OUE H-Trust Prospectus

www.oueht.
com
Prospectus Dated 18 July 2013
(Registered with the Monetary Authority of Singapore on 18 July 2013)
This document is important. If you are in any doubt as to the action
you should take, you should consult your legal, nancial, tax or other
professional adviser.
OUE Hospitality REIT Management Pte. Ltd., as manager (the REIT Manager) of OUE
Hospitality Real Estate Investment Trust (OUE H-REIT) and OUE Hospitality Trust
Management Pte. Ltd., as trustee-manager (the Trustee-Manager, and together with
the REIT Manager, the Managers) of OUE Hospitality Business Trust (OUE H-BT) are
making an offering (the Offering) of 434,598,000 stapled securities in OUE Hospitality
Trust (OUE H-Trust, and the stapled securities in OUE H-Trust, the Stapled Securities),
which is a hospitality stapled group comprising OUE H-REIT and OUE H-BT. Each Stapled
Security comprises one unit in OUE H-REIT (OUE H-REIT Unit) and one unit in OUE H-BT
(OUE H-BT Unit). The Offering consists of (i) an international placement of 383,462,000
Stapled Securities to investors, including institutional and other investors in Singapore
and elsewhere outside the United States in reliance on Regulation S (as dened herein)
(the Placement Tranche), and (ii) an offering of 51,136,000 Stapled Securities to the
public in Singapore (the Public Offer). The issue price of each Stapled Security under
the Offering (the Offering Price) is S$0.88 per Stapled Security.
The joint global coordinators and issue managers for the Offering are Credit Suisse
(Singapore) Limited, Goldman Sachs (Singapore) Pte. and Standard Chartered Securities
(Singapore) Pte. Limited (the Joint Global Coordinators and Issue Managers or the
Joint Global Coordinators). The Offering is fully underwritten by Credit Suisse (Singapore)
Limited, Goldman Sachs (Singapore) Pte., Standard Chartered Securities (Singapore) Pte.
Limited, Merrill Lynch (Singapore) Pte. Ltd., Deutsche Bank AG, Singapore Branch and
Oversea-Chinese Banking Corporation Limited (collectively, the Joint Bookrunners and
Underwriters or the Joint Bookrunners) on the terms and subject to the conditions
of the Underwriting Agreement (as dened herein).
The total number of Stapled Securities in issue as at the date of this Prospectus is
one Stapled Security (the Sponsor Initial Stapled Security). The total number of
outstanding Stapled Securities immediately after the completion of the Offering will
be 1,308,600,000 Stapled Securities.
Separate from the Offering, Overseas Union Enterprise Limited (OUE or the Sponsor),
as vendor (the Vendor) of the Initial Portfolio (as dened herein), will receive an
aggregate of 626,781,999 Stapled Securities (the Consideration Stapled Securities,
and together with the Sponsor Initial Stapled Security, the Sponsor Stapled Securities)
on the Listing Date (as dened herein) in part satisfaction of the purchase consideration
for the Initial Portfolio (as dened herein).
In addition, concurrently with, but separate from the Offering, each of the Cornerstone
Investors (as dened herein) has entered into a subscription agreement to subscribe for
an aggregate of 247,220,000 Stapled Securities (the Cornerstone Stapled Securities)
at the Offering Price conditional upon the Underwriting Agreement having been entered
into, and not having been terminated, pursuant to its terms on or prior to the Settlement
Date (as dened herein).
Prior to the Offering, there has been no market for the Stapled Securities. The offer of
Stapled Securities under this Prospectus will be by way of an initial public offering in
Singapore. An application has been made to Singapore Exchange Securities Trading
Limited (SGX-ST) for permission to list on the Main Board of the SGX-ST (i) all the
Stapled Securities comprised in the Offering, (ii) all the Sponsor Stapled Securities, (iii)
all the Cornerstone Stapled Securities and (iv) all the Stapled Securities which may be
issued to the REIT Manager or the Trustee-Manager from time to time in full or in part
payment of fees payable to the REIT Manager or the Trustee-Manager. Such permission
will be granted when OUE H-Trust has been admitted to the Ofcial List of the SGX-
ST (the Listing Date). Acceptance of applications for the Stapled Securities will be
conditional upon issue of the Stapled Securities and upon permission being granted
to list the Stapled Securities. In the event that such permission is not granted or if the
Offering is not completed for any other reason, application monies will be returned in
full, at each investors own risk, without interest or any share of revenue or other benet
arising therefrom, and without any right or claim against any of OUE H-Trust, OUE H-REIT,
OUE H-BT, the REIT Manager, RBC Investor Services Trust Singapore Limited, as trustee
of OUE H-REIT (the REIT Trustee), the Trustee-Manager, the Sponsor, the Joint Global
Coordinators or the Joint Bookrunners.
OUE H-Trust has received a letter of eligibility from the SGX-ST for the listing and quotation
of (i) all Stapled Securities comprised in the Offering, (ii) the Sponsor Stapled Securities,
(iii) the Cornerstone Stapled Securities and (iv) the Stapled Securities to be issued to the
REIT Manager or the Trustee-Manager from time to time in full or part payment of fees
payable to the REIT Manager or the Trustee-Manager. OUE H-Trusts eligibility to list on
the Main Board of the SGX-ST does not indicate the merits of the Offering, OUE H-Trust,
7.36%
OUE HOSPITALITY REAL
ESTATE INVESTMENT TRUST
(a real estate investment trust constituted on 10 July 2013
under the laws of the Republic of Singapore) managed by
OUE Hospitality REIT Management Pte. Ltd.
OFFERING OF 434,598,000 STAPLED SECURITIES
(subject to the Over-Allotment Option (as dened herein))
OUE HOSPITALITY
BUSINESS TRUST
(a business trust constituted on 10 July 2013 under the
laws of the Republic of Singapore) managed by OUE
Hospitality Trust Management Pte. Ltd.
OFFERING PRICE:
S$0.88 PER STAPLED SECURITY
Comprising:
ANNUALISED 2013
DISTRIBUTION YIELD
(ASSUMING LISTING DATE OF 1 JULY 2013)
1
JOI NT GLOBAL COORDI NATORS AND I SSUE MANAGERS
JOI NT BOOKRUNNERS AND UNDERWRI TERS
SPONSOR
1 The nancials for 2013 is based on the underlying assumptions set out in this Prospectus. Such yield will vary accordingly for investors who purchase the Stapled Securities in the secondary market at a
market price different from the Offering Price
O
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H
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ABOUT OUE HOSPITALITY TRUST
A PREMIER PORTFOLIO OF HIGH QUALITY ASSETS
LOCATED IN THE HEART OF ORCHARD ROAD,
SINGAPORE'S PREMIER SHOPPING DISTRICT
OUE Hospitality Trust is a stapled group comprising OUE H-REIT and OUE H-BT.
OUE H-BT will be dormant as at the Listing Date.
OUE H-REIT is established with the principal investment strategy of investing,
directly or indirectly, in a portfolio of income-producing real estate which is used
primarily for hospitality and/or hospitality-related purposes, whether wholly or
partially, as well as real estate-related assets.
OUE H-REITs initial asset portfolio is strategically located in
the heart of Singapores renowned shopping district of Orchard Road,
and comprises Mandarin Orchard Singapore and Mandarin Gallery.
OUE H-REIT, OUE H-BT, the REIT Manager, the REIT Trustee, the Trustee-Manager, the
Sponsor, the Joint Global Coordinators, the Joint Bookrunners or the Stapled Securities.
The SGX-ST assumes no responsibility for the correctness of any of the statements or
opinions made or reports contained in this Prospectus. Admission to the Ofcial List of
the SGX-ST is not to be taken as an indication of the merits of the Offering, OUE H-Trust,
OUE H-REIT is an authorised scheme under the Securities and Futures Act, Chapter 289
of Singapore (the SFA). OUE H-BT is a registered business trust (Registration Number:
2013006) under the Business Trusts Act, Chapter 31A of Singapore (the BTA). A copy
of this Prospectus has been lodged with and registered by the Monetary Authority of
Singapore (the Authority or MAS) on 11 July 2013 and 18 July 2013 respectively.
The MAS assumes no responsibility for the contents of this Prospectus. Lodgement with,
or registration by, the MAS of this Prospectus does not imply that the SFA, the BTA or
any other legal or regulatory requirement has been complied with. The MAS has not,
in any way, considered the investment merits of the OUE H-REIT Units, the OUE H-BT
Units and the Stapled Securities, being offered for investment. This Prospectus will
expire on 17 July 2014 (12 months after the date of the registration of this Prospectus).
No Stapled Security shall be allotted or allocated on the basis of this Prospectus later
than six months after the date of registration of this Prospectus by the MAS.
See Risk Factors for a discussion of certain factors to be considered in connection
with an investment in the Stapled Securities. None of OUE H-Trust, OUE H-REIT,
OUE H-BT, the REIT Manager, the REIT Trustee, the Trustee-Manager, the Sponsor,
the Joint Global Coordinators or the Joint Bookrunners guarantees the performance
of OUE H-Trust, the repayment of capital or the payment of a particular return on the
Stapled Securities.
Investors applying for the Stapled Securities by way of Application Forms (as dened herein)
or Electronic Applications (both as referred to in Appendix G, Terms, Conditions and
Procedures for Application for and Acceptance of the Stapled Securities in Singapore) will
pay the Offering Price per Stapled Security on application, subject to a refund of the full
amount or, as the case may be, the balance of the application monies (in each case without
interest or any share of revenue or other benet arising therefrom), where (i) an application
is rejected or accepted in part only, or (ii) the Offering does not proceed for any reason.
In connection with the Offering, the Joint Bookrunners have been granted an over-allotment
option (the Over-Allotment Option) by the Sponsor (the Stapled Security Lender),
a company incorporated in Singapore, exercisable by Goldman Sachs (Singapore) Pte.
(the Stabilising Manager) (or any of its afliates or other persons acting on behalf
of the Stabilising Manager), in consultation with the other Joint Bookrunners, in full
or in part, on one or more occasions, only from the Listing Date but no later than the
earlier of (i) the date falling 30 days from the Listing Date; or (ii) the date when the
Stabilising Manager (or any of its afliates or other persons acting on behalf of the
Stabilising Manager) has bought, on the SGX-ST, an aggregate of 68,182,000 Stapled
Securities, representing not more than 15.7% of the total number of Stapled Securities
in the Offering, to undertake stabilising actions to purchase up to an aggregate of
68,182,000 Stapled Securities (representing not more than 15.7% of the total number
of Stapled Securities in the Offering), at the Offering Price. The exercise of the Over-
Allotment Option will not increase the total number of Stapled Securities outstanding.
