local Developers Chengdu Tongjianheneng Co Ltd New City Plaza Chengdu Sunto Co Ltd Fortune Centre Sichuan Defeng Investment Co Ltd Top City shopping Centre Sichuan Jinli Co. Ltd Hongpailou Plaza Foreign Developers Philippine SM Group SM Plaza CapitaLand (Singapore) CapitaMall Jiamao CapitaMall Jiaxianmao Plaza Raffles City Chengdu (2012) CapitaMall Meilicheng (2013) CapitaMall Tianfu (2013) Non-Chengdu Chinese Developers Dalian Wanda Commercial Property Pty Ltd Wanda Plaza Source: C&W

NON-CHENGDU LOCAL DEVELOPERS The Dalian Wanda Commercial Property Co Ltd is the development arm of the Wanda Group and is one of China’s best known commercial development companies. It was responsible for developing Wanda Plaza in Chengren Road to the east of Chengdu City, the first shopping mall to be completed in Chenghua District. This mall was completed in 2007 and has a total estimated NLA of 160,000 sq.m and is anchored by Ito Yokada and Vans department stores. Dalian Wanda is currently developing another Wanda Plaza shopping mall in the Jinniu District of Chengdu and this will have a total retail NLA of around 130,000 sq.m.

FOREIGN DEVELOPERS To date, the most active foreign retail development company in Chengdu has been CapitaLand which is one of Asia’s largest real estate companies. This company is headquartered in Singapore and has two retail centres in Chengdu - Jiaxinmao Plaza and the Jiamao Shopping Mall. Both of these centres are located in the Jinniu District in the northern part of Chengdu City.

Jiaxinmao Plaza opened in 2006 and has a total GFA of approximately 50,000 sq.m where Walmart is the anchor tenant. Jiamao Shopping Mall on the other hand, is a joint venture between CapitaLand and the Wanke Group and it first opened in September 2009 with a total retail NLA of 25,000 sq.m and is positioned as a mid-end shopping mall. CapitaLand has three other projects currently proposed or under construction:

1. The Raffles City development currently under construction in Zongbei (around 75,000 GFA);

2. A CapitaMalls mixed use development currently under construction in the Xinnan Tiandi district, near to the Galleria centre; and

3. CapitaMalls Meilicheng – a proposed retail shopping centre of around 60,000 GFA to be developed as part of Glamorous City in East Chengdu. Completion is expected in 2014.

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In addition to foreign developers such as CapitaLand, Kardan Land entered the market in 2010 with the development of Galleria Chengdu. Kardan Land is an Amsterdam based developer. In the future, foreign developers in Chengdu will also include Swire Group and Wharf Holdings both of whom have major sites under development in Chengdu’s city centre.

MAJOR RETAILERS Some of the major retailers operating in Chengdu are listed in Table 4.2.

Major Retailers in Chengdu CURRENT PROJECTS INVOLVING MAJOR RETAILERS IN CHENGDU, 2011 TABLE 4.2 %``VJ JRV` QJ `%H 1QJ :1]V1:H1`1H`Q%] QQ@:RQ V :J :`@ QJV]:` IVJ Q`V :J$`%=1J$ #V1=1J$$%:C1:J`Q%] &V1Q`CR`Q%] .V):1 QJ`Q%] )`Q%] :C1:J: .:J$`Q%] *.VJ$R%+VJ.V`Q%]

Source: Cushman & Wakefield

Taipei Pacific SOGO Group is one of largest retailers in Chengdu and it serves the mid to high-end retail market. They currently operate three department stores all located in prime retail areas of Chengdu and have total combined retail GFA 55,000 sq.m.

Another retailer, the Chengdu Renhe Group, has a number of projects in Chengdu. Two of these projects are department stores located on Renmin Road (East) and Renmin Road (South), and are positioned as high-end retail projects. A third department store is the anchor retail component of Renhe Spring Plaza situated in the Guanghua-Jinsha retail area on the Second Ring Road.

Ito Yokado, Isetan and Parkson are all international department stores that have established themselves in Chengdu. Both Ito Yokado and Parkson have multiple stores, with Ito Yokado continuing to expand their network.

Chengdu has also attracted most of the major international fashion brands, including fast fashion (Zara, Uniqlo, H&M), and luxury (i.e. Louis Vuitton). We expect this trend will continue as the focus for retailers increasingly shifts from China’s 1st tier cities to the 2nd and 3rd tier cities.

There are a number of major hypermarket and supermarket operators located in Chengdu. In terms of international operators, Carrefour, Walmart and Auchan all operate hypermarkets in the city and have undergone rapid expansion in China including Chengdu.

Auchan is a French retail operator which entered the market in Chengdu in 2007. It currently have just three stores in Chengdu, including a standalone hypermarket south of the CBD next to the Galleria Shopping Centre. It has only recently opened its store in the Huayang district of Chengdu which is around 10,000 sq.m NLA. It has plans to expand further into Chengdu with seven more stores over the next five years.

Carrefour, also a French hypermarket operator, entered the market in Chengdu several years ago and has expanded rapidly to have six stores.

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Walmart, an American retail giant, has two hypermarkets in Chengdu and has been rapidly expanding its operations in China.

Metro’s a German operator and a self-service wholesale retailer has stores in Chengdu.

Trust-mart was one of the first foreign retailers to enter the market in Chengdu and now has several stores.

There are also a number of hypermarkets operated by department stores, including Ito Yokado, Wanfujing and BHG.

Local supermarket operators include Hongqi and Huhui, both of which have a large number of small format supermarkets throughout Chengdu. Renrenle is a local hypermarket operator and has multiple outlets in Chengdu.

4.1.3 SUPPLY OF PRIME RETAIL, CURRENT & FUTURE The total supply of department store and competitive modern shopping centre floorspace is estimated at around 1.9 million sq.m GFA as at the 3rd quarter of 2011. This estimate excludes poorer quality strata titled centres and major specialty store such as hypermarkets and large electronics stores. If these are included the provision is equal to 5.7 million sq.m or an estimated 3.42 million NLA.

Modern shopping centres only entered the market in 2006. Since then, an average of 200,000 sq.m GFA of floorspace has been added every year. Department store development has been occurring over a longer period, with an average of 65,000 sq.m added every year since 2001.

If strata titled shopping centres and major specialty stores are included, then the average increase in floorspace since 2006 has been just over 500,000 sq.m per year.

Chart 4.2 presents the year on year increase in retail floorspace.

New Major Retail Developments By Year ANNUAL INCREASE IN FLOORSPACE OF DEPARTMENT STORES AND SHOPPING CENTRES (GFA) CHART 4.2

1.80

1.60 Shopping Mall Dept.Store Forecast 1.40

1.20

1.00

0.80 I1CC1QJ _8I 0.60

0.40

0.20

0.00 2002 2003 2004 2005 2006 2007 2009 2010 2011 2012 2013

1. Only includes shopping centres and department stores greater than 10,000 sq.m Source: Cushman & Wakefield

1. SHOPPING MALL SUPPLY FORECASTS As additional metro lines are opened, it is expected that increasingly new shopping centre floorspace will be developed outside the primary retail precincts in and around the CBD. While Chunxi Road and Yanshikou are expected to supply over 20% of new floorspace over the next few years, other districts will increase in importance with almost 20% of new floorspace expected to be developed in Guanweihui (southern growth area), over 17% around the new Exhibition Centre (far south), 7% at Xinnan Tiandi (around Galleria and IKEA), and 26% occurring outside these traditional areas (refer Chart 4.3).

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The new developments in the CBD are likely to be more focused towards the higher end of the market. Two of Hong Kong’s biggest developers, Swire Group and Wharf Holdings are developing major mixed use projects in the Chunxi Road area. Both of these projects are likely to be relatively high end with a range of luxury tenants being sought.

Distribution of Future Retail Floorspace by District SHARE OF DEPARTMENT STORE AND SHOPPING CENTRE FLOORSPACE BY DISTRICT CHART 4.3

New Exhibition Centre, Guanweihui, 19.8% 17.2%

Zongbei, 1.8% 8 Q Shawan, 5.0%

Xinnan Tiandi, 7.1% Others, 26.0%

Jianshe Road, 2.3%

Yanshikou, 5.7%

Chunxi Road, 15.1%

Source: Cushman & Wakefield

Over time it is expected that both Yanshikou and Tianfu Square will gradually be transformed and expanded and most of the future development (including the expansion of Renhe Spring department store) will be mid to high-end.

