Enhancing Stability Crafting Value AIMS AMP CAPITAL INDUSTRIAL REIT I Annual Report 2017 Fundamental to the code of craftsmanship is pure dedication. With time and patience, a craftsman slowly builds up his craft, moulding a masterpiece. Driven by this commitment to excellence, deep-seated values and backed by a highly dedicated team, AA REIT has formed lasting relationships and delivered resilient returns for our Unitholders over the past decade. Contents 1 Corporate Information 22 Board of Directors 104 Overview of the 2 Our Growth Story 26 Senior Management Australia Economy 4 Our Sponsors 28 Investor Engagement 107 Manager’s Report 5 Structure of AIMS AMP 31 Corporate Governance 121 Financial Statements Capital Industrial REIT Statement 184 Statistics of Unitholders 8 Letter to Unitholders 51 Sustainability Report 186 Additional Information 12 Financial Highlights 70 Property Showcase Corporate Directory 14 Trading Performance 86 Overview of the 15 Significant Events Singapore Economy Annual Report 2017 AIMS AMP Capital Industrial REIT / / / 1 The Trust AIMS AMP Capital Industrial REIT (“AA REIT”) is a real estate investment trust listed on the Mainboard of the Singapore Exchange Securities Trading Limited ("SGX-ST") with the investment mandate to invest in high quality income-producing industrial real estate throughout Asia Pacific. The Manager AA REIT is managed by AIMS AMP Capital Industrial REIT Management Limited (the "Manager"), a joint venture REIT management company equally owned by AIMS Financial Group and AMP Capital (collectively known as the “Sponsors”). Vision To be a high-performing Asia Pacific industrial real estate solutions provider to our partners. Mission To provide investors with sustainable long- term returns from an actively managed portfolio of quality industrial real estate located throughout Asia Pacific. 2 \ \ \ Enhancing Stability Annual Report 2017 Crafting Value AIMS AMP Capital Industrial REIT Our Growth Story APRIL AIMS AMP Capital Industrial REIT ("AA REIT") (previously known as MacarthurCook Industrial REIT) was listed and began trading on the SGX- 2007 ST Mainboard OCTOBER Acquired 27 Penjuru Lane, AA REIT’s maiden ramp-up warehouse which 2010 was then AA REIT’s largest asset in the portfolio NOVEMBER Sold 23 Changi South Avenue 2 as part of a capital recycling strategy (above book value) FEBRUARY Acquired 29 Woodlands Industrial Park E1, AA REIT’s first 2011 hi-tech property MARCH Sold AA REIT’s then only overseas asset in Tokyo, Japan, as part of a portfolio repositioning strategy (above book value) JULY Undertook AA REIT’s first redevelopment of 1.2 million square feet ("sq ft") five-storey ramp-up warehouse at 20 Gul Way which was 100.0 per cent pre-committed to CWT Limited Asset was originally valued at S$41.8 million (prior to redevelopment) Project size: S$150.1 million Temporary Occupation Permit ("TOP") of Phase One: 29 October 2012 TOP of Phase Two: 7 May 2013 Annual Report 2017 AIMS AMP Capital Industrial REIT / / / 3 APRIL Assigned an investment grade rating of BBB–by Standard & Poor’s 2012 JULY Established a S$500.0 million multi-currency medium term notes programme for the purpose of diversifying funding sources and lengthening debt maturity AUGUST Announced maiden issuance of S$100.0 million unsecured fixed rate notes which were five times oversubscribed JANUARY Undertook a second redevelopment of a modern 203,000 sq ft six-storey industrial facility at 103 Defu Lane 10 which was 76.0 per cent 2013 pre-committed to Focus Network Agencies (Singapore) Pte Ltd Project size: S$21.7 million TOP: 28 May 2014 JUNE Undertook a further development of 497,000 sq ft at 20 Gul Way as a result of increase in plot ratio. The asset is the largest in AA REIT’s portfolio and 100.0 per cent leased to CWT Limited Project size: S$73.0 million TOP of Phase Two Extension: 14 June 2014 TOP of Phase Three: 9 September 2014 JANUARY Welcomed Koh Wee Lih on board as the Manager’s Chief Executive 2014 Officer and Executive Director FEBRUARY Acquired a 49.0 per cent interest in a business park, Optus Centre, Macquarie Park, New South Wales, marking AA REIT’s maiden acquisition in Australia MAY Undertook an asset enhancement initiative at 26 Tuas Avenue 7 to create additional production line and storage space for existing master tenant The master tenant, Aalst Chocolate Pte Ltd extended the lease for a further five-year term MAY Undertook a third redevelopment of a five-storey ramp-up warehouse (approximately 289,000 sq ft) at 30 Tuas West Road which is fully leased 2015 to CWT Limited Project size: S$40.6 million TOP: 27 December 2016 APRIL Undertook a fourth redevelopment of a three-storey industrial facility Artist's impression 2016 (approximately 159,000 sq ft) at 8 & 10 Tuas Avenue 