In connection with the Offering, the Stabilising Manager (or any of its afliates or other
persons acting on behalf of the Stabilising Manager) may, in consultation with the other
Joint Bookrunners and at its discretion, over-allot or effect transactions which stabilise
or maintain the market price of the Stapled Securities at levels that might not otherwise
prevail in the open market. However, there is no assurance that the Stabilising Manager
(or any of its afliates or other persons acting on behalf of the Stabilising Manager) will
undertake stabilising action. Such transactions may be effected on the SGX-ST and in
other jurisdictions where it is permissible to do so, in each case in compliance with all
applicable laws and regulations.
Nothing in this Prospectus constitutes an offer for securities for sale in the United States
or any other jurisdiction where it is unlawful to do so. The Stapled Securities have not
been and will not be registered under the U.S. Securities Act of 1933, as amended (the
Securities Act) and, subject to certain exceptions, may not be offered or sold within
the United States (as dened in Regulation S under the Securities Act (Regulation S)).
The Stapled Securities are being offered and sold outside the United States in reliance
on Regulation S.
www.oueht.com
7.36%
OUE HOSPITALITY
BUSINESS TRUST
OFFERING PRICE:
Comprising:
ANNUALISED 2013
DISTRIBUTION YIELD
1
SPONSOR
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Stapled Securities.
on Regulation S.
HISTORICAL AND FORECAST GOR
AND GOP MARGIN FOR THE HOTEL
HISTORICAL AND FORECAST REVPAR AND
OCCUPANCY RATE TRENDS FOR THE HOTEL
RevPAR (S$) Occupancy Rate
215.1
84.6%
237.9
85.8%
243.3
86.5%
251.2
89.7%
256.6
87.7%
2010 2011 2012 FY2013E
1
FY2014E
133.1
54.8%
151.1
57.5%
154.4
56.8%
155.5
56.1%
2
2010 2011 2012 FY2013E
1
FY2014E
162.1
56.2%
GOR (S$m) GOP Margin
STRONG OPERATIONAL PERFORMANCE
1 "FY2013E" refers to the estimated results for FY2013. FY2013E gures are computed based on (i) unaudited pro forma nancials from 1 January 2013 to 31 March 2013 and (ii) forecast gures
for the 9-month period from 1 April 2013 to 31 December 2013 ("Forecast Period 2013" or "FP2013E")
2 FY2013E GOP margin is based on FY2013E GOP of S$87.2m divided by FY2013E GOR of S$155.5m
3 Transient refers to revenue derived from rental of rooms and suites to individuals or groups occupying less than 10 rooms per night and who do not have contracted annual rates with the Hotel
Corporate refers to revenue derived from the rental of rooms and suites booked via a corporate or government entity that has contracted annual rates with the Hotel
Wholesale refers to revenue derived primarily from the rental of rooms and suites booked via a third party travel agent on a wholesale contracted rate basis
LARGEST HOTEL ON ORCHARD ROAD
4
Regency Suite, Orchard Wing
Mandarin Orchard Singapore Hotel Lobby
An icon of world class hospitality in Singapore since 1971, Mandarin Orchard Singapore (the Hotel)
features 1,051 rooms, ve food and beverage outlets, and approximately 25,511 sq ft of meeting and
function space with a capacity of up to 1,840 people. The Hotel is one of the top accommodation
choices in Singapore for leisure and business travellers globally.
FY2012 CUSTOMER PROFILE FOR THE HOTEL
(BY ROOM REVENUE)
3
Wholesale
45%
29%
26%
Corporate
Transient
4 Source: Independent Market Research Report
ATTRACTIVE FORECAST AND PROJECTED DISTRIBUTION YIELD
KEY INVESTMENT HIGHLIGHTS
1 Annualised distribution yield assuming a Listing Date of 1 July 2013. For the avoidance of doubt, Stapled Securityholders who have subscribed for Stapled Securities pursuant to the
Offering will not be entitled to any distributions made for the period from 1 January 2013 and ending on the day immediately preceding the Listing Date
1. OPPORTUNITY TO INVEST IN A PORTFOLIO OF PREMIER
ASSETS WHICH ARE STRATEGICALLY LOCATED IN
THE HEART OF SINGAPORE'S RENOWNED SHOPPING
DISTRICT OF ORCHARD ROAD
Premier portfolio of high quality landmark assets
Central location in Singapores prime shopping and tourism
district with excellent connectivity and accessibility
Complementary mix of hospitality and retail assets with large
and reputable customer and tenant bases
Sound asset fundamentals driving strong operational performance
FY2013E
7.36%
1
FY2014E
7.46%
2 Based on the independent valuations of Mandarin Orchard Singapore and Mandarin Gallery
3 Net Property Income or NPI means the gross revenue of the Initial Portfolio (comprising the gross rental payments under the Master Lease Agreement, which comprises a Fixed Rent and
a Variable Rent, and the Retail Income (each as dened herein) from Mandarin Gallery) (Gross Revenue) less (i) property taxes; (ii) property management fee; and (iii) other property operating
expenses (collectively, Property Expenses)
4 Master Lease Agreement means the lease agreement entered into between the Master Lessee and the REIT Trustee as trustee of OUE H-REIT and any subsequent future master lessees
(including, without limitation, OUE H-BT) for Mandarin Orchard Singapore
5 "FY2013E" refers to the estimated results for FY2013. FY2013E gures are computed based on (i) unaudited pro forma nancials from 1 January 2013 to 31 March 2013 and (ii) forecast gures for
the 9-month period from 1 April 2013 to 31 December 2013 ("Forecast Period 2013" or "FP2013E")
6 Assumes Mandarin Orchard Singapores property expenses of S$3.8 million in FY2014E are allocated across Fixed Rent and Variable Rent in proportion to their respective contributions to Gross Revenue
Mandarin Orchard Singapore S$1,220m
Mandarin Gallery S$536m
CONTRIBUTION BY ASSET VALUE AS
AT 31 MARCH 2013
2
31%
69%
1%
69
Total:
S$1,756
million
Mandarin Orchard Singapore S$75m
ESTIMATED CONTRIBUTION BY NET
PROPERTY INCOME
3
FOR FY2014E
27%
73%
27%
73
Total:
S$102
million
3. STABLE DISTRIBUTIONS WITH DOWNSIDE PROTECTION VIA
LONG TERM MASTER LEASE AGREEMENT
Stability from the Master Lease Agreement
4
Complementary exposure to resilient retail income
Mandarin Orchard Singapore
Fixed Rent
6
Variable Rent
6
Mandarin Gallery NPI
NPI BREAKDOWN FOR FY2014E
6
9
%
N
PI Contribution fro
m
S
ta
b
le
R
e
n
t
s
2. BENEFICIARY OF SINGAPORES ECONOMIC, TOURISM,
HOSPITALITY AND ROBUST RETAIL SECTOR GROWTH
Favourable dynamics for hospitality market given strong growth
momentum in tourist arrivals
Resilient retail sector due to stable domestic demand with further
upside from increased tourist retail spending
Revitalisation of Orchard Road which will increase shopper trafc, retail
sales for malls and RevPAR for hotels located on Orchard Road
STRATEGICALLY LOCATED IN THE HEART OF ORCHARD ROAD
~ 4.5% Stable Distribution Yield
from Hotel Fixed Rents
and Retail Rents
ATTRACTIVE MASTER LEASE STRUCTURE:
STABLE DISTRIBUTIONS WITH DOWNSIDE PROTECTION
64.0
70.3%
29.7%
61.0%
39.0%
73.8
60.0%
40.0%
75.1
59.8%
40.2%
75.3
2010 2011 2012 FY2013E
5
FY2014E
57.3%
42.7%
78.6
Variable Rent
Fixed Rent
(S$ MILLION)
S$102
million
27%
42%
31%
HISTORICAL AND FORECAST GOR
AND GOP MARGIN FOR THE HOTEL
HISTORICAL AND FORECAST REVPAR AND
OCCUPANCY RATE TRENDS FOR THE HOTEL
215.1
84.6%
237.9
85.8%
243.3
86.5%
251.2
89.7%
256.6
87.7%
2010 2011 2012 FY2013E
1
FY2014E
133.1
54.8%
151.1
57.5%
154.4
56.8%
155.5
56.1%
2
2010 2011 2012 FY2013E
1
FY2014E
162.1
56.2%
GOR (S$m) GOP Margin
STRONG OPERATIONAL PERFORMANCE
2 FY2013E GOP margin is based on FY2013E GOP of S$87.2m divided by FY2013E GOR of S$155.5m
3 Transient refers to revenue derived from rental of rooms and suites to individuals or groups occupying less than 10 rooms per night and who do not have contracted annual rates with the Hotel
Corporate refers to revenue derived from the rental of rooms and suites booked via a corporate or government entity that has contracted annual rates with the Hotel
Wholesale refers to revenue derived primarily from the rental of rooms and suites booked via a third party travel agent on a wholesale contracted rate basis
LARGEST HOTEL ON ORCHARD ROAD
4
Regency Suite, Orchard Wing
Mandarin Orchard Singapore Hotel Lobby
An icon of world class hospitality in Singapore since 1971, Mandarin Orchard Singapore (the Hotel)
features 1,051 rooms, ve food and beverage outlets, and approximately 25,511 sq ft of meeting and
function space with a capacity of up to 1,840 people. The Hotel is one of the top accommodation
choices in Singapore for leisure and business travellers globally.