It is also expected that the Swire project will strengthen Dacisi retail area, speeding up the eastern expansion of Chunxi Road business district and will assist in integrating the three areas: Dacisi, Chunxi Road business district and Dongda Street.

The pipeline of shopping centre development remains very strong as shown in Chart 4.4. Of the known retail developments over the next few years, almost 80% will be dedicated to shopping centres. It is estimated that between now and 2014, 3.3 million sq.m of modern shopping centre floorspace will come into the market excluding the Longemont Centre. This compares to a current supply estimated supply 1.0 million sq.m GFA. On a per capita basis, we estimate that this represents a substantial increase in provision from 0.10 sq.m NLA per urban resident to 0.48 sq.m NLA per urban resident.

Chart 4.5 presents the major retail developments that are forecast to occur over the next three years. As can be seen, there are going to be a number of very large projects. Five of the projects are to be greater than 200,000 sq.m GFA, while another seven will be more than 100,000 sq.m GFA.

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Future Major Retail Developments SUPPLY OF RETAIL FLOORSPACE BY MAIN TYPES (GFA) CHART 4.4

5 5 V]:` IVJ Q`V 5 5 .Q]]1J$*VJ `V^ `: : 1 CV_ 55 .Q]]1J$):CC^VJHCQ VR5 1J$CVI:J:$VIVJ _ 55 ]VH1:C 7 Q`V^_

55 .V`

sq.m 5

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

1. Specialty stores include hypermarkets, supermarkets and large furniture and electronics stores. Source: Cushman & Wakefield

Future Stock GFA MILLION SQ.M CHART 4.5

0.35 2012 2013 2014 0.30

0.25

0.20

0.15 Million sq.m Million

0.10

0.05

0.00 China ResourcesVanguard Fun2 NorthWalk Paradise Central City Swire Project Swire Renhe Spring DepartmentStore The Atrium Raffles CityChengdu project OCC Mixc MOI Tiandi 9S Square RuianTiandi Chengbei Joy City Mall Tianfu Forte Business Centre Meili Mall Shihao Plaza-Shopping Mall Chengdu International Finance Centre Plaza Estates Chinese Centre Trade World New Century Global Centre Global New Century Dept. Store Tianhong Wangfujing Shopping Centre Shopping Wangfujing Centre MOI Jinniu Wanda Plaza Xiongfei Lingxiu International phase2 Mall Jinniu Maison Mode Aux Plaza Creative Times Square ChengduInternational Commercial Center Silver Square Shihao Plaza-Ito Yokado hopping Centre hopping

Source: Cushman & Wakefield

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4.2 CHENGDU RETAIL MARKET PERFORMANCE

4.2.1 RETAIL RENTALS Average retail rents for first floor specialty space in Chengdu have been provided by Cushman & Wakefield and are summarised in Chart 4.6 for the main retail areas.

The rents achieved are highest in the Chunxi Road precinct while high rents are also achieved in Yanshikou. In Chunxi Road, the rents typically range between ¥1,000 and ¥1,500 per sq.m per month. In Yanshikou the range is somewhat lower at between ¥600 and ¥1,200 per sq.m per month.

The remaining precincts remain less established and generally less popular as retail destinations. As a result, these rents remain significantly lower, generally between ¥100 and ¥500 per sq.m per month.

Stronger international tenants are generally able to attract ‘turnover only’ rent conditions, making the rent they pay contingent on their performance and the performance of the overall centre in which they are located.

It should be noted that there is generally a large difference between rents achieved in prime locations (ground floor, street frontage) and in upper levels. Depending on the layout of the centre and strength of upper level tenants, average rents on upper levels can be as little as a quarter of that achieved on the ground floor, although in most cases the gap is not as significant.

Shopping Centre Rents MAJOR RETAIL PRECINCTS, GROSS RENTS, 2011 CHART 4.6

Chunxi Road

Yanshikou

Luomaishi

Jianshe Road

Xinnan Tiandi

Wanda

Shawan

Guanghua

0 200 400 600 800 1000 1200 1400 1600 ¥ per sq.m per month

Source: Cushman & Wakefield

In department stores, rents are generally calculated on a turnover basis. Chart 4.7 shows that tenants generally pay between 20% and 30% of turnover as rent, with the majority in the 23%-25% range.

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Department Store Rents MAJOR RETAIL GROSS RENTS, 2011 CHART 4.7

Chunxi Road

Yanshikou

Luomashi

Jianshe Road

Guanghua

15 17 19 21 23 25 27 29 31 % of turnover payable as rent

Source: Cushman & Wakefield

Rents across Chengdu continue to rise due to strong demand from both local and international retailers coupled with strong underlying growth in retail turnover. According to the rental series prepared by Savills the second quarter of 2011 saw first floor shopping mall rents increase by around 1.6%, while prime rents increased by almost 2%. This follows a relatively strong period since 2008 which has seen consistent growth in rents (refer Chart 4.8).

City Wide Average Rent Index INDEX OF AVERAGE RETAIL RENTS FOR CHENGDU (1ST FLOOR SPECIALTY) ,2Q 2011 CHART 4.8

Source: Savills Research & Consultancy

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4.2.2 INVESTMENT YIELDS & CAPITAL VALUE Unlike the more mature retail property markets such as Beijing and Shanghai which have witnessed some en-bloc retail asset transactions, Chengdu is still in its infancy in terms of retail investment. Strata- titled transactions in Chengdu’s retail market however, remain strong with the average sales price for strata-titled shopping mall space in the main retail areas ranging as per the table below.

SALES PRICE AREA ¥ PER SQ.M

Chunxi Road 90,000-120,000

Yanshikou 70,000-100,000

Luomashi 20,000-30,000

Source: Savills Research & Consultancy

The most recent major transaction that we are aware of was the sale of a half share of Galleria Chengdu. The net price paid was ¥422 million, equivalent to around ¥16,000 per sq.m for a 100% share.

4.2.3 OCCUPANCY RATE The overall average vacancy rate within the main retail precincts of Chengdu is currently estimated at around 7%. However, this differs depending on the quality of the precinct and the length of time it has had to establish itself.

The more established Chunxi Road and Yanshikou have (effectively) full occupancy, as do many of the regional districts. The regions that contain vacancy are:

Luomashi, which has suffered as Chunxi Road and Yanshikou have continued to expand and develop;

Xinnan Tiandi, which has seen a large increase in floorspace recently and is only slowly seeing it lease up; and

Jianshe Road which suffers from some struggling assets, and we suspect a lack of metro connections.

Vacancy Rates MAJOR RETAIL PRECINCTS, APPROXIMATE VACANCY, 2011 CHART 4.9

8 Q Q 8 Q 8 Q

8 Q Q 8 Q Million sq.mMillion

8 Q Occupancy Rate Q 8 Q 8 Q Chunxi Yanshikou Luomashi Jianshe XinnantiandiWanda Area Shawan Guanghua Zongbei Road Road

V]:` IVJ Q`V .Q]]1J$):CC HH%]:JH7+: V^+$_

Source: Cushman & Wakefield

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4.3 FUTURE TRENDS & MARKET OUTLOOK

4.3.1 SHOPPING MALLS COMING OF AGE With China’s first tier cities continuing to develop strongly, many developers are finding it increasingly difficult to secure prime sites or even suitable sites in non-central locations within these cities. In addition, some retailers, particularly those who are already well established in these cities, are also finding it difficult to find new locations to open stores without cannibalising existing store sales. Chengdu however, as a second tier city, has not yet developed to the same extent as the first tier cities and represents a good opportunity for both developers and retailers.

The Chengdu retail market is primarily dominated by department stores and street retail and with relatively few modern, good quality shopping malls. Shopping malls however, are becoming more popular as the market matures and the buying habits change as well as retailers deciding to locate in the city.

Illustrative of the changing retail landscape and quality of new development is the recently opened Yanlord Landmark centre located at the intersection of Renmin Road and Xinguanghua Street. This centre opened earlier this year and has flagship stores including Hugo Boss, Louis Vuitton, Prada, Rolex, Dunhill, Ports1961 and Longchamp. The Galleria in Xinnan Tiandi also represents a ‘step-up’ for shopping centres located outside of the CBD in terms of quality of fit out and tenancies secured.

4.3.2 DEPARTMENT STORES EXPANSION PLANS In addition to the strong interest in shopping malls there has been considerable interest in Chengdu shown by the department store chains. The more active chains in this regard include Parkson, Grandbuy, Chengdu Hualian, the Chengshang Group and Ito Yokado.