20 Project size: S$27.0 million (including land cost) Target completion: Second half of 2017 AUGUST Announced AA REIT’s first greenfield build-to-suit industrial facility Artist's impression (approximately 232,000 sq ft) at 51 Marsiling Road which will be fully leased to Beyonics International Pte Ltd for ten years upon completion (after fitting-out period) Project size: S$39.4 million (including land cost) Target completion: Second half of 2017 4 \ \ \ Enhancing Stability Annual Report 2017 Crafting Value Our Sponsors About AIMS Financial Group About AMP Capital Established in 1991, AIMS Financial Group (“AIMS”) is AMP Capital is one of the largest investment managers a diversified financial services and investment group, in the Asia Pacific region. As part of the AMP Group, we active in the areas of mortgage lending, securitisation, share a heritage that spans over 160 years. investment banking, funds management, property investment, private equity, venture capital, stock broking A home strength in Australia and New Zealand has and high-tech investment. AIMS is also a strategic investor enabled AMP Capital to grow internationally, and today in the Sydney Stock Exchange. has operations established in Dubai, China, Hong Kong, India, Ireland, Japan, Luxembourg, the United Kingdom Since 1999, AIMS has raised more than A$4.0 billion and the United States. AMP Capital also collaborates in funds from the capital market. AIMS has issued with a network of global investment partners, leveraging approximately A$3.0 billion of residential mortgage- the shared capabilities to provide greater access to new backed securities, predominantly rated AAA by both investment opportunities. Standard & Poor’s and Fitch Ratings and has originated over A$8.0 billion mortgages since 1991. AMP Capital's asset class specialists, investment strategists and economists work together with the aim of delivering AIMS has actively introduced a number of international strong investment outcomes for clients. That is why AMP investors into the Australian market and to date has Capital's clients trust AMP Capital to invest over A$165.4 attracted in excess of A$1.0 billion of investment funding billion (as at 31 December 2016) on their behalf, across a into Australia from overseas investors. AIMS is the range of single sector and diversified funds. investment manager for AIMS’ funds, which amount to circa A$2.0 billion as at 30 November 2016. www.ampcapital.com.au During the global financial crisis (“GFC”), AIMS expanded its activities and acquired three businesses at a time when many other businesses were experiencing immense difficulties. Since the GFC in 2009, AIMS has completed total asset acquisition and investment volumes of over A$2.0 billion. AIMS’ head office is in Sydney and it has businesses across Australia, China, Hong Kong and Singapore. Its highly qualified, professional and experienced cross-cultural teams enable AIMS to bridge the gap between Australia and Asia across various sectors. www.aims.com.au Annual Report 2017 AIMS AMP Capital Industrial REIT / / / 5 Structure of AIMS AMP Capital Industrial REIT The Manager The Trustee AIMS AMP Capital Unitholders HSBC Institutional Trust Industrial REIT Services (Singapore) Management Limited Limited Shareholders AIMS Financial Holding 1 Limited (50.0%) Holding Distributions of Units AMP Capital Investors International Holdings Limited (50.0%)1 The Trust Management Trustee’s and other fees AIMS AMP fees Management and Acts on behalf of other services Capital Unitholders Industrial REIT Ownership Distributions of assets Net property Ownership income of Units Singapore Holding Properties Trusts Investment services Property management Property management Ownership Management and other fees and other services of assets and other fees Net property income The Property Manager The Investment Manager AIMS AMP Capital Property Australia AIMS AMP Capital Industrial REIT Management Pte. Ltd. Property Management Australia Pty Limited Shareholders Shareholders AIMS Financial Holding Limited AIMS Capital Management Pty Ltd (50.0%)1 (50.0%)2 AMP Capital Investors International AMP Capital Investors Limited Holdings Limited (50.0%)1 (50.0%)2 1 AIMS Financial Holding Limited and AMP Capital Investors International Holdings Limited are indirectly owned by the two strategic sponsors, AIMS Financial Group and AMP Capital respectively. 2 AIMS Capital Management Pty Ltd and AMP Capital Investors Limited are indirectly owned by the two strategic sponsors, AIMS Financial Group and AMP Capital respectively. BUILDING The construction of a bowed string instrument such as the violin begins with obtaining resilient and quality wood. Then, every part of the instrument is carved, assembled and refined by the master luthier