FY2012 CUSTOMER PROFILE FOR THE HOTEL
(BY ROOM REVENUE)
3
Wholesale
45%
29%
26%
Corporate
Transient
4 Source: Independent Market Research Report
ATTRACTIVE FORECAST AND PROJECTED DISTRIBUTION YIELD
KEY INVESTMENT HIGHLIGHTS
1 Annualised distribution yield assuming a Listing Date of 1 July 2013. For the avoidance of doubt, Stapled Securityholders who have subscribed for Stapled Securities pursuant to the
Offering will not be entitled to any distributions made for the period from 1 January 2013 and ending on the day immediately preceding the Listing Date
1. OPPORTUNITY TO INVEST IN A PORTFOLIO OF PREMIER
ASSETS WHICH ARE STRATEGICALLY LOCATED IN
THE HEART OF SINGAPORE'S RENOWNED SHOPPING
DISTRICT OF ORCHARD ROAD
Premier portfolio of high quality landmark assets
Central location in Singapores prime shopping and tourism
district with excellent connectivity and accessibility
Complementary mix of hospitality and retail assets with large
and reputable customer and tenant bases
Sound asset fundamentals driving strong operational performance
FY2013E
7.36%
1
FY2014E
7.46%
2 Based on the independent valuations of Mandarin Orchard Singapore and Mandarin Gallery
3 Net Property Income or NPI means the gross revenue of the Initial Portfolio (comprising the gross rental payments under the Master Lease Agreement, which comprises a Fixed Rent and
a Variable Rent, and the Retail Income (each as dened herein) from Mandarin Gallery) (Gross Revenue) less (i) property taxes; (ii) property management fee; and (iii) other property operating
expenses (collectively, Property Expenses)
4 Master Lease Agreement means the lease agreement entered into between the Master Lessee and the REIT Trustee as trustee of OUE H-REIT and any subsequent future master lessees
(including, without limitation, OUE H-BT) for Mandarin Orchard Singapore
5 "FY2013E" refers to the estimated results for FY2013. FY2013E gures are computed based on (i) unaudited pro forma nancials from 1 January 2013 to 31 March 2013 and (ii) forecast gures for
the 9-month period from 1 April 2013 to 31 December 2013 ("Forecast Period 2013" or "FP2013E")
6 Assumes Mandarin Orchard Singapores property expenses of S$3.8 million in FY2014E are allocated across Fixed Rent and Variable Rent in proportion to their respective contributions to Gross Revenue
Mandarin Orchard Singapore S$1,220m
CONTRIBUTION BY ASSET VALUE AS
AT 31 MARCH 2013
2
31%
69%
1%
69
Total:
S$1,756
million
Mandarin Orchard Singapore S$75m
ESTIMATED CONTRIBUTION BY NET
PROPERTY INCOME
3
FOR FY2014E
27%
73%
27%
73
Total:
S$102
million
3. STABLE DISTRIBUTIONS WITH DOWNSIDE PROTECTION VIA
LONG TERM MASTER LEASE AGREEMENT
Stability from the Master Lease Agreement
4
Complementary exposure to resilient retail income
Fixed Rent
6
Variable Rent
6
Mandarin Gallery NPI
NPI BREAKDOWN FOR FY2014E
6
9
%
N
PI Contribution fro
m
S
ta
b
le
R
e
n
t
s
2. BENEFICIARY OF SINGAPORES ECONOMIC, TOURISM,
HOSPITALITY AND ROBUST RETAIL SECTOR GROWTH
Favourable dynamics for hospitality market given strong growth
momentum in tourist arrivals
Resilient retail sector due to stable domestic demand with further
upside from increased tourist retail spending
Revitalisation of Orchard Road which will increase shopper trafc, retail
sales for malls and RevPAR for hotels located on Orchard Road
STRATEGICALLY LOCATED IN THE HEART OF ORCHARD ROAD
~ 4.5% Stable Distribution Yield
from Hotel Fixed Rents
and Retail Rents
ATTRACTIVE MASTER LEASE STRUCTURE:
STABLE DISTRIBUTIONS WITH DOWNSIDE PROTECTION
64.0
70.3%
29.7%
61.0%
39.0%
73.8
60.0%
40.0%
75.1
59.8%
40.2%
75.3
2010 2011 2012 FY2013E
5
FY2014E
57.3%
42.7%
78.6
Variable Rent
Fixed Rent
(S$ MILLION)
S$102
million
27%
42%
31%
4. WELL POSITIONED TO CAPITALISE ON GROWTH OPPORTUNITIES
Crowne Plaza Changi Airport / 100%
Meritus Shantou China / 80%
5. STRONG, REPUTABLE AND COMMITTED SPONSOR
Track record as a leading real estate owner, developer and
operator
Diversied real estate portfolio located in Singapore and
PRC, across hospitality, retail, commercial and residential
property segments
Successful examples of the enhancement of existing assets
to create additional value for its shareholders S$200 million
conversion of Mandarin Gallery
Alignment of the Sponsors and the Managers interests with
those of Stapled Securityholders
6. EXPERIENCED BOARD AND MANAGEMENT TEAM WITH
PROVEN TRACK RECORD
Experienced and well-supported REIT management team
Highly independent Board of Directors with 4 Independent Directors
out of a total of 6 Directors
Strong Acquisition Pipeline
1 Including the proposed additional 200 hotel rooms expected
to be developed on the plot of land adjacent to Crowne Plaza
Changi Airport. The proposed additional 200 hotel rooms are
expected to be completed by the end of 2015
2 Valuation of RMB298 million converted to SGD at an exchange
rate of 5.007 RMB/SGD as at 31 March 2013
4 Including the addition of 26 new hotel rooms in FY2013
POTENTIAL DOUBLING OF NUMBER
OF HOTEL ROOMS
1,077
4
1,051
Sponsor
ROFR
Properties
956
2,033
1,156
1
88.8% 107.3%
Growth
2,233
1
Enlarged
Portfolio
Current
Portfolio
Potential Growth of
OUE H-Trust's Portfolio
Meritus Mandarin Haikou / 100%
Name of Sponsor ROFR Property /
Ownership (%) Location
Number of Hotel
Rooms
Valuation as at
31 December
2012
(S$ million)

Singapore 320 + 200
1
291.0
Haikou,
Peoples
Republic of
China
(the PRC)
318 59.5
2
Shantou,
the PRC
318 62.5
3
Total Number of Hotel Rooms / Valuation
956 + 200
1
413.0
STABLE RETAIL RENTAL INCOME
HISTORICAL AND FORECAST RENTAL AND
COMMITTED OCCUPANCY RATE
1
FOR THE MALL
Effective Gross Rental /sq ft/ mth (S$)
Committed Occupancy Rate
1
2010
20.9
100%
2011
21.3
100%
2012
21.5
100%
FY2013E
3
23.3
100%
FY2014E
23.9
100%
HISTORICAL AND FORECAST NPI AND NPI
MARGIN FOR THE MALL
TENANT MIX FOR THE MALL
(BY RETAIL RENTAL INCOME
2
)
2010
19.0
59.5%
2011
23.3
69.0%
2012
23.4
71.6%
FY2013E
3
26.6
74.2%
4
FY2014E
27.1
73.6%
NPI (S$m) NPI Margin
1 Committed Occupancy Rate is dened as the occupancy rate based on all committed leases in respect of Mandarin Gallery for the period, including legally binding letters of offer which
have been accepted for vacant units, as a function of total lettable space (which excludes units which are undergoing conversion, amalgamation and/or sub-division)
2 For the 3 months ended 31 March 2013
4 FY2013E NPI margin is based on FY2013E NPI of S$26.6m divided by FY2013E Retail Income of S$35.8m
PRIME RETAIL LANDMARK ON ORCHARD ROAD
Ippudo at Mandarin Gallery Emporio Armani at Mandarin Gallery
Mandarin Gallery Facade
Mandarin Gallery enjoys a high degree of prominence, boasting a wide frontage of 152 metres along
Orchard Road. Featuring six duplexes and six street front shop units facing Orchard Road, the Mall is
a choice location for agship stores of international brands. The Mall comprises four levels of high-
end boutiques, shops and restaurants, and is complemented by Mandarin Orchard Singapore to
collectively provide an integrated hospitality and retail experience for shoppers and hotel guests.
2% Travel
Hair &
Beauty
F&B
Living &
Lifestyle
Watches &
Jewellery
Accessories
Fashion
Apparel
2% Services
46%
14%
13%
9%
7%
7%
Upside potential for growing
current RevPAR of the Hotel
which benets OUE H-Trust
through Master Lease
Agreement
Embedded growth in retail rents
from step-up rent structures with
turnover rent component for
Mandarin Gallery (the "Mall")
Completed / ongoing
refurbishments to upgrade the
Hotel funded by the Sponsor
will help to command higher
room rates
Ongoing optimisation of tenant
mix at the Mall in preparation
for next renewal cycle
ACTIVE ASSET MANAGEMENT
AND ENHANCEMENT
EMBEDDED ORGANIC
GROWTH
Potential doubling in hotel
portfolio size (by number of
rooms) from Sponsor ROFR
properties
Leverage Sponsors networks
in the real estate industry
to source for potentially
accretive deals
STRONG ACQUISITION
PIPELINE
4. WELL POSITIONED TO CAPITALISE ON GROWTH OPPORTUNITIES
Crowne Plaza Changi Airport / 100%
Meritus Shantou China / 80%
5. STRONG, REPUTABLE AND COMMITTED SPONSOR
Track record as a leading real estate owner, developer and
operator
Diversied real estate portfolio located in Singapore and
PRC, across hospitality, retail, commercial and residential
property segments
Successful examples of the enhancement of existing assets
to create additional value for its shareholders S$200 million
conversion of Mandarin Gallery
Alignment of the Sponsors and the Managers interests with
those of Stapled Securityholders
6. EXPERIENCED BOARD AND MANAGEMENT TEAM WITH
PROVEN TRACK RECORD
Experienced and well-supported REIT management team
Highly independent Board of Directors with 4 Independent Directors
out of a total of 6 Directors
Strong Acquisition Pipeline
1 Including the proposed additional 200 hotel rooms expected
to be developed on the plot of land adjacent to Crowne Plaza
Changi Airport. The proposed additional 200 hotel rooms are
expected to be completed by the end of 2015
4 Including the addition of 26 new hotel rooms in FY2013
POTENTIAL DOUBLING OF NUMBER
OF HOTEL ROOMS
1,077
4
1,051
Sponsor
ROFR
Properties
956
2,033
1,156
1
88.8% 107.3%
Growth
2,233
1
Enlarged
Portfolio
Current
Portfolio
Potential Growth of
OUE H-Trust's Portfolio
Meritus Mandarin Haikou / 100%
Name of Sponsor ROFR Property /
Ownership (%) Location
Number of Hotel
Rooms
Valuation as at
31 December
2012
(S$ million)

Singapore 320 + 200
1
291.0
Haikou,
Peoples
Republic of
China
(the PRC)
318 59.5
2
Shantou,
the PRC
318 62.5
3
Total Number of Hotel Rooms / Valuation
956 + 200
1
413.0
STABLE RETAIL RENTAL INCOME
HISTORICAL AND FORECAST RENTAL AND
COMMITTED OCCUPANCY RATE
1
FOR THE MALL
Effective Gross Rental /sq ft/ mth (S$)
Committed Occupancy Rate
1
2010
20.9
100%
2011
21.3
100%
2012
21.5
100%
FY2013E
3
23.3
100%
FY2014E
23.9
100%
HISTORICAL AND FORECAST NPI AND NPI
MARGIN FOR THE MALL
TENANT MIX FOR THE MALL
(BY RETAIL RENTAL INCOME
2
)
2010
19.0
59.5%
2011
23.3
69.0%
2012
23.4
71.6%
FY2013E
3
26.6
74.2%
4
FY2014E
27.1
73.6%
NPI (S$m) NPI Margin
1 Committed Occupancy Rate is dened as the occupancy rate based on all committed leases in respect of Mandarin Gallery for the period, including legally binding letters of offer which
have been accepted for vacant units, as a function of total lettable space (which excludes units which are undergoing conversion, amalgamation and/or sub-division)
2 For the 3 months ended 31 March 2013
4 FY2013E NPI margin is based on FY2013E NPI of S$26.6m divided by FY2013E Retail Income of S$35.8m
PRIME RETAIL LANDMARK ON ORCHARD ROAD
Ippudo at Mandarin Gallery Emporio Armani at Mandarin Gallery
Mandarin Gallery Facade
Mandarin Gallery enjoys a high degree of prominence, boasting a wide frontage of 152 metres along
Orchard Road. Featuring six duplexes and six street front shop units facing Orchard Road, the Mall is
a choice location for agship stores of international brands. The Mall comprises four levels of high-
end boutiques, shops and restaurants, and is complemented by Mandarin Orchard Singapore to
collectively provide an integrated hospitality and retail experience for shoppers and hotel guests.