4.3.3 RETAILER DRIVEN DEVELOPMENT PLANS In order to tie in retailers with their projects on a long term basis and attract the best retailers, developers are increasingly consulting retailers about their requirements during the planning stage of the shopping centres and are adapting their plans to accommodate the retailer needs. This practise is becoming more commonplace and should lead to more rational development with fewer vacancies.

4.3.4 EXPANSION INTO THE SUBURBS In line with government’s plans to develop Chengdu to the south and east of the city centre, developers are now starting to include retail centres as part of their mixed use projects in these newly developing areas. CapitaLand is one such developer, with a major mixed use project currently under development in Chengdu’s southern suburbs.

4.3.5 FUTURE MARKET OUTLOOK Over the next three years there will be a significant amount of new shopping centre and department store floorspace coming onto the market in Chengdu, both in the established retail areas and in the newly developed suburbs. The scale of this development is bound to take some time to be fully absorbed, and could result in some softening of rents. Inevitably, some will benefit more than others. Shopping centres of poorer quality and in weaker locations are likely to experience increased vacancy. However, centres that are well maintained, well located and well tenanted should remain in high demand.

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5 Chengdu Longemont Railway Commercial Development

5.1 CHENGDU EAST VILLAGE Chengdu East Village is located in the south east of Chengdu approximately 8km from the city centre. It covers an area of 41 sq.km and is a 15 minute drive from Chengdu Shuangliu International airport (refer Map 5.1).

Within the context of Chengdu as a whole, it is the intention of the government that Chengdu East Village will provide a critical mass of modern service industries with a focus on the cultural and creative industries. It has also been designated as the urban and commercial sub-centre of Chengdu with associated industry and commercial uses. There are several other municipal property domains including the financial and business district, commercial and trade and industrial domains that are located elsewhere in Chengdu.

The East Village area is subject to an evolving masterplan which has been zoned into major phases of development. The north east section of the East Village is Phase 1 of the development and will be an ecological zone. Immediately south of the ecological zone will be Phase 2, which includes residential development as well as office, public service facilities and supporting retail. The third stage of development is situated south of Phase 2 and is proposed to include a mix of residential, open space, sports and public facilities and office and commercial uses.

An industrial zone is located to the south east of the East Village masterplan and will be part of an early phase of development. The commercial zone is located in the north west of the East Village which includes Chengdu East Railway station, a major integrated transport hub.

5.1.1 CHENGDU EAST RAILWAY STATION Chengdu East Station is major transport hub for Chengdu providing high speed rail links with the wider Sichuan province and beyond. The station is contained in a five storey building and has 14 platforms and 26 tracks. It is the largest integrated passenger transport hub in western China. There are currently eight trains running from Chengdu to destinations such as Changsha, Guilin, Guangzhou and Wuhan. The station will be the first departure station for lines linking Sichuan to other provinces.

It is served by a major bus interchange which provides transfers to inner Chengdu and its suburbs. It will also be served in the future by Metro Lines 2 and 7 providing direct links to Chengdu city centre and its western suburbs.

5.2 LOCATION & ACCESSIBILITY OF CHENGDU LONGEMONT RAILWAY COMMERCIAL DEVELOPMENT The Longemont Centre will be located within the East Village and immediately adjacent to the High Speed Railway Station in East Chengdu (refer Map 5.1). In terms of accessibility, this site has a number of important attributes:

The High Speed Railway Station is likely to generate relatively high levels of visitation to the area including both local residents from throughout Chengdu and tourists, particularly Chinese tourists. This should provide the centre with good exposure to a broad range of potential shoppers.

In addition, the two metro stops for Lines 2 and 7 together with the bus interchange will help to reinforce the centre’s regional draw, exposure and accessibility. Line 2 is currently under construction with completion expected in 2014.

The centre will be well served by road linkages. The Third Ring Road runs adjacent to the site, while the lower order Ying Hui Lu (road) travels east-west in front of the station providing direct access into CBD. It is expected that as the East Village develops, the quality of road infrastructure should improve to support the taxi and bus interchanges.

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The broader Chengdu East station precinct will include a number of other important elements – a hotel, office space, a wholesale centre, aquarium and theme park. While most of these elements are located on the opposite side of the station to the Longemont site, both sides are connected via above-ground and underground linkages, ensuring easy connectivity. As the Longemont site will contain the main entertainment and shopping elements, it is expected that there will be high shopper awareness for it.

The presence of the railway line and ring road nearby are important and of great assistance to the site but they also present a slight drawback as well. Major pieces of infrastructure like this tend to limit accessibility to the centre for nearby residents. Even if good access is still maintained, they can act like a mental barrier for residents thereby limiting the potential to draw business from the walk-up catchment. The Longemont site is located on the western side of the station, and should draw strongly from the walk- up population on this side. With easy above-ground and underground linkages between both sides, walk-up custom should also be good from the eastern side of the station.

LOCATION OF LONGEMONT COMMERCIAL DEVELOPMENT MAP 5.1

5.3 DESCRIPTION OF THE PROPERTY Final details of the project have not yet been made available by the client to Urbis. From the information provided to us however, our understanding of the development is as follows:

The centre is sited in Chengdua District within the Third Ring Road of South-East Chengdu, Sichuan Province, China.

Development of the centre is expected to be completed by 2014.

The centre will have a direct underground connection via its basement level to the High Speed Rail Station, both Metro stations (Lines 2 and 7), and will also have access to long and short distance bus routes and taxi connections.

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The current estimates of site and developed floor area on completion are as follows:

SIZE IN SQ.M

Site Area 48,273

Total Retail (GFA) 365,000

Below Ground Car Park (GFA), 2 Levels 90,260

Total GFA, Including Car Park 455,260

We understand the centre will offer a large variety of retail and entertainment choices targeted at middle income shoppers and including a supermarket, amusement park, local and international fashion, food and beverage brands and other retailers. While details remain to be finalised, on the basis of previous similar projects being undertaken by the developer, we expect that the tenant mix of the centre will be along the following lines:

− Basement 2: F&B, Supermarket & Lifestyle.

− Basement 1: F&B, Supermarket & Lifestyle.

− Level 1 – Jewellery

− Level 2 – Shoes

− Level 3 – Children

− Level 4 – Sports and sports related

− Level 5 – Home Accessories, F&B, ice-skating rink

− Levels 6 & 7 – Leisure & entertainment concepts such as cinema, aquarium & F&B outlets.

− Level 8 – Leisure & entertainment – theme park.

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6 Trade Area Analysis

Having described the proposed project and its location, this section of the report now defines the resident trade area from which we expect the Longemont commercial development will draw the majority of its trade. We provide details of the estimated size of this population, its forecast growth and the level of retail expenditure that can be expected.

6.1 TRADE AREA DEFINITION The main market the Longemont commercial development is expected to serve will be the local resident catchment population as show in Map 6.1 below. This includes the eastern suburbs of Chengdu but does not extend into the central area of Chengdu given the level of existing retail development in this area. With the exception of the secondary east sector, the defined trade area does not extend beyond a maximum distance of 5 km from the centre. Each of the trade area sectors are now elaborated upon in more detail as follows:

The primary trade area extends to the Third Ring Road at its eastern boundary and to the Nan River at its western boundary. It is bound to the north by the Shuangqing Road and to the south by the Jingming Road. The primary trade area falls almost entirely within the Chenghua district of Chengdu and is contained within a 2 km radius.

The secondary south trade area extends from the Jingming Road to the Jing’an Road in the south and is bound to the east by the Third Ring Road, and to the west by the Nan River. The secondary south trade area is situated on the edge of the Jinjiang district of Chengdu.

The secondary east trade area extends from the east ring road out to the Chengdu Ring Expressway (Toll Road) and as far north as the G42 Hu Rong Gao Su Road. It is bound to the south by the Cheng Long Road. The area incorporates the University of Chengdu and has a large student population. It is situated within the district of Longquanyi, which is typically less dense in population than other inner districts of Chengdu.

The secondary west trade area extends from the Nan River to the Second Ring Road and sits partially within the Chenghua district and the Jingjiang district. Whilst the density of the development and the population density in both of these districts is reasonably high, the density of the population in the secondary west trade area is lower than average at present.

The secondary north trade area extends from the Shuangqing Road to the G42 Hu Rong Gao Su Road and is bound to the east by the Third Ring Road. It falls within the Chenghua district of Chengdu, although the density of development in the area as lower than the rest of the district.

In addition to the resident trade area defined above, given the size of the proposed Longemont development and its situation at a major transport hub, we expect the development will also draw a sizeable proportion of its trade from beyond its resident trade area, including the rest of Chengdu City. We have therefore also considered the population and likely retail spending levels of the remainder of Chengdu prefecture city.

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RESIDENT TRADE AREA MAP 6.1

6.2 TRADE AREA POPULATION & CHARACTERISTICS Small area population statistics of China are not available. We have therefore estimated the population of the trade area sectors and their future level of growth based on the following:

The Chengdu district level populations and densities published in the Chengdu 2011 Statistical Year Book.

An allowance for the non-official resident population, which includes migrant workers and official residents of other parts of Schiuan who do not have a Hukou and are therefore not counted within the population figures reported in the Statistical yearbook.

The district level population numbers and densities published in the preliminary results of the China 2010 Census (although these must be treated with caution due to their preliminary nature and likely forthcoming revisions).

Historic district level and Chengdu level growth rates in population.

The existing density of development within each trade area sector relative to Chengdu, based on observations during our field work.

Information on the scale and nature of forthcoming residential developments within the trade area sectors provided to us by Cushman & Wakefield (refer Map 6.2 and Table 6.1 below).

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MAJOR RESIDENTIAL DEVELOPMENT MAP 6.2

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Major Residential Development 2011-2035 TABLE 6.1

No. Units Est. Occ. Remaining Est. Occ. Project Name Total Units currently selling Date (C&W) Units Date (Urbis) 1.A Glamorous City 5,000 2,000 2011 3,000 2015 2.Fancy Town 4,191 102 2013 4,089 2018 3.Brilliance 2,300 2,300 2012 0 2012 4.First City 4,056 952 2012 3,104 2016 5.Beautiful Forest 1,095 400 2011 695 2012 6.The Botanica phase6 1,248 300 2013 948 2014 7.The Pure Garden 932 932 2011 0 2011 8.Sky Villa 4,280 1,000 2013 3,280 2017 9.Xinyuan phase2 1,632 1,632 2011 0 2011 10.Xinyuan phase3 2,780 2,780 2012 0 2012 11.Tianfu Guanjin 1,922 385 2013 1,537 2015 12.Landsea Green Block 604 604 2013 0 2013 13.Mia Centre 1,683 200 2013 1,483 2015 14.Loncin Nine Miles 1,500 1,500 2013 0 2013 15.Generation. W 3,000 1,000 2013 2,000 2016 16.Ask for More 2,600 2,600 2011 0 2011 17.Soar 1,230 1,230 2013 0 2013 18.Life Is So Beautiful 586 249 2012 337 2012 19.Midtown East 2,100 1,400 2011 700 2012 20.The Orion 242 242 2013 0 2013 21.Shangdong Meilin 960 381 2011 579 2012 22.Twenty-Four City 20,000 1,360 2012 18,640 2035 23.The World of Wealth and Worship 713 150 2013 563 2014 24.Zhulin Shangshu 791 791 2013 0 2013 25.International City 3,000 3,000 2011 0 2011

Source : C&W; Urbis

Table 6.2 below sets out the estimated current resident population of the trade area together with our forecasts for future growth.

In 2011 the estimated population of the primary trade areas is approximately 67,480 people. This area is anticipated to experience a considerable amount of new development including several residential development projects as part of the East Village Masterplan. Population growth is forecast at 7.7% CAGR to 2016 when most of the new residential development is planned for completion, falling to 2.9% CAGR thereafter as the sector starts to reach capacity.

The secondary trade area population is estimated at 325,190 in 2011. As with the primary trade area, there is a considerable amount of new residential development forthcoming over the next few years. Whilst population density in much of the secondary trade area, particularly the secondary east trade area, is currently low relative to inner Chengdu, the scale and pace of new development planned for the area will increase this density. We expect the population to increase by 4.6% CAGR over the next four years and by 3.2% CAGR thereafter.

Given the size of the Longemont Centre and its location next to the railway station, it is of some relevance to consider the size of the Chengdu city overall. The population of the remaining Chengdu prefecture city is estimated at 5.9 million in 2001. We expect this to grow slightly above the level of growth in the previous five years (2.1% CAGR) at 2.4% CAGR over the next four years.

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Longemont Resident Trade Area Population 2011-2020 TABLE 6.2 Sector 2011 2016 2020

Primary 67,478 97,839 109,692 Secondary Secondary North 33,902 39,187 43,977 Secondary East 210,725 259,238 291,330 Secondary South 56,179 69,747 77,893 Secondary West 24,288 38,709 47,526 Total Secondary 325,094 406,881 460,727 Main Trade Area 392,571 504,720 570,419 Rest of Chengdu Prefecture City 5,922,399 6,678,905 7,393,404 Average Annual Change (no.) 2011 - 2016 2016 - 2020 Sector Primary 6,072 2,963 Secondary Secondary North 1,057 1,197 Secondary East 9,703 8,023 Secondary South 2,714 2,036 Secondary West 2,884 2,204 Total Secondary 16,357 13,461 Main Trade Area 22,430 13,140 Rest of Chengdu Prefecture City 151,301 142,900 Average Annual Growth (%) 2011 - 2016 2016 - 2020 Sector Primary 7.7% 2.9% Secondary Secondary North 2.9% 2.9% Secondary East 4.2% 3.0% Secondary South 4.4% 2.8% Secondary West 9.8% 5.3% Total Secondary 4.6% 3.2% Main Trade Area 5.2% 3.1% Rest of Chengdu Prefecture City 2.4% 2.6%

Source : Urbis

In terms of socio-economic characteristics, details of the Chengdu prefecture city population were set out in the Section 3 (refer Section 3.1.6). In comparison, the current resident trade area is less densely populated than most of Chengdu City and is characterised by a higher levels of industrial and agricultural development and open space. This is particularly true of the secondary east trade area sector.

The trade area also incorporates the University of Chengdu and has a large student population. This, together with the greater prevalence of secondary and tertiary industries compared to inner Chengdu’s central area, suggests that per capita incomes on the whole will be lower than average.

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As new development occurs in the trade area, including the residential development and the commercial development proposed as part of the East Village trade area, we expect the quality of this to be higher than the existing development in the area, This, in turn, is likely to attract higher incomes over time.

6.3 TRADE AREA RETAIL EXPENDITURE The retail spending levels of the resident trade area and the reminder of Chengdu prefecture city are set out in Table 6.2 below and are in nominal terms with inflation assumed at 2.3% CAGR.

The total size of the retail spending market in the primary trade area is estimated at ¥547 million in 2011 and is forecast to increase to ¥1,286 million by 2016 and to ¥2,125 million by 2020. This substantial growth is attributable to the anticipated increase in resident population together with the forecast nominal increase in per capita retail spending at 10.1% CAGR.

The size of the total secondary trade area spending market is forecast to increase from ¥2,732 million in 2011 to ¥6,850 in 2016. This equates to a CAGR of 15.3%. The rest of Chengdu’s prefecture city is also forecast to experience strong growth (at 12.8% CAGR) in its retail spending market through to 2016.

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Resident Trade Area Retail Spending Market 2011-2020, ¥ NOMINAL TABLE 6.3

Population ('000) Av Annual Growth (%) 2011 2016 2020 2011 - 2016 2016 - 2020

Population

Primary 67,478 97,839 109,692 7.7% 2.9% Secondary Secondary North 33,902 39,187 43,977 2.9% 2.9% Secondary East 210,725 259,238 291,330 4.2% 3.0% Secondary South 56,179 69,747 77,893 4.4% 2.8% Secondary West 24,288 38,709 47,526 9.8% 5.3% Total Secondary 325,094 406,881 460,727 4.6% 3.2%

Total Trade Area 392,571 504,720 570,419 5.2% 3.1% Chengdu City

Rest of Chengdu City 5,922,399 6,678,905 7,393,404 2.4% 2.6%

Per Capita Retail Spending (¥; Nominal)

Primary 8,113 13,145 19,368 10.1% 10.2% Secondary Secondary North 8,113 13,145 19,368 10.1% 10.2% Secondary East 8,113 13,145 19,368 10.1% 10.2% Secondary South 9,015 14,606 21,520 10.1% 10.2% Secondary West 9,916 16,067 23,673 10.1% 10.2% Total Secondary 8,404 13,674 20,176 10.2% 10.2%

Total Trade Area 8,354 13,571 20,021 10.2% 10.2% Chengdu City

Rest of Chengdu City 9,015 14,606 21,520 10.1% 10.2%

Retail Spending Market (¥ million, Nominal)

Primary 547 1,286 2,125 18.6% 13.4% Secondary Secondary North 275 515 852 13.4% 13.4% Secondary East 1,710 3,408 5,643 14.8% 13.4% Secondary South 506 1,019 1,676 15.0% 13.3% Secondary West 241 622 1,125 20.9% 16.0% Total Secondary 2,732 5,564 9,296 15.3% 13.7%

Total Trade Area 3,279 6,850 11,420 15.9% 13.6% Chengdu City

Rest of Chengdu City 53,389 97,552 159,110 12.8% 13.0%

Source : Global Demographics; Urbis

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6.4 TOURISM SPENDING MARKET In addition to the resident spending market, retail spending from tourists will also be important for the Longemont commercial development. Its location at Chengdu’s East Railway station which provides fast rail services to the rest of China will mean it is the likely terminus point for many visitors to Chengdu.