2% Travel
Hair &
Beauty
F&B
Living &
Lifestyle
Watches &
Jewellery
Accessories
Fashion
Apparel
2% Services
46%
14%
13%
9%
7%
7%
Upside potential for growing
current RevPAR of the Hotel
which benets OUE H-Trust
through Master Lease
Agreement
Embedded growth in retail rents
from step-up rent structures with
turnover rent component for
Mandarin Gallery (the "Mall")
Completed / ongoing
refurbishments to upgrade the
Hotel funded by the Sponsor
will help to command higher
room rates
Ongoing optimisation of tenant
mix at the Mall in preparation
for next renewal cycle
ACTIVE ASSET MANAGEMENT
AND ENHANCEMENT
EMBEDDED ORGANIC
GROWTH
Potential doubling in hotel
portfolio size (by number of
rooms) from Sponsor ROFR
properties
Leverage Sponsors networks
in the real estate industry
to source for potentially
accretive deals
STRONG ACQUISITION
PIPELINE
1,051
rooms
196,336
sq ft
HOSPITALITY
AND RETAIL
MANDARIN
ORCHARD
SINGAPORE
MANDARIN
GALLERY
2
properties
KEY FINANCIAL HIGHLIGHTS
1 "FY2013E" refers to the estimated results for FY2013. FY2013E gures are computed based on (i) unaudited pro forma nancials from 1 January 2013 to 31 March 2013 and (ii) forecast
gures for the 9-month period from 1 April 2013 to 31 December 2013 ("Forecast Period 2013" or "FP2013E")
2 Forecast for 9 months from 1 April 2013 to 31 December 2013 only
DISTRIBUTABLE INCOME (S$ MILLION)
FP2013E
2
1Q2013
FY2013E
1
FY2014E
5.2% Growth
82.4
62.6
19.8
86.7
GROSS REVENUE (S$ MILLION) NET PROPERTY INCOME (S$ MILLION)
2010 FY2014E CAGR: 4.7%
2012
75.1
32.8
107.8
2011
73.8
107.6
33.8
35.8
FY2013E
1
75.3
111.1
2010
96.0
64.0
32.0
36.8
FY2014E
115.4
78.6
2010 FY2014E CAGR: 5.9%
2012
71.5
23.4
94.9
2011
70.7
94.1
23.3
26.6
FY2013E
1
71.6
98.1
2010
80.9
61.8
19.0
27.1
FY2014E
101.9
74.7
Mandarin Orchard Singapore Mandarin Gallery
INDICATIVE OFFERING TIMETABLE
18 July 2013 6.00 PM: Opening date and time for the Public Offer
23 July 2013 12.00 PM: Closing date and time for the Public Offer
25 July 2013 2.00 PM: Commencement of trading of the Stapled Securities on the SGX-ST
Applications for the Public Offer may be made through:
ATMs and internet banking websites of OCBC, DBS (including POSB), and UOB (including
its subsidiary Far Eastern Bank Limited)
Mobile banking platform of DBS
Printed application forms which form part of the Prospectus
The living room of the Presidential Suite on Orchard Wing of Mandarin Orchard Singapore
1,051
rooms
196,336
sq ft
HOSPITALITY
AND RETAIL
MANDARIN
ORCHARD
SINGAPORE
MANDARIN
GALLERY
2
properties
KEY FINANCIAL HIGHLIGHTS
1 "FY2013E" refers to the estimated results for FY2013. FY2013E gures are computed based on (i) unaudited pro forma nancials from 1 January 2013 to 31 March 2013 and (ii) forecast
gures for the 9-month period from 1 April 2013 to 31 December 2013 ("Forecast Period 2013" or "FP2013E")
2 Forecast for 9 months from 1 April 2013 to 31 December 2013 only
DISTRIBUTABLE INCOME (S$ MILLION)
FP2013E
2
1Q2013
FY2013E
1
FY2014E
5.2% Growth
82.4
62.6
19.8
86.7
GROSS REVENUE (S$ MILLION) NET PROPERTY INCOME (S$ MILLION)
2010 FY2014E CAGR: 4.7%
2012
75.1
32.8
107.8
2011
73.8
107.6
33.8
35.8
FY2013E
1
75.3
111.1
2010
96.0
64.0
32.0
36.8
FY2014E
115.4
78.6
2010 FY2014E CAGR: 5.9%
2012
71.5
23.4
94.9
2011
70.7
94.1
23.3
26.6
FY2013E
1
71.6
98.1
2010
80.9
61.8
19.0
27.1
FY2014E
101.9
74.7
Mandarin Orchard Singapore Mandarin Gallery
INDICATIVE OFFERING TIMETABLE
18 July 2013 6.00 PM: Opening date and time for the Public Offer
23 July 2013 12.00 PM: Closing date and time for the Public Offer
25 July 2013 2.00 PM: Commencement of trading of the Stapled Securities on the SGX-ST
Applications for the Public Offer may be made through:
ATMs and internet banking websites of OCBC, DBS (including POSB), and UOB (including
its subsidiary Far Eastern Bank Limited)
Mobile banking platform of DBS
Printed application forms which form part of the Prospectus
The living room of the Presidential Suite on Orchard Wing of Mandarin Orchard Singapore
TABLE OF CONTENTS
Page
NOTICE TO INVESTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v
CERTAIN DEFINED TERMS AND CONVENTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi
MARKET AND INDUSTRY INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RISK FACTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
OWNERSHIP OF THE STAPLED SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
CAPITALISATION AND INDEBTEDNESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
UNAUDITED PRO FORMA FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . 97
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
PROFIT FORECAST AND PROFIT PROJECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
STRATEGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
BUSINESS AND PROPERTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
MANAGEMENT AND CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
THE SPONSOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223
THE FORMATION AND STRUCTURE OF OUE H-TRUST, OUE H-REIT AND
OUE H-BT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230
THE FORMATION AND STRUCTURE OF OUE H-TRUST . . . . . . . . . . . . . . . . . . . . 230
THE FORMATION AND STRUCTURE OF OUE H-REIT . . . . . . . . . . . . . . . . . . . . . . 238
THE FORMATION AND STRUCTURE OF OUE H-BT. . . . . . . . . . . . . . . . . . . . . . . . 253
i
CERTAIN AGREEMENTS RELATING TO OUE H-TRUST, OUE H-REIT, OUE H-BT AND
THE PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267
TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285
CLEARANCE AND SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301
GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308
APPENDIX A REPORTING AUDITORS REPORT ON THE PROFIT FORECAST
AND PROFIT PROJECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
APPENDIX B REPORTING AUDITORS REPORT ON THE UNAUDITED PRO
FORMA FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . B-1
APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION . . . . . . . C-1
APPENDIX D INDEPENDENT PROPERTY VALUATION SUMMARY REPORTS. D-1
APPENDIX E INDEPENDENT MARKET RESEARCH REPORT . . . . . . . . . . . . . E-1
APPENDIX F INDEPENDENT TAXATION REPORT . . . . . . . . . . . . . . . . . . . . . . F-1
APPENDIX G TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
FOR AND ACCEPTANCE OF THE STAPLED SECURITIES IN
SINGAPORE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1
APPENDIX H LIST OF PRESENT AND PAST PRINCIPAL DIRECTORSHIPS OF
DIRECTORS AND EXECUTIVE OFFICERS OF THE REIT
MANAGER AND THE TRUSTEE-MANAGER . . . . . . . . . . . . . . . . H-1
ii
NOTICE TO INVESTORS
No person is authorised to give any information or to make any representation in connection with the
Offering not contained in this Prospectus and any information or representation not so contained
must not be relied upon as having been authorised by or on behalf of OUE H-Trust, OUE H-REIT,
OUE H-BT, the REIT Manager, the REIT Trustee, the Trustee-Manager, the Sponsor, the Joint
Global Coordinators or the Joint Bookrunners. If anyone provides you with different or inconsistent
information, you should not rely on it. Neither the delivery of this Prospectus nor any offer,
subscription, placement, purchase, sale or transfer made hereunder shall under any circumstances
imply that the information contained herein is correct as at any date subsequent to the date hereof
or constitute a representation that there has been no change or development reasonably likely to
involve a material adverse change in the business, affairs, conditions and prospects of the Stapled
Securities, OUE H-Trust, OUE H-REIT, OUE H-BT, the REIT Manager, the REIT Trustee, the
Trustee-Manager or the Sponsor since the date on the cover of this Prospectus. Where such
changes occur and are material or required to be disclosed by law, the SGX-ST and/or any other
regulatory or supervisory body or agency, the REIT Manager and/or the Trustee-Manager will make
an announcement of the same to the SGX-ST and, if required, issue and lodge an amendment to
this Prospectus or a supplementary document or replacement document pursuant to Section 282C,
Section 282D, Section 296 or Section 298 of the SFA and take immediate steps to comply with these
sections. Investors should take notice of such announcements and documents and upon release of
such announcements and documents shall be deemed to have notice of such changes.
None of OUE H-Trust, OUE H-REIT, OUE H-BT, the REIT Manager, the REIT Trustee, the
Trustee-Manager, the Sponsor, the Joint Global Coordinators, the Joint Bookrunners or any of
their respective affiliates, directors, officers, employees, agents, representatives or advisers is
making any representation or undertaking to any prospective purchaser or subscriber of the
Stapled Securities regarding the legality of an investment by such purchaser or subscriber of the
Stapled Securities under appropriate legal, investment or similar laws.