The tourist market in Chengdu is a highly publicised and growing part of the local economy. Tourism data shows that Chengdu received around 800,000 international visitors and around 68 million domestic visitors in 2010 (refer Table 6.3). Around 10% of domestic visitors come during Golden Week.

The Chengdu Statistics Bureau estimates that the domestic tourism market generates tourism revenue of around ¥58.4 billion, including expenditure on non-retail items. Urbis estimates that ¥11.7 billion of this is directed to retail. When compared to the overall size of the Chengdu retail spending market, the tourist contribution to retail expenditure is of some importance, making up over 14% of total retail expenditure.

Longemont commercial development is likely to attract tourist expenditure by virtue of its size and location and this is expected to be a key strength of the development.

TABLE 6.3 – CHENGDU TOURISM

1990 2009 2010

International Visitors (mil) 0.13 0.59 0.80

International Visitor Income (USD 16.9 236.5 288.9 mil)

Domestic Visitors (mil) - 55.1 68.2

Domestic Visitor Income( ¥ bil) - 48.5 58.4

Source: Chengdu Statistics Yearbook, 2011

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7 Competition

Being a large retail centre of more than 450,000 sq.m GFA located next to the high speed railway station, the Longemont development is likely to draw from a wide trade area, including most of Chengdu. In this context, the subject centre will compete with a large number of shopping centres and shopping centre precincts. The most important of these are located in the eastern half of Chengdu (approximately east of the Number 1 Metro line) and they are discussed below.

7.1 MAJOR RETAIL PRECINCTS As noted above, the scale of the subject development and its location next to the high speed railway station will result in the centre competing to some degree, with all major retail precincts in Chengdu. These have been discussed in detail in Section 4.1.1. The precincts with the most influence (due to their proximity) are likely to be:

Chunxi Road Yanshikou Luomashi

Jianshe Road Wanda Area

Retail precincts such as Xinnan Tiandi and Zongbei which are further afield will also be relevant due to the network of ring roads that should enable residents to move around the city relatively easily during non-peak hours (as opposed to driving into the city).

In addition to serving the fast intercity rail, Chengdu East station will also have a metro stop for the yet-tobe-built Lines 2 and 7. When completed, these will change the dynamics of the competitive environment as access from various parts of the centre will become relatively more easy.

Metro Line 2 is to link through the Tianfu Square, then travel to the north-west. This will open up access from these north western suburbs which are relatively underserved for major retail precincts. However, they will also be given greater access to the CBD.

Metro Line 7 will provide direct links to the north of the subject site towards the north eastern suburb of Longtan. From Chengdu East station, it will continue to the west through Xinnan Tiandi (Sunning Plaza, Galleria and IKEA), thus increasing the competition with this district.

While these additional metro lines will increase the number of centres which the subject centre will compete, it will also open up larger markets and improve access to the centre.

7.2 SHOPPING CENTRE COMPETITION – CURRENT In Table 7.1 and Map 7.1 we have presented the major competing shopping centres that are currently trading in Chengdu. The list is limited to those major (>70,000 sq.m GFA) centres located within 10km of the subject site, and those smaller centres located within 5 km.

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CHENGDU SHOPPING CENTRE COMPETITION MAP 7.1

As can be seen, there are some major shopping centres that will compete with the subject site. However, we consider that the current competitive environment is not overly limiting:

The better regional centres (Wanda Plaza, Paradise Walk, Galleria) are 6km+ from the subject site.

Competition located closer to the city is generally less accessible for many residents due to congested roads, and the subject site’s good location near to the ring road.

The surrounds of the subject centre should see strong population growth over the next decade which will provide the centre with its own catchment.

While the current competition in this location is not a major limitation, future competition is likely to change this. This is discussed in the next section.

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D-61 URBIS TABLE 7.1 7.1 TABLE CHENGDU PERENNIAL.DOCX CHENGDU ears to trade well. well. trade ears to Old department store with a lack storeOldwith a department brands. strong of however. good is flow Pedestrian Good pedestrianflow thanks location major to on road with high densitypopulation. pedestrianGood flow, especially weekends. on Brand well. relatively performs F&B is ok, strength with centre, the at traffic strong drives Carrefour weekends busy. F&B app recentlyOnlyopened withsoft opening.a Continuesto veryvacancy.have high Cinemaand large Suning store strengths,are but needs to tobe leased improve up performance. Good pedestrianGood flow, especially weekend. Good on strong anchors, relatively well maintained centre. traffic foot generate to struggled has vacancy, High although improving. local in flow pedestrian strong and location Excellent Somearea. tenants have struggled, however,resulting turnover. tenant in a soft openingHad late in 2010, andhas struggled to reach100% occupancy.Tenants are relatively strong, occupancybut improve. needs to Soft opening in 2010 resulted in a slow first few months. Centre almost fullyleased trading now, and better particularly on weekends. Hasa good fast-fashion tenant mix.

Wanda Cinema, Super Star KTV, Lee Nike, KFC, McDonalds, Wal-Mart. Adidas, Nike, House, Rolex,Tudor, Loccitance, Theory, Roem, GXGLacoste, 1978, CK Jeans iceCinema, skating rink. Pull&Bear, Stradivarius, Eland, La Uniqlo. Chapelle, MAJOR TENANTS MAJOR TENANTS COMMENTS Only, Jack & Jones, Vero Moda, Moda, Vero Jones, & Jack Only, KFC, Teenmix square,Food Uniqlo,Eland, Teenie Weenie Starbucks, Earth, Yellow Coodoo, Espirit.Lee, Hotwind, UME Cinema, Poly Cinema, Xinya, Eland, Basic KFC, Hut, Pizza Roem, House, Carrefour. La Cinema, Hengdian Suning, Urban Renewal, Chapelle, Starbucks. 2004 2009 2010 2010 2011 YEAR YEAR OPENING OWNER DEVELOPER/ Beijing Hualian Group Shouchuang Properties Longfor Properties Qianfeng Suntop Suning Zhiye 5.2 7.2 7.9 3.7 km 5.0 km FROM FROM PROJECT PROJECT DISTANCE DISTANCE

SIZE GFA) GFA) 30,080 32,000 40,000 82,000 125,160 (RETAIL

COMPETITION COMPETING SHOPPING CENTRES Hualian Beijing Store Shuangqiaozi PlazaWanda 150,000 Jianshe Yokado, Ito road km 4.5 SM Plaza Wanda Group Walk,Paradise 2007 Sanqianji Ito Yokado,Van’s Store, Department 100,500 SquareChicony km 5.1 110,000 SMGroup Midtown 6.8 2006 Lantian Group KFC, Basic Eland, McDonalds, Mall R&F Tianhui 2010 140,316 Arte,Brothers, Brooks Alexandre, Suning Plaza 7.8 R&F Properties Galleria 2010 Harvest Golden H&M,Uniqlo, C&A, 52,000 7.9 GTC Group 2010 Zara, H&M, Starbuck, Sephora, Current Shopping Centre Competition & Wakefield Source: Cushman 58

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7.3 SHOPPING CENTRE COMPETITION – FUTURE The scale of population growth that is set to occur in eastern Chengdu will drive increased development opportunities for shopping centres. There are already a number of centres proposed over the next three years or so, many of which are of a very large scale. These are listed in Table 7.2, and presented in Map 7.2 below.

CHENGDU PROPOSED RETAIL PROJECTS MAP 7.2

It is noted that development details are often not clear in emerging markets such as China. It is likely that some of the proposed developments listed below will not occur, or will occur at a different scale. However, it is also probable that some other retail developments not listed below, will in fact occur.

Notwithstanding this, retail competition is expected to intensify over the next few years. A Glamorous City, which will include a shopping centre developed by CapitaMalls Asia, is due to come on stream in 2014, and is in close proximity to the Longemont site. MixC and the World Trade Centre will also be major retail centres, with MixC in particular being of super-regional scale. These new developments will present the subject centre will a high level of competition, particularly for inner urban residents.

The CBD is set to be strengthened as a retail destination. The Swire Project and Chengdu International Finance Centre are major mixed used developments being developed by sophisticated international developers. These are likely to have a major impact on the CBD retail landscape, and draw custom from throughout the entire city.

The Longemont Centre’s location is somewhat isolated from the majority of these new competitive forces. It will provide a destinational shopping option for residents of the outer eastern suburbs of Chengdu and the East Village growth area population. It will be central to this high growth precinct, and because of its location near to the railway and metro stations, will be accessible from throughout the city.

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For the subject site to be successful in what will be a more competitive retail environment, it will have to be able to differentiate itself from the competition:

The quality of the centre in terms of the standard of construction, fit out and layout will need to be high. Increasingly shopping centres will be developed in Chengdu to an international standard, and the subject centre will certainly need to do this.

The tenant mix will need to be appropriate for the local catchment. We expect the local catchment to change over the next decade as new development brings in higher quality housing, and the quality of public transport options makes the eastern suburbs a more popular place to live. Successful retail developments will be those that do not just provide scale, but provide an offer that is targeted to their local catchment.

The performance of the subject centre will be highly contingent on the population growth that occurs in the trade area. Care will need to be taken to time the development to ensure that sufficient catchment is available to sustain the centre, particularly in its early years of operation..

The design of the centre should, if possible, maximise the level of integration with the railway station, Metro and surrounding developments. A centre of the scale being planned should endeavour to attract visitation from tourists to Chengdu who are arriving/departing using the high speed railway station.

The overall quality of the retailers, the level of service and the quality of the ongoing asset management for the centre will need to be of a first class standard

In addition to the centres that are listed above, the scale of development that is set to occur within the East Village is likely to result in other new shopping centre or retail offers coming into the market. This may be in the form of retail podiums, street front retail, or other shopping centres. Again, care will need to be taken to ensure that the subject centre is able to carve out its own role in the retail hierarchy, and be sufficiently differentiated to ensure it can draw good custom from a broad trade area as well as tourists.

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D-64 61 Mid Mid Mid Mid TABLE 7.2 7.2 TABLE N/A N/A N/A N/A N/A N/A Mid-High High-end TARGET MARKET Mid- High High Mid- COMPETITION N/A N/A Likely to target some luxury tenants and high end A&F N/A N/A N/A Likely to target luxury brands, or luxury brands affordable brands (e.g. ArmaniExchange) Yokado Ito currently present in the area. area. the in present currently 2013 2014 2013 2012 2013 2013 2012 2013 2013 Fuxin Renhe Evergo Swire Group Vanke GroupVanke Avic Real Estate CapitaMalls Asia Asia CapitaMalls Wharf, Henderson Chengdu Jinyiyuan DEVELOPER/ OWNER DEVELOPER/ TIMING MAJORTENANTS Sun Hung Properties, Kai Sun 1.0 3.8 5.7 6.9 7.5 8.0 8.7 9.2 KM 12.1 DISTANCE GFA) GFA) SQ.M SQ.M 60,000 74,000 77,000 70,000 80,000 80,000 145,000 N/A 6.2 Group 100,000 7.3 2014 Huiri Wharf 2013 Hermes, LV, Dior Zegna, N/A High-end 100,000 120,000 107,597 SIZE (RETAIL SIZE (RETAIL SHOPPING CENTRE SHOPPING CENTRE A GlamorousCity MixC World Trade Centre Shimao Mengzhuiwan Swire Project Chengdu International Finance Centre 280,000 City Raffles 360,000 Unionsun International 5.5 Commercial Centre 3.1 Chengdu International Commercial Centre Shimao Dichan MallTianfu CRLand Chinese Estates Plaza N/A MIO Centre N/A SquareShopping9 Centre 2012 WandaPlazaJinniu 102,000 NOVO,Central Store, Department Givenchy Spring Plaza 7.5 Joy City 67,882 200,000 Mid- High Hao Plaza Shi CenturyCentre Global New CapitaMalls Asia 8.4 8.8 240,000 2013 Likely to mass markettenants that such as Gap not are 8.2 Group Wanda 160,000 MOIGroup TravelExhibition & Group CD 2012 13.0 2013 N/A N/A 2012 Vans departmentWanda store, cinema N/A COFCO Group 2013 International mass Mid market retailers (e.g. Zara, H&M). Mid N/A N/A Centre Shopping Future Competition URBIS PERENNIAL.DOCX CHENGDU

D-65 URBIS N/A N/A TARGET MARKET CHENGDU PERENNIAL.DOCX CHENGDU Robinson DepartmentRobinson Store 2013

AUX Group DEVELOPER/ OWNER DEVELOPER/ TIMING MAJORTENANTS 9.6 KM DISTANCE DISTANCE GFA) GFA) SQ.M SQ.M 210,000 SIZE (RETAIL SIZE (RETAIL

COMPETITION SHOPPING CENTRE SHOPPING CENTRE AUX Plaza Paradise Walk 300,000 11.7 Longfor Properties 2014 Mass-market Mid & Wakefield Source: Cushman 62

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8 Concluding Comments

The proposed Longemont development will benefit from is strategic location adjacent to Chengdu East Railway Station. Metro Lines 2 and 7 and the bus interchange will provide the proposed development with high levels of accessibility from Chengdu city centre and surrounding residential areas, as well as to other cities in China via the high speed rail links.

The large scale of the proposed Longemont development together with its locations means it is likely to be able to attract potential shoppers from well beyond its resident trade area, including visitors to Chengdu and residents from other parts of the city and province.

Over the long term, the development will also benefit from its location east of Chengdu city centre, and particularly its location within Chengdu’s East Village Planning area. The area is set to undergo major growth in residential development as well as commercial development and is supported by government plans to develop the area as a cultural and leisure zone. This in turn, will increase the resident population within proximity to the Longemont development. It will be important that the centre’s development coincide with the growth of this area to ensure that the trade area has the critical mass to support the centre.

At present, the existing retail in the catchment area of the proposed development is limited. This presents an opportunity for the Longemont development to serve this market. However, there are a number of new projects that are due to come on stream in the surrounding area over the next few years which will be of relevance in terms of potential competition. Furthermore, the scale of future retail provision across Chengdu city as a whole is very significant, and presents a medium term risk for the centre.

It will therefore be important for the Longemont development to have a point of difference and to be superior compared to other existing and proposed shopping centre developments, including in terms of quality, tenant mix, layout and asset management. It will also be important that the development only occur once the trade area population has reached a scale which can support the centre.

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D-68 APPENDIX E

PROPOSED TRUST DEED SUPPLEMENT IN RELATION TO THE FORM OF PAYMENT OF MANAGEMENT FEES

The proposed form of the amendment to the Trust Deed upon Unitholders’ approval of Resolution 2 (the Trust Deed Supplement in relation to the form of payment of Management Fees) is as follows:

• that clause 13.1.4(i) of the Trust Deed relating to the form and time of payment of management fees be amended in accordance with the following addition indicated by the underlined text below:

“ Subject to the Relevant Laws, Regulations and Guidelines, every payment of the Management Fees (or any part or component thereof) shall be made to the Trustee-Manager in the form of cash and/or Units as the Trustee-Manager may elect (even if the Issue Price of each Unit is below the net asset value per Unit when the Management Fees become payable to the Trustee-Manager), such election to be made by delivery of a notice in writing prior to each payment of the Management Fees, and irrevocable once made.”

E-1 This page has been intentionally left blank. APPENDIX F

PROPOSED TRUST DEED SUPPLEMENT IN RELATION TO ACQUISITION FEES

The proposed form of the amendment to the Trust Deed upon Unitholders’ approval of Resolution 3 (the Trust Deed Supplement in relation to Acquisition Fees) is as follows:

• that Clause 13.2.3(ii)(c) of the Trust Deed be renumbered as Clause 13.2.3(ii)(d) following the insertion of a new Clause 13.2.3(ii)(c) as indicated by the underlined text below:

“ (in relation to an acquisition, or, as the case may be, subscription of the shares of the company which will directly or indirectly own the land and undertake development of the land), of which the Acquisition Fee is payable when (i) PCRT has completed its acquisition or, as the case may be, subscription of the shares of the Special Purpose Vehicle(s) which will directly or indirectly own the land and undertake development of the land and (ii) when the Special Purpose Vehicle(s) directly or indirectly obtains title to the land and the necessary permits in connection with the Special Purpose Vehicle’s title to the land and the construction of the asset have been obtained.”