In addition, this Prospectus is issued solely for the purpose of the Offering and prospective
investors in the Stapled Securities should not construe the contents of this Prospectus as legal,
business, financial or tax advice. In making an investment decision, prospective investors must
rely upon their own examination of OUE H-Trust, OUE H-REIT and OUE H-BT and the terms of
this Prospectus, including the risks involved. Prospective investors should be aware that they are
required to bear the financial risks and other risks of an investment in the Stapled Securities, and
may be required to do so for an indefinite period of time. Prospective investors should consult their
own professional advisers as to the legal, tax, business, financial and related aspects of an
investment in the Stapled Securities.
Copies of this Prospectus and the Application Forms may be obtained on request, subject to
availability, during office hours, from:
Credit
Suisse
(Singapore)
Limited
Goldman
Sachs
(Singapore)
Pte.
Standard
Chartered
Securities
(Singapore) Pte.
Limited
Merrill Lynch
(Singapore)
Pte. Ltd.
Deutsche
Bank AG,
Singapore
Branch
Oversea-
Chinese
Banking
Corporation
Limited
One Raffles
Link
#03/04-01
South Lobby
Singapore
039393
One Raffles
Link
#07-01 South
Lobby
Singapore
039393
8 Marina
Boulevard
#19-01
Marina Bay
Financial Centre
Tower 1
Singapore
018981
50 Collyer
Quay
#14-01, OUE
Bayfront
Singapore
049321
One Raffles
Quay
#16-00 South
Tower
Singapore
048583
65 Chulia
Street
OCBC Centre
Singapore
049513
iii
and, where applicable, from certain members of the Association of Banks in Singapore, members
of the SGX-ST as well as merchant banks in Singapore. A copy of this Prospectus is also available
on the SGX-ST website: http://www.sgx.com.
The Stapled Securities have not been and will not be registered under the Securities Act and,
accordingly, may not be offered or sold within the United States except in certain transactions
exempt from or not subject to the registration requirements of the Securities Act. The Stapled
Securities are being offered and sold in offshore transactions as defined in and in reliance on
Regulation S.
The distribution of this Prospectus and the offering, subscription, placement, purchase, sale or
transfer of the Stapled Securities in certain jurisdictions may be restricted by law. OUE H-Trust,
OUE H-REIT, OUE H-BT, the REIT Manager, the REIT Trustee, the Trustee-Manager, the Sponsor,
the Joint Global Coordinators and the Joint Bookrunners require persons into whose possession
this Prospectus comes to inform themselves about and to observe any such restrictions at their
own expense and without liability to any of OUE H-Trust, OUE H-REIT, OUE H-BT, the REIT
Manager, the REIT Trustee, the Trustee-Manager, the Sponsor, the Joint Global Coordinators and
the Joint Bookrunners. This Prospectus does not constitute an offer of, or an invitation to
subscribe for or purchase, any of the Stapled Securities in any jurisdiction in which such offer or
invitation would be unlawful. Prospective investors are authorised to use this Prospectus solely for
the purpose of considering the subscription for the Stapled Securities in the Offering. For a
description of certain restrictions on the offer, transfer and sale of the Stapled Securities, see
Plan of Distribution Selling Restrictions. Persons to whom a copy of this Prospectus has been
issued shall not circulate to any other person, reproduce or otherwise distribute this Prospectus
or any information herein for any purpose whatsoever nor permit or cause the same to occur. No
one has taken any action that would permit a public offering to occur in any jurisdiction other than
Singapore.
In connection with the Offering, the Stabilising Manager (or any of its affiliates or other persons
acting on behalf of the Stabilising Manager) may, in consultation with the Joint Bookrunners and
at its discretion, over-allot or effect transactions which stabilise or maintain the market price of the
Stapled Securities at levels that might not otherwise prevail in the open market. However, there
is no assurance that the Stabilising Manager (or any of its affiliates or other persons acting on
behalf of the Stabilising Manager) will undertake stabilising action. Such transactions may be
effected on the SGX-ST and in other jurisdictions where it is permissible to do so, in each case
in compliance with all applicable laws and regulations (including the SFA and any regulations
thereunder). Such transactions may commence on or after the Listing Date, and, if commenced,
may be discontinued at any time and shall not be effected after the earlier of (i) the date falling
30 days from the Listing Date; or (ii) the date when the Stabilising Manager (or any of its affiliates
or other persons acting on behalf of the Stabilising Manager) has bought, on the SGX-ST, an
aggregate of 68,182,000 Stapled Securities, representing not more than 15.7% of the total
number of Stapled Securities in the Offering, to undertake stabilising actions. The exercise of the
Over-Allotment Option will not increase the total number of Stapled Securities outstanding.
iv
FORWARD-LOOKING STATEMENTS
Certain statements in this Prospectus constitute forward-looking statements. Statements that are
not historical facts, including statements about beliefs and expectations, are forward-looking
statements and can generally be identified by the use of forward-looking terminology such as the
words believe, expect, anticipate, plan, intend, estimate, project and similar words.
This Prospectus also contains forward-looking financial information in Unaudited Pro Forma
Financial Information, Managements Discussion and Analysis of Financial Condition and
Results of Operations, Profit Forecast and Profit Projection and other sections. Such forward-
looking statements and financial information involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of OUE H-Trust,
OUE H-REIT, OUE H-BT, the REIT Manager and/or the Trustee-Manager and/or industry results,
to be materially different from any future results, performance or achievements expressed or
implied by such forward-looking statements and financial information. Such forward-looking
statements and financial information are based on numerous assumptions regarding present and
future business strategies of the REIT Manager and/or the Trustee-Manager and the environment
in which OUE H-Trust, OUE H-REIT, OUE H-BT, the REIT Manager and/or the Trustee-Manager
will operate in the future. As these statements and financial information reflect the current views
of the REIT Manager and/or the Trustee-Manager concerning future events, these statements and
financial information necessarily involve risks, uncertainties and assumptions. Actual future
performance could differ materially from these forward-looking statements and financial
information. You should not place any reliance on these forward-looking statements and financial
information.
Among the important factors that could cause the actual results, performance or achievements of
OUE H-Trust, OUE H-REIT, OUE H-BT, the REIT Manager, the Trustee-Manager or the Sponsor
to differ materially from those in the forward-looking statements and financial information are the
conditions of, and changes in, the domestic, regional and global economies, including, but not
limited to, factors such as political, economic and social conditions, changes in government laws
and regulations affecting OUE H-Trust, competition in the hospitality markets in which OUE
H-Trust may operate or invest, industry, interest rates, inflation, relations with service providers,
relations with lenders, hostilities (including future terrorist attacks), the performance and
reputation of OUE H-Trusts properties and/or acquisitions, difficulties in identifying future
acquisitions, difficulty in completing and integrating acquisitions, changes in the Managers
directors and executive officers, risks related to natural disasters, adverse weather conditions,
general volatility of the capital markets, general risks relating to the hospitality markets in which
OUE H-Trust may invest and the market price of the Stapled Securities as well as other matters
not yet known to the Managers or not currently considered material by the Managers. Additional
factors that could cause actual results, performance or achievements to differ materially include,
but are not limited to, those discussed under Risk Factors, Profit Forecast and Profit Projection
and Business and Properties. These forward-looking statements and financial information speak
only as at the date of this Prospectus. The Managers expressly disclaim any obligation or
undertaking to release publicly any updates of or revisions to any forward-looking statement and
financial information contained herein to reflect any change in the expectations of the Managers
or the Sponsor with regard thereto or any change in events, conditions or circumstances on which
any such statement or information is based, subject to compliance with all applicable laws and
regulations, the rules of the SGX-ST and/or any other relevant regulatory or supervisory body or
agency.
v
CERTAIN DEFINED TERMS AND CONVENTIONS
OUE H-Trust, OUE H-REIT and OUE H-BT will publish their financial statements in Singapore
dollars. In this Prospectus, references to S$, $ or Singapore dollars and cents are to the
lawful currency of the Republic of Singapore. Certain monetary amounts set out in this Prospectus
have been subject to rounding adjustments. Accordingly, figures shown as totals in tables may not
be an arithmetic aggregation of the figures that precede them.
Unless otherwise defined, capitalised terms used in this Prospectus shall have the meanings set
out in Glossary.
The forecast and projected yields and yield growth are calculated based on the Offering Price and
the assumption that the Listing Date is 1 July 2013. Such yields and yield growth will vary
accordingly if the Listing Date is not 1 July 2013, or for investors who purchase the Stapled
Securities in the secondary market at a market price different from the Offering Price.
Any discrepancies in the tables, graphs and charts included in this Prospectus between the listed
amounts and totals thereof are due to rounding. Where applicable, figures and percentages are
rounded to one decimal place. Measurements in square metres (sq m) are converted to square
feet (sq ft) and vice versa based on the conversion rate of 1.0 sq m = 10.7639 sq ft. References
to Appendices are to the appendices set out in this Prospectus. All references in this Prospectus
to dates and times shall mean Singapore dates and times unless otherwise specified.
Unless otherwise specified, all information relating to the Initial Portfolio in this Prospectus is as
at 31 March 2013. See Business and Properties for details regarding the Initial Portfolio.
For the purposes of this Prospectus, real estate used for hospitality purposes includes hotels,
serviced residences, resorts and other lodging facilities, whether in existence by themselves as
a whole or as part of larger mixed-use developments, which may include commercial,
entertainment, retail and leisure facilities.
Properties which are used for hospitality-related purposes include retail and/or commercial
assets which are either complementary to or adjoining hospitality assets which are owned by OUE
H-REIT or which OUE H-REIT has committed to buy.
vi
MARKET AND INDUSTRY INFORMATION
This Prospectus includes market and industry data and forecasts that have been obtained from
internal surveys, reports and studies, where appropriate, as well as market research, publicly
available information and industry publications. Industry publications, surveys and forecasts
generally state that the information they contain has been obtained from sources believed to be
reliable, but there can be no assurance as to the accuracy or completeness of such included
information. The Managers have commissioned CBRE Pte. Ltd. (CBRE or the Independent
Market Research Consultant) to prepare the independent hotel and retail market report (the
Independent Market Research Report). (See Appendix E, Independent Market Research
Report for further details.) While the Managers have taken reasonable steps to ensure that the
information is extracted accurately and in its proper context, the Managers have not independently
verified any of the data from third party sources or ascertained the underlying economic
assumptions relied upon therein. Consequently, none of OUE H-Trust, OUE H-REIT, OUE H-BT,
the Managers, the REIT Trustee, the Sponsor, the Joint Global Coordinators or the Joint
Bookrunners makes any representation as to the accuracy or completeness of such information,
and each of them shall not be held responsible in respect of any such information and shall not
be obliged to provide any updates on the same.