• that Clause 13.2.3(ii) of the Trust Deed relating to the form and time of payment of acquisition fees be amended to reflect the additions as indicated by the underlined text below:

“ In the event that the Trustee-Manager receives its Acquisition Fee pursuant to paragraph (b) of this Clause 13.2.3(ii)(b) or paragraph (c) of this Clause 13.2.3(ii)(c) and (x) the completion of the acquisition does not take place within 12 months of the time stipulated in the relevant agreement between the Trustee-Manager or its Special Purpose Vehicle(s) and the vendor for the completion of the acquisition (where applicable) or (y) the gross floor area of the relevant Development Trust Asset calculated in accordance with the local regulations applicable to such Development Trust Asset (the “Gross Floor Area”) which is acquired by the Trust is lower than the gross floor area on which the Acquisition Fee was computed and paid (“Estimated Gross Floor Area) by more than 3.0% of the Estimated Gross Floor Area, the Trustee-Manager shall return in full (in the case when sub-paragraph (x) applies) or in part (in the case when sub-paragraph (y) applies), the Units (together with any distributions paid thereon) and/or cash that it received. The Units returned will be cancelled and the cash returned will form part of the Trust Property. In the event that the Trustee-Manager receives its fees in a combination of Units and/or cash, it shall elect whether to return the Units and/or the cash. In the event that the Gross Floor Area of a Development Trust Asset which is acquired by the Trust is higher than the Estimated Gross Floor Area by more than 3.0% of the Estimated Gross Floor Area, the Trustee-Manager shall be paid the difference in the Acquisition Fee in Units and/or cash as the Trustee-Manager may elect.”

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DIRECTORS’ AND SUBTANTIAL UNITHOLDERS’ INTEREST

Based on the Register of Directors’ Unitholdings maintained by the Trustee-Manager and save as disclosed below, none of the Directors currently holds a direct or deemed interest in the Units as at the Latest Practicable Date:

Direct Interest Deemed Interest Total no. of Name of Directors No. of Units % No. of Units % Units held % Mr Boon Swan Foo 000000 Mr Wong Tui San 50,000 0 0 0 50,000 0 Mr Pok Soy Yoong 400,000 0.04 0 0 400,000 0.04 Mr Kuok Khoon Hong 0 0 56,343,000 5.02 56,343,000 5.02 Mr Pua Seck Guan 1,000,000 0.09 41,466,002 3.70 42,466,002 3.79 MsTanSerJoo000000

Based on the Register of Substantial Unitholders’ Unitholdings maintained by the Trustee-Manager the Substantial Unitholders and their interests in the Units as at the Latest Practicable Date are as follows:

Name of Substantial Direct Interest Deemed Interest Total no. of Unitholders No. of Units % No. of Units % Units held % Asdew Acquisitions 120,200,000 10.72 0 0 120,200,000 10.72 Pte Ltd Wang Yu Huei 0 0 120,200,000(1) 10.72 120,200,000 10.72 Cosmo Top Limited 134,600,000 12.00 0 0 134,600,000 12.00 View Far Management 0 0 134,600,000(2) 12.00 134,600,000 12.00 Limited Chen Din Hwa 0 0 134,600,000(3) 12.00 134,600,000 12.00 Prudential PLC 78,169,000 6.97 0 0 78,169,000 6.97 Shanghai Summit 167,142,000 14.90 0 0 167,142,000 14.90 Pte. Ltd. Tong Jinquan 0 0 167,142,000(4) 14.90 167,142,000 14.90 HPRY Holdings Limited 56,343,000 5.02 0 0 56,343,000 5.02 Kuok Khong Hong 0 0 56,343,000(5) 5.02 56,343,000 5.02 @ Kuok Khoon Hong

Notes: (1) 120,200,000 Units held by Asdew Acquisitions Pte Ltd. (2) 134,600,000 Units held by Cosmo Top Limited. (3) 134,600,000 Units held by View Far Management Limited. (4) 167,142,000 Units held by Shanghai Summit Pte. Ltd. (5) 56,343,000 Units held by HPRY Holdings Limited.

Save as disclosed above and in this Circular and based on information available to the Trustee- Managers at the Latest Practicable Date, none of the Directors or the Substantial Unitholders have an interest, direct or indirect in the Acquisition.

G-1 This page has been intentionally left blank. APPENDIX H

CERTAIN DETAILS RELATING TO THE ACQUISITION OF THE CHENGDU LONGEMONT MALL

Investment by Perennial China Retail Trust in Chengdu HSR Commercial Development (assuming gross floor area of whole project is 455,260 sqm which amounts to total Purchase Consideration = RMB 2.28 billion)

STEP 4 – Topping-Out

Payment of Refundable Deposit STEP 2 – Capital Injection by HK SPV Development tops-out, second instalment (40.0%) due. If Shanghai Summit Pte. Ltd. has not provided STEP 6 – Fourth & Final Sign Framework Agreement with the Payment of 5.0% of the Approvals from Unitholders and RMB226.5 million under the New Earn-out Deed by Summit Group. PRC authorities obtained. Purchase Consideration 31 December 2012, PCRT has the right to set-off Shenyang Summit will provide a HK SPV injects RMB10.0 million as RMB226.5 million plus interest from the amount of Purchase Building title received, fourth refundable deposit of RMB227.6 million registered capital and holds 50.0% of Consideration owing to the Summit Group instalment (5.0%) due. (to be funded by ABC Loan) to Summit Chengdu Ruifeng. Onshore construction loan taken. Estimated Total Cash Group Outlay for PCRT now RMB 1.71 billion, second instalment payment adjusted accordingly. PCRT takes additional offshore / onshore debt facility STEP 1 – Establishment of BVI SPV STEP 3 – Acquisition by PCRPL of PREPL sets up SPVs in BVI & HK BVI SPV STEP 5 – Third Payment of 40.0% Seek approval from Unitholders for of the Purchase Consideration

H-1 acquisition via EGM Obtain four permits, first instalment Seek approval from PRC authorities for (15.0%) due. Development commences Transaction Process Process Transaction conversion of Chengdu Ruifeng into sino- operations, third instalment Refundable deposit returned to foreign equity joint venture (“EJV”) (40.0%) due. Shenyang Summit. Summit Group’s 100.0% share of BVI SPV transferred to PCRPL.

4Q 2011 1Q 2012 3Q 2013 3Q 2014 4Q 2014

Signing of Framework Capital Injection Obtaining of Four Structure Topping-Out Commencement Receipt of Agreement Permits of Business Building Title PCRT bears RMB10.0 40.0% due, with adjustments due to Refundable deposit of million for capital 15.0% due, less Step 2 onshore loan (RMB597.5 million). 40.0% due 5.0% due (RMB85.4 RMB227.6 million paid in lieu of injection, to be offset capital injection amount (RMB682.9 million). million). 5.0% instalment. from subsequent (total RMB331.4 million). RMB226.5 million set aside in jointly- instalment payment controlled account as Additional Earn- Entire amount paid Entire amount paid Refundable Deposit of Out. to Summit Group to Summit Group RMB227.6 million returned and Payments to Shenyang Summit RMB184.2 million injected as capital

Shanghai Summit Group If approvals are not obtained into Chengdu Ruifeng. Progress Development (“Summit Group”) is a from unitholders, Step 1 will RMB331.4 million injected reputable property developer be completely unwound and as capital into Chengdu RMB186.8 million paid to Summit and a strategic partner. The the refundable deposit will be Ruifeng Group Shenyang IPO assets were returned to Shenyang purchased from the Summit Summit. Chengdu Ruifeng will obtain an onshore Group. PRC project financing facility of up to a quantum of RMB1.10 billion.