Both the REIT Trustee and the Trustee-Manager have appointed Cushman & Wakefield VHS Pte.
Ltd. (C&W) and Jones Lang LaSalle Property Consultants Pte Ltd (Jones Lang LaSalle) as
the independent valuers of the Initial Portfolio (the Independent Valuers) respectively. (See
Appendix D, Independent Property Valuation Summary Reports for further details.)
vii
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OVERVIEW
The following overview is qualified in its entirety by, and is subject to, the more detailed
information contained or referred to elsewhere in this Prospectus. The meanings of terms not
defined in this overview can be found in the Glossary, the Stapling Deed, the OUE H-REIT Trust
Deed or the OUE H-BT Trust Deed (each as defined herein). A copy of the Stapling Deed, the OUE
H-REIT Trust Deed and the OUE H-BT Trust Deed can be inspected at the registered office of the
REIT Manager and the Trustee-Manager, which is located at 333 Orchard Road #33-00,
Singapore 238867.
Statements contained in this section that are not historical facts may be forward-looking
statements or are historical statements reconstituted on a pro forma basis. Such statements are
based on certain assumptions and are subject to certain risks, uncertainties and assumptions
which could cause actual results of OUE H-Trust to differ materially from those forecast or
projected. (See Forward-looking Statements for further details.) Under no circumstances should
the inclusion of such information herein be regarded as a representation, warranty or prediction
with respect to the accuracy of the underlying assumptions by OUE H-Trust, the REIT Manager,
the REIT Trustee, the Trustee-Manager, the Sponsor, the Joint Global Coordinators, the Joint
Bookrunners or any other person or that these results will be achieved or are likely to be achieved.
Investing in the Stapled Securities involves risks. Prospective investors are advised not to rely
solely on this section, but to read this Prospectus in its entirety and, in particular, the sections from
which the information in this section is extracted and Risk Factors to better understand the
Offering and OUE H-Trusts businesses and risks.
OVERVIEW OF OUE H-TRUST, OUE H-REIT AND OUE H-BT
OUE H-Trust
OUE H-Trust is a stapled group comprising OUE H-REIT and OUE H-BT. The OUE H-REIT Units
and OUE H-BT Units are stapled together under the terms of a stapling deed dated 10 July 2013
entered into among the REIT Manager, the REIT Trustee and the Trustee-Manager (the Stapling
Deed), and cannot be traded separately.
OUE H-REIT and OUE H-BT
OUE H-REIT is a Singapore-based REIT established with the principal investment strategy of
investing, directly or indirectly, in a portfolio of income-producing real estate which is used
primarily for hospitality and/or hospitality-related purposes, whether wholly or partially, as well as
real estate-related assets. In this Prospectus, real estate which is used for hospitality purposes
includes hotels, serviced residences, resorts and other lodging facilities, whether in existence by
themselves as a whole or as part of larger mixed-use developments, which may include
commercial, entertainment, retail and leisure facilities. Properties which are used for hospitality-
related purposes include retail and/or commercial assets which are either complementary to or
adjoining hospitality assets which are owned by OUE H-REIT or which OUE H-REIT has
committed to buy.
The REIT Manager is a wholly-owned subsidiary of the Sponsor.
1
As at the Listing Date, OUE H-BT, a Singapore-based business trust, will be dormant. It will,
however, become active if OUE H-REIT is unable to appoint a master lessee for Mandarin Orchard
Singapore
1
(the Hotel) at the expiry or termination of the Master Lease Agreement (as defined
herein), or for a newly acquired hospitality asset. In such circumstances, OUE H-BT will be
appointed by OUE H-REIT as a master lessee for that hospitality asset, and OUE H-BT will in turn
appoint a professional hotel manager to manage the day-to-day operations and marketing of the
hospitality asset. OUE H-BT exists primarily as a master lessee of last resort.
The Trustee-Manager is a wholly-owned subsidiary of the Sponsor.
(See Overview Structure of OUE H-Trust for further details.)
OBJECTIVES
The Managers principal objectives are to deliver regular and stable distributions to the holders of
Stapled Securities (the Stapled Securityholders) and to achieve long-term growth in
distributions and in the net asset value (NAV) per Stapled Security, while maintaining an
appropriate capital structure.
Initial Portfolio
The initial asset portfolio of OUE H-REIT, as at the Listing Date, will comprise the 1,051-room
Mandarin Orchard Singapore and the 196,336 sq ft (by gross floor area (GFA)) Mandarin
Gallery
2
(the Mall, and together with the Hotel, the Initial Portfolio).
KEY INVESTMENT HIGHLIGHTS OF OUE H-TRUST
The Managers believe that an investment in OUE H-Trust offers Stapled Securityholders the
following attractions:
(1) Opportunity to invest in a portfolio of premier assets which are strategically located in
the heart of Singapores renowned shopping district of Orchard Road
(a) Premier portfolio of high quality landmark assets
(b) Central location in Singapores prime shopping and tourism district with excellent
connectivity and accessibility
(c) Complementary mix of hospitality and retail assets with large and reputable customer
and tenant bases
(d) Sound asset fundamentals driving strong operational performance
(2) Beneficiary of Singapores economic, tourism, hospitality and robust retail sector
growth
(a) Favourable dynamics for hospitality market given strong growth momentum in tourist
arrivals
(b) Resilient retail sector due to stable domestic demand with further upside from increased
tourist retail spending
1 The hotel known as Mandarin Orchard Singapore, located at 333 Orchard Road, Singapore 238867.
2 The retail mall known as Mandarin Gallery, located at 333A Orchard Road, Singapore 238897.
2
(c) Revitalisation of Orchard Road which will increase shopper traffic, retail sales for malls
and RevPAR (as defined herein) for hotels located on Orchard Road
(3) Stable distributions with downside protection via long term Master Lease Agreement
(a) Stability from the Master Lease Agreement
(b) Complementary exposure to resilient retail income
(4) Well-positioned to capitalise on growth opportunities
(a) Embedded organic growth through improvement in RevPAR and retail rents
(b) Opportunities for growth through active asset management and asset enhancement of
the Initial Portfolio
(c) Acquisition pipeline through the Sponsor ROFR Properties (as defined herein) and
assets from third parties
(5) Strong, reputable and committed Sponsor
(a) Track record as a leading real estate owner, developer and operator
(b) Alignment of the Sponsors and the Managers interests with those of Stapled
Securityholders
(6) Experienced Board and management team with proven track record
Details of these key investment highlights are set out below:
(1) Opportunity to invest in a portfolio of premier assets which are strategically located in
the heart of Singapores renowned shopping district of Orchard Road
(a) Premier portfolio of high quality landmark assets
Mandarin Orchard Singapore is a renowned upscale hotel with strong brand recognition
given its relatively long history of operations in Singapore. An icon of world class hospitality
in Singapore since 1971, it features 1,051 rooms, five food and beverage (F&B) outlets,
and approximately 25,511 sq ft of meeting and function space with a capacity of up to 1,840
people. The Hotel is one of the top accommodation choices in Singapore for leisure and
business travellers globally, having won numerous internationally recognised awards
including the 2012 World Luxury Hotel Awards for Singapore.
Mandarin Gallery is a retail mall which boasts a wide frontage of 152 metres along Orchard
Road, providing the Mall with a high degree of prominence. Featuring six duplexes and six
street front shop units facing Orchard Road, Mandarin Gallery is a choice location for flagship
stores of international brands. The ground floor of this high-end fashion mall benefits from
high street visibility due to its direct access to Orchard Road and connection to the lobby of
Mandarin Orchard Singapore. The Mall comprises four levels of high-end boutiques, shops
and restaurants, and is complemented by Mandarin Orchard Singapore to collectively
provide an integrated hospitality and retail experience for shoppers and hotel guests.
3
Location Map of Mandarin Orchard Singapore and Mandarin Gallery
Somerset
MRT
Orchard Road
Orchard Road
Orchard Road
O
r
c
h
a
r
d

L
i
n
k

Wheelock
Place
ION
Orchard
Wisma
Atria
Tang
Plaza
Paragon
Mount
Elizabeth
Hospital
The
Heeren
Knights -
bridge
Ngee Ann City
The
Centrepoint
313@
Somerset
TripleOne
Somerset
Orchard
Central
Cathay
Cineleisure
Shaw
House
Scotts
Square
Lucky
Plaza
MOS
MG
Central Region
Expressways
Orchard Road Medical Cluster
Orchard
MRT
Mandarin
Gallery
Source: Independent Market Research Report.
(b) Central location in Singapores prime shopping and tourism district with excellent
connectivity and accessibility
The Initial Portfolio comprises Mandarin Orchard Singapore and Mandarin Gallery which
offers a unique combination of upscale lodging and high-end retail in the heart of the Orchard
Road shopping district. Orchard Road is Singapores premier shopping district, one of the
most visited tourist destinations and is host to a variety of popular lifestyle and entertainment
events and festive activities which both Mandarin Orchard Singapore and Mandarin Gallery
are well-placed to benefit from. Orchard Road is also located in the core central region of
Singapore in close proximity to key business districts, resulting in a strong flow of
pedestrians, tourists and business travellers.
Mandarin Orchard Singapore is located next to a major medical cluster which includes
leading medical facilities such as the Paragon Medical Centre and Mount Elizabeth Hospital
and hence would benefit from the increasing arrival of medical travellers.
The Initial Portfolio is easily accessible via public transport and is well served by a network
of major roads. The Somerset and Orchard Mass Rapid Transit (MRT) stations are within
walking distance, with both stations being two to three stops away from the key interchange
stations of Dhoby Ghaut and City Hall, as well as the upcoming interchange station of
Newton in 2015. The Orchard Road area is also generally well served by a network of major
roads and bus routes, facilitating easy access to other parts of Singapore. Popular tourist
destinations such as Marina Bay Sands and Gardens by the Bay, as well as key business
districts such as the central business district (Central Business District or CBD) and the
Marina Bay area, are approximately a 10- to 15-minute drive away.
4
(c) Complementary mix of hospitality and retail assets with large and reputable customer
and tenant bases
OUE H-Trust offers Stapled Securityholders unique exposure to both the hospitality and
retail markets and benefits from earnings diversification in addition to synergies due to
complementary target customer segments.
Contribution by Asset Value as at
31 March 2013 (S$ million)
(1)

Mandarin Orchard
Singapore
S$75m
73%
Estimated Contribution by Net
Property Income
(2)
for Projection Year
2014 (as defined herein) (S$ million)
Mandarin Orchard
Singapore
S$1,220m
69%
Mandarin
Gallery
S$536m
31% Total:
S$1,756m
Mandarin Orchard
Singapore
S$75m
73%
Mandarin
Gallery
S$27m
27%
Total:
S$102m
Notes:
(1) Based on the independent valuations of Mandarin Orchard Singapore and Mandarin Gallery.
(2) Net Property Income or NPI means the gross revenue of the Initial Portfolio (comprising the gross rental
payments under the Master Lease Agreement, which comprises a Fixed Rent and a Variable Rent, and the
Retail Income (each as defined herein) from Mandarin Gallery) (Gross Revenue) less (i) property taxes; (ii)
property management fee; and (iii) other property operating expenses (collectively, Property Expenses).
The prominent and strong branding of Mandarin Orchard Singapore allows it to capture a
more diversified customer profile ranging from leisure to corporate customers. For the
financial year ended 31 December (FY) 2012, 71.5% of the Hotels customers were
transient and corporate customers who are typically more profitable given their preference
and propensity to pay for executive-style hotel rooms with higher room rates. Of the
corporate customers, no single industry accounted for more than 6.0% of the Hotels room
revenues, which minimises industry concentration risk and over-reliance on any single
industry.
Mandarin Gallery is positioned as a high-end fashion mall and a tailored destination for its
specific target audience. Its unique positioning has attracted like-minded premium brands
such as Paul Smith, Y-3, Fred Perry Laurel Wreath and Bathing Ape. Mandarin Gallery has
a total of 86 local and international tenants occupying 97 shops as at 31 March 2013. The
leasing strategy to minimise brand duplication with neighbouring malls creates a distinct
identity which is a source of competitive advantage for the Mall. Being a fashion mall, fashion
apparel is a core focus and accounts for 45.7% of tenant mix by retail rental income for the
three months ended 31 March 2013. Mandarin Gallery also has other complementary retail
categories such as Living & Lifestyle, F&B, Accessories and Hair & Beauty to provide a
diversified and holistic retail offering to the customers.
5
FY2012 Customer Profile for Mandarin
Orchard Singapore (By Room Revenue)
Tenant Mix for Mandarin Gallery
(By Retail rental income)
(1)
Transient
(2)
45%
Corporate
(3)

26%
Wholesale
(4)
29%
Fashion
Apparel
46%
Accessories
14%
Watches &
Jewellery
13%
F&B
9%
Living &
Lifestyle
7%
Hair & Beauty
7%
Services
2%
Travel
2%
Notes:
(1) For the three months ended 31 March 2013.
(2) Transient refers to revenue derived from rental of rooms and suites to individuals or groups occupying less
than 10 rooms per night and who do not have contracted annual rates with the Hotel.
(3) Corporate refers to revenue derived from the rental of rooms and suites booked via a corporate or
government entity that has contracted annual rates with the Hotel.
(4) Wholesale refers to revenue derived primarily from the rental of rooms and suites booked via a third party
travel agent on a wholesale contracted rate basis.
(d) Sound asset fundamentals driving strong operational performance
With a portfolio comprising both hospitality and retail asset classes, OUE H-Trust would be
able to leverage the potential upside from the hospitality operations of Mandarin Orchard
Singapore while enjoying the stability of retail rents from Mandarin Gallery.
Mandarin Orchard Singapores RevPAR
1
recorded a compounded annual growth rate
(CAGR) of 6.4% from 2010 to 2012 with occupancy levels of 84.6% to 86.5%, and RevPAR
is expected to grow by a CAGR of 2.7% from 2012 to FY2014E (as defined herein). This is
largely driven by the strong and increasing demand for hotel rooms in Singapore attributable
to a widening variety of tourist destinations and events, strong government support for the
tourism sector and Singapore increasingly becoming the venue of choice for regional and
global meetings, incentive, convention and exhibition events (MICE), all of which have
resulted in record levels of RevPAR which are expected to be maintained going forward. In
addition, Mandarin Orchard Singapore also benefits from on-going efforts by the Singapore
government to rejuvenate Orchard Road.
As at 31 March 2013, the Committed Occupancy Rate
2
for Mandarin Gallery is 100.0% due
to the strong domestic retail demand in Singapore. Mandarin Gallery has also maintained
100.0% Committed Occupancy Rates since refurbishments were completed in 2009, with
rental rates expected to grow by a CAGR of 5.4% from 2012 to FY2014E.
1 RevPAR refers to room revenue per Available Room. This figure is computed based on the total room revenue of
Mandarin Orchard Singapore divided by the total number of Available Rooms for the relevant period.
2 Committed Occupancy Rate refers to the occupancy rate based on all committed leases in respect of Mandarin
Gallery for the period, including legally binding letters of offer which have been accepted for vacant units, as a
function of total lettable space (which excludes units which are undergoing conversion, amalgamation and/or
sub-division).
6
The charts below show the historical and forecast RevPAR and occupancy trends for
Mandarin Orchard Singapore and rental and Committed Occupancy Rate trends for
Mandarin Gallery:
Historical and Forecast RevPAR and Occupancy Rate Trends
for Mandarin Orchard Singapore
237.9
256.6
84.6%
85.8%
86.5%
89.7%
87.7%
2010 2011 2012 FY2013E
(1)
FY2014E
215.1
243.3
251.2
Historical and Forecast Rental and Committed Occupancy Rate Trends
for Mandarin Gallery
20.9
21.3
21.5
23.3
23.9
100.0% 100.0% 100.0% 100.0% 100.0%
2010 2012 FY2013E
(1)
FY2014E
Effective Gross Rental / sq ft / mth (S$) Committed Occupancy Rate
2011
Notes:
(1) FY2013E refers to the estimated results for FY2013. FY2013E figures are computed based on (i) unaudited
pro forma financials from 1 January 2013 to 31 March 2013 and (ii) forecast figures for the 9-month period
from 1 April 2013 to 31 December 2013 (Forecast Period 2013 or FP2013E).
(2) Beneficiary of Singapores economic, tourism, hospitality and robust retail sector
growth
(a) Favourable dynamics for hospitality market given strong growth momentum in tourist
arrivals
The Managers believe that an investment in OUE H-Trust represents an attractive
opportunity to invest in and gain exposure to the buoyant Singapore hospitality market, which
has been growing steadily with visitor arrivals increasing from 7.6 million in 2002 to 14.4
million in 2012 according to the Independent Market Research Report, representing a CAGR
of 6.6%.
7
Going forward, the Managers have identified the following trends as key drivers of growth for
the hospitality market in Singapore through a combination of increasing tourist arrivals and
the increased average length of stay resulting in higher levels of tourism spending:
Increasing prominence of Singapore as a key regional financial centre with an
ever-growing number of multi-national corporations setting up their regional
headquarters here to leverage the excellent infrastructure and pro-business regulatory
framework and as a global MICE destination of choice which will further promote
business travel. Singapore was ranked Asias Top Convention City for the 11th time
(International Congress and Convention Association Global Rankings 2012), the Top
International Meeting City for the fourth consecutive year and Asias Top Country and
City for meetings for 28 consecutive years (Union of International Association 2011)
according to the Independent Market Research Report;
4.6 4.6
5.3
5.7
6.0
6.3
6.6
6.8
2008 2009 2010 2011 2012 2013E 2014E 2015E
Historical and Forecast Business Traveller Arrivals in Singapore (million)
Source: Euromonitor
1
.
Rise of the higher value-added medical tourism sector, which is one of the fastest
growing industries in Singapore with the number of foreign patients growing by more
than 15.0% per annum since 2010 and medical tourism revenues for 2013 expected to
reach an all-time high of S$1.4 billion according to the Independent Market Research
Report, in line with the Singapore Medicine Initiative in 2003 aimed at promoting
Singapore as Asias leading medical hub and the ideal destination for advanced patient
care; and
1 Euromonitor has not provided its consent, for the purposes of section 249 (read with section 302(1)) of the SFA and
for the purposes of Section 282I of the SFA, to the inclusion of the information extracted from the relevant report
published by it, and is therefore not liable for such information under sections 253 and 254 (both read with section
302(1)) of the SFA and Sections 282N and 282O of the SFA. While the Managers have taken reasonable actions
to ensure that the information has been reproduced in its proper form and context, and that it has been extracted
accurately and fairly, neither the Managers, the Joint Global Coordinators, the Joint Bookrunners or any other party
has conducted an independent review of the information contained in such report or verified the accuracy of the
contents of the relevant information.
8
Historical and Forecast Medical Tourist Arrivals in Singapore (000)
370
342
399
461
533
604
681
761
2008 2009 2010 2011 2012 2013E 2014E 2015E
Ongoing transformation of Singapores tourism landscape with a strong existing stable
of international events and marquee tourist attractions such as the Formula One
Singapore Grand Prix, Universal Studios, Gardens by the Bay, River Safari, Marine Life
Park and Adventure Cove at Resorts World, are expected to be further bolstered by
upcoming developments such as the Singapore Sports Hub and the National Art
Gallery.
Coupled with the continued efforts by the Singapore government to enhance Singapores
rising reputation as a vibrant and premier tourist destination, such as the plans for a fourth
airport terminal to accommodate the expected growth in tourist arrivals, the tourism sector is
expected to maintain its growth trajectory over the next few years with tourist arrivals
projected to reach 18.3 million in 2017 according to the Independent Market Research
Report, achieving Singapore Tourism Boards (STB) target of S$30 billion in tourism
receipts by 2015.
Historical and Forecast Visitor Arrivals in Singapore (million)
7.6
6.1
8.3
8.9
9.8
10.3 10.1
9.7
11.6
13.2
14.4
18.3
2002 2003 2004 2005 2006 2009 2010 2011 2012
2017E
Sep 11 and SARS Sub-Prime
2007 2008
9
Historical and Forecast Tourism Receipts (S$ billion)
8.8
6.9
9.8
10.9
12.4
14.1
15.2
12.8
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
2015E
18.9
22.3
23.0
30.0
Source: STB
1
.
The Managers believe that the projected increase in the number of hotel rooms over the next
three years will be mitigated by the projected increase in tourist inflow.
The following graph shows the current and expected hotel room supply in Orchard Road for
2012 to 2015:
Current and Expected Hotel Room Supply in Orchard Road
7,585
220
1,264 9,069
2012 2013 2014 2015 Total 2015
Current Estimated Hotel Supply Estimated Future Net Increase Estimated Hotel Supply by End-2015
The expected moderate increase in hotel room supply in Orchard Road will likely underpin
stability in RevPAR for hotels in Orchard Road over the next few years, thereby benefitting
Mandarin Orchard Singapore.