This page has been intentionally left blank. NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an EXTRAORDINARY GENERAL MEETING (the “EGM”) of Perennial China Retail Trust (“PCRT”) will be held on Monday, 13 February 2012 at 10.30 a.m., at Rooms 325-326, Level 3, Suntec Singapore International Convention & Exhibition Centre, 1 Raffles Boulevard, Suntec City, Singapore 039593 for the purpose of considering and, if thought fit, passing, with or without modifications, the following resolutions:

ORDINARY RESOLUTION

RESOLUTION (1) THE PROPOSED ACQUISITION OF A 50.0% INTEREST IN CHENGDU LONGEMONT SHOPPING MALL DEVELOPMENT FROM AN INTERESTED PERSON

That:

(a) approval be and is hereby given for the acquisition of a 50.0% interest in Chengdu Longemont Shopping Mall Development (the “Chengdu Longemont Mall”) (as described in the circular dated 20 January 2012 (“Circular”) issued by Perennial China Retail Trust Management Pte. Ltd., as trustee-manager of PCRT (the “Trustee-Manager”), under the Framework Agreement (as defined in the Circular) entered into pursuant to an option (the “Chengdu Longemont Mall Interest Option”) granted on 21 March 2011 by Shanghai Summit (Group) Co., Ltd and Shanghai Summit to Perennial Real Estate Pte. Ltd. and Perennial China Retail Pte. Ltd. for the acquisition of an interest of 50.0% in the Chengdu Longemont Mall, with the flexibility to increase to up to 80.0%, at an aggregate purchase consideration of approximately RMB2.28 billion (or approximately S$464.0 million), arrived at based on the agreed purchase price of RMB10,000 per square metre on a “completed” basis pursuant to the Chengdu Longemont Mall Interest Option, and for the payment of all fees (including the Acquisition Fee (as defined in the Circular) payable to the Trustee-Manager) and expenses relating to the Acquisition (as described in the Circular);

(b) approval be and is hereby given for the Property Manager (as defined in the Circular) to manage the Chengdu Longemont Mall on the completion of the acquisition of Chengdu Longemont Mall pursuant to and in accordance with the terms of the Property Management Agreement (as defined in the Circular) to be entered into by the Trustee Manager and the Property Manager; and

(c) the Trustee-Manager and any director of the Trustee-Manager (“Director”) be and are hereby severally authorised to complete and do all such acts and things (including executing all such documents as may be required) as the Trustee-Manager or such Director may consider expedient or necessary or in the interests of PCRT to give effect to or implement the above.

EXTRAORDINARY RESOLUTION

RESOLUTION (2) THE PROPOSED TRUST DEED SUPPLEMENT IN RELATION TO THE FORM OF PAYMENT OF MANAGEMENT FEES

That:

(i) approval be and is hereby given to supplement the trust deed dated 22 February 2011 constituting PCRT (as amended) with the Trust Deed Supplement in relation to Management Fees as set out in Appendix E of the Circular; and

I-1 (ii) the Trustee-Manager and any Director be and are hereby severally authorised to complete and do all such acts and things (including executing all such documents as may be required) as the Trustee-Manager or such Director may consider expedient or necessary or in the interests of PCRT to give effect to the Trust Deed Supplement in relation to the form of payment of Management Fees.

EXTRAORDINARY RESOLUTION

RESOLUTION (3) THE PROPOSED TRUST DEED SUPPLEMENT IN RELATION TO ACQUISITION FEES

That:

(i) approval be and is hereby given to supplement the trust deed dated 22 February 2011 constituting PCRT (as amended) with the Trust Deed Supplement in relation to Acquisition Fees (as defined in the Circular) as set out in Appendix F of the Circular; and

(ii) the Trustee-Manager and any Director be and are hereby severally authorised to complete and do all such acts and things (including executing all such documents as may be required) as the Trustee-Manager or such Director may consider expedient or necessary or in the interests of PCRT to give effect to the Trust Deed Supplement in relation to Acquisition Fees.

BY ORDER OF THE BOARD Perennial China Retail Trust Management Pte. Ltd. (Company Registration No. 201024622Z) (as Trustee-Manager of Perennial China Retail Trust)

Mr Pua Seck Guan Executive Director and Chief Executive Officer Singapore 20 January 2012

I-2 This page has been intentionally left blank. IMPORTANT: PLEASE READ THE NOTES TO PROXY FORM BELOW

Notes to Proxy Form

1. A unitholder of Perennial China Retail Trust (“PCRT”, and a unitholder of PCRT, “Unitholder”) entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint one or two proxies to attend and vote in his stead.

2. Where a Unitholder appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of his holding (expressed as a percentage of the whole) to be represented by each proxy.

3. A proxy need not be a Unitholder.

4. A Unitholder should insert the total number of Units held. If the Unitholder has Units entered against his name in the Depository Register maintained by The Central Depository (Pte) Limited (“CDP”), he should insert that number of Units. If the Unitholder has Units registered in his name in the Register of Unitholders of PCRT, he should insert that number of Units. If the Unitholder has Units entered against his name in the said Depository Register and registered in his name in the Register of Unitholders, he should insert the aggregate number of Units. If no number is inserted, this form of proxy will be deemed to relate to all the Units held by the Unitholder.

5. The instrument appointing a proxy or proxies (the “Proxy Form”) must be deposited at the Unit Registrar’s registered office at 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623, not less than 48 hours before the time set for the Extraordinary General Meeting.

6. The Proxy Form must be executed under the hand of the appointor or of his attorney duly authorised in writing. Where the Proxy Form is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised officer.

7. Where the Proxy Form is signed on behalf of the appointor by an attorney, the power of attorney or a duly certified copy thereof must (failing previous registration with Perennial China Retail Trust Management Pte. Ltd., as trustee-manager of PCRT (the “Trustee-Manager”)) be lodged with the Proxy Form, failing which the Proxy Form may be treated as invalid.

8. The Trustee-Manager shall be entitled to reject a Proxy Form which is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified on the Proxy Form. In addition, in the case of Units entered in the Depository Register, the Trustee-Manager may reject a Proxy Form if the Unitholder, being the appointor, is not shown to have Units entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Extraordinary General Meeting, as certified by CDP to the Trustee-Manager.

9. All Unitholders will be bound by the outcome of the Extraordinary General Meeting regardless of whether they have attended or voted at the Extraordinary General Meeting.

10. At any meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded by the Chairman or by five or more Unitholders present in person or by proxy, or holding or representing one-tenth in value of the Units represented at the meeting. Unless a poll is so demanded, a declaration by the Chairman that such a resolution has been carried or carried unanimously or by a particular majority or lost shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.

11. On a show of hands, every Unitholder who (being an individual) is present in person or by proxy or (being a corporation) is present by one of its officers as its proxy shall have one vote. On a poll, every Unitholder who is present in person or by proxy shall have one vote for every Unit of which he is the Unitholder. A person entitled to more than one vote need not use all his votes or cast them the same way. -

PERENNIAL CHINA RETAIL TRUST (a business trust constituted on 22 February 2011 ------under the laws of the Republic of Singapore)

PROXY FORM EXTRAORDINARY GENERAL MEETING I/We (Name) of (Address)

being a unitholder/unitholders of Perennial China Retail Trust (“PCRT”), hereby appoint:

Proportion of NRIC/Passport Unitholdings Name Address Number No. of Units %

and/or (delete as appropriate)

Proportion of NRIC/Passport Unitholdings Name Address Number No. of Units %

or, both of whom failing, the Chairman of the Extraordinary General Meeting as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and if necessary, to demand a poll, at the Extraordinary General Meeting of PCRT to be held on Monday, 13 February 2012 at 10.30 a.m. at Rooms 325-326, Level 3, Suntec Singapore International Convention & Exhibition Centre, 1 Raffles Boulevard, Suntec City, Singapore 039593 and any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the resolution to be proposed at the Extraordinary General Meeting as indicated hereunder. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting at his/their discretion, as he/they will on any other matter arising at the Extraordinary General Meeting.

Resolutions To be used on To be used in the a show of hands event of a poll

For* Against* No. of Votes No. of Votes For** Against**

1 To approve the adoption of the proposed Acquisition of a 50.0% interest in Chengdu Longemont Shopping Mall Development from an Interested Person (Ordinary Resolution)

2 To approve the adoption of the proposed Trust Deed Supplement in relation to the form of payment of Management Fees (Extraordinary Resolution)

3 To approve the adoption of the proposed Trust Deed Supplement in relation to Acquisition Fees (Extraordinary Resolution)

* If you wish to exercise all your votes “For” or “Against”, please tick (ߛ) within the box provided. ** If you wish to exercise all your votes “For” or “Against”, please tick (ߛ) within the box provided. Alternatively, please indicate the number of votes as appropriate.

Dated this day of 2012 Total number of Units held

Signatures of Unitholders/Common Seal ✂ ------st ------1 fold here -

nd ------2 fold here -

Affix Postage Stamp

Boardroom Corporate & Advisory Services Pte. Ltd. (as unit registrar of Perennial China Retail Trust) 50 Raffles Place #32-01 Singapore Land Tower Singapore 048623

------3rd fold here This page has been intentionally left blank. This page has been intentionally left blank. CHINA RETAIL TRUST