1 STB has not provided its consent, for the purposes of section 249 (read with section 302(1)) of the SFA and for the
purposes of Section 282I of the SFA, to the inclusion of the information extracted from the relevant report published
by it, and is therefore not liable for such information under sections 253 and 254 (both read with section 302(1)) of
the SFA and Sections 282N and 282O of the SFA. While the Managers have taken reasonable actions to ensure that
the information has been reproduced in its proper form and context, and that it has been extracted accurately and
fairly, neither the Managers, the Joint Global Coordinators, the Joint Bookrunners or any other party has conducted
an independent review of the information contained in such report or verified the accuracy of the contents of the
relevant information.
10
217
162
211
244
264 265 265 264
267
270
2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E
Singapore Upscale Hotels RevPAR Trend (S$ per night)
(b) Resilient retail sector due to stable domestic demand with further upside from
increased tourist retail spending
Singapores retail sector outlook remains positive with strong domestic demand continuing to
provide a solid base of retail spending, while the rapid increase in tourist arrivals and hence
tourist retail spending will provide significant upside potential. As a result, retail trade
operating receipts are expected to grow from S$40.8 billion in 2012 to S$56.4 billion in 2017,
representing a CAGR of 6.7% according to the Independent Market Research Report.
Robust Growth in Singapore Retail Sales Index
1
101.0 100.0
104.4
106.9
114.2
121.4
129.4
138.4
147.5
2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E
Over the past decade, real private consumption expenditure in Singapore has also seen
consistent growth even through periods of negative GDP growth, indicating resilient
domestic retail spending regardless of economic cycles. Furthermore, the purchasing power
of the average household has also increased significantly given that the average household
size has remained at approximately 3.5 persons since 2002 while the median monthly
household income grew by 20.0% from S$5,000 in 2010 to S$6,000 in 2012 according to the
Independent Market Research Report. As such, the Managers believe domestic demand to
be strong and stable going forward, supporting retail sales growth.
1 The Retail Sales Index was rebased in 2010.
11
Tourism receipts attributable to shopping/retail spending increased from S$2.9 billion from
2002 to S$4.8 billion in 2012, representing a CAGR of 5.2% and contributing to a significant
portion of total tourism spending of 20.7% in the same period according to the Independent
Market Research Report. The continued growth in tourist retail spending can be expected to
provide further earnings upside to retail malls in Singapore.
Tourist Retail Spending (S$ billion)
2.9
2.3
3.1
3.3
3.7
3.5
3.3
4.0
4.5
4.8
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
3.5
(c) Revitalisation of Orchard Road which will increase shopper traffic, retail sales for
malls and RevPAR for hotels located on Orchard Road
Orchard Road remains the most visited free-access attraction in Singapore according to the
Independent Market Research Report. It is also host to a variety of popular lifestyle and
entertainment events and festive activities such as the annual Great Singapore Sale,
Fashion Season Orchard and Christmas Light-up. STB has consistently undertaken
rejuvenation projects to significantly beautify and enhance the landscape of the area through
infrastructure and landscape additions. The Singapore government has been active in
implementing initiatives to make Orchard Road increasingly pedestrian-friendly over time by
linking buildings and shopping centres through underpass walkways. As such, both Mandarin
Orchard Singapore and Mandarin Gallery are expected to benefit from infrastructure
improvement and enhanced positioning.
The expected robust growth in retail sales in Singapore, and in particular the Orchard Road
region as a result of the abovementioned factors will result in increased demand for retail
space in malls located in the vicinity as retail businesses seek to ride the retail sales growth
wave. As a result, rental rates are expected to be on the rise going forward according to the
Independent Market Research Report. Mandarin Gallery, being situated in a prime Orchard
Road location, will also be a key beneficiary of this trend.
12
The following charts shows the growth in RevPAR for hotels and rental rates for malls in
Orchard Road:
Rental Rates for Malls on Orchard Road
(Effective Gross Rental/
sq ft/mth (S$))
RevPAR for Hotels in Orchard Road
(S$ per night)
229.6
246.1 246.9
252.1
258.2
263.2
272.6
275.7
2010 2011 2012 2013E 2014E 2015E 2016E 2017E
30.2
31.6 31.6
32.2
33.2
34.2
35.2
36.2
2010 2011 2012 2013E 2014E 2015E 2016E 2017E
(3) Stable distributions with downside protection via long term Master Lease Agreement
(a) Stability from the Master Lease Agreement
On the Listing Date, the Master Lessee will lease and operate Mandarin Orchard Singapore
pursuant to the terms of the Master Lease Agreement. To support long-term stability of
distributions, the Master Lease Agreement will be entered into for a period of 15 years with
an option for the Master Lessee to obtain an additional lease for a further term of 15 years
on the same terms and conditions, save for amendments required due to a change in law and
without any further option to renew. This provides OUE H-Trust with a stable income stream
during the term of the Master Lease Agreement which mitigates the volatility of short-term
stays by hotel guests. Furthermore, the Master Lessee is also the Sponsor, which has a
strong financial position and reputation as a leading real estate company listed on the
SGX-ST. This provides OUE H-Trust with further assurance that the terms of the Master
Lease Agreement will be honoured by the Master Lessee.
The Master Lease Agreement has been structured to provide stable distributions to the
Stapled Securityholders in the form of a fixed rent (Fixed Rent) payment and a variable rent
component. The variable rent component allows Stapled Securityholders to benefit from the
outperformance of the Hotel through receiving a stipulated percentage of the Hotels Gross
Operating Revenue and Gross Operating Profit (each as defined herein), less the Fixed
Rent.
Fixed
Rent
(1)
(S$ million)
Variable Rent
Percentage
of Gross
Operating
Revenue +
Percentage
of Gross
Operating
Profit
Fixed
Rent
(1)
(S$ million)
Mandarin
Orchard
Singapore 45.0 33.0% 27.5% 45.0
Note:
(1) Fixed Rent for the 9-month Forecast Period 2013 is S$33.8 million.
13
Fixed and Variable Rent Composition (S$ million)
70.3% 61.0% 60.0% 59.8% 57.3%
29.7%
39.0% 40.0% 40.2%
42.7%
64.0
73.8
75.1 75.3
78.6
2010 2011 2012 FY2013E
(1)
FY2014E
Fixed Rent Variable Rent
Note:
pro forma financials from 1 January 2013 to 31 March 2013, and (ii) forecast figures for the 9-month period
from 1 April 2013 to 31 December 2013.
(b) Complementary exposure to resilient retail income
The current earnings of Mandarin Gallery are underpinned by existing lease arrangements. As at
31 March 2013, the weighted average lease term to expiry (by net lettable area (NLA)) is 2.4
years, with only 0.9% and 19.8% of total leases (by NLA) expected to expire in Forecast Period
2013 and the financial year ending 31 December 2014 (Projection Year 2014 or FY2014E)
respectively. Mandarin Gallery is expected to contribute 26.9% and 26.6% of OUE H-Trusts total
Net Property Income for Forecast Period 2013 and FY2014E. The current lease expiry profile is
expected to provide earnings stability to OUE H-Trust, which will be further supplemented by the
resilient rents for retail malls in the Orchard Road area. 68.7% of the forecast Net Property Income
for FY2014E (translating to approximately 4.5% forecast distribution yield for OUE H-Trust) is
expected to be derived from stable rents comprising the Fixed Rent from Mandarin Orchard
Singapore and the Net Property Income from the Mall.
Contribution to total Net Property Income at the OUE H-Trust level will be from Fixed Rent
and Variable Rent from the Master Lease Agreement for Mandarin Orchard Singapore as well
as Net Property Income from Mandarin Gallery.
The following charts set out the lease expiry profile (by NLA) for Mandarin Gallery as at 31
March 2013 and the breakdown of the estimated contribution to total Net Property Income for
Projection Year 2014:
Mandarin Gallery
Lease Expiry Profile
NPI Breakdown for
Projection Year 2014
(By NLA) 69% NPI Contribution
from Stable Rents from Stable Rents
(1)
0.9%
19.8%
50.1%
29.2%
FY2013E FY2014E FY2015E FY2016E
Mandarin
Orchard
Singapore
Fixed Rent
42%
(1)
Mandarin Orchard
Singapore Variable
Rent
31%
(1)
Mandarin
Gallery NPI
27%
Total:
S$102m
Note:
(1) Assumes Mandarin Orchard Singapores property expenses of S$3.8 million in FY2014E are allocated across
Fixed Rent and Variable Rent in proportion to their respective contributions to Gross Revenue.
14
OUE H-REIT intends to distribute 100.0% of its property-related income chargeable to tax
under the Income Tax Act, Chapter 134 of Singapore (the Income Tax Act) after the
deduction of allowable expenses and capital allowances, if any (the Taxable Income) to
Stapled Securityholders for Forecast Period 2013 and Projection Year 2014. Thereafter, OUE
H-REIT will distribute at least 90.0% of its Taxable Income, with the actual level of distribution
to be determined at the REIT Manager Boards discretion after having considered OUE
H-Trusts funding requirements, other capital management considerations and the overall
stability of distributions.
The table below sets out the forecast and projected distribution yields:
Distribution Yield (%)
Based on the
Offering Price
Illustrative annualised distribution yield from Listing Date
(1)
7.36
Full Year 2013
(2)
7.15
Projection Year 2014 7.46
Growth in distribution yield
(3)
(%) 4.4
Notes:
(1) Annualised distribution yield assuming a Listing Date of 1 July 2013. For the avoidance of doubt, Stapled
Securityholders who have subscribed for Stapled Securities pursuant to the Offering will not be entitled to any
distributions made for the period from 1 January 2013 and ending on the day immediately preceding the
Listing Date.
(2) The full year distribution yield for 2013 (the Full Year 2013 Distribution) has been calculated based on the
unaudited pro forma historical income available for distribution from 1 January 2013 to 31 March 2013 of S$19.9
million and the forecast income available for distribution for the 9-month Forecast Period 2013 of S$62.6 million.
(3) Calculated as the increase in distribution per unit (DPU) of Projection Year 2014 over the Full Year 2013
Distribution per Stapled Security.
(See Profit Forecast and Profit Projection for further details.)
OUE H-BT may make distributions in the future when it becomes active and profitable.
OUE H-Trusts distributions will be paid on a quarterly basis in arrears for the periods ending
31 March, 30 June, 30 September and 31 December each year. OUE H-Trusts first
distribution after the Listing Date will be for the period from the Listing Date to 31 December
2013 and will be paid by OUE H-Trust on or before 31 March 2014.
(4) Well-positioned to capitalise on growth opportunities
For the benefit of Stapled Securityholders, the Managers aim to maintain and grow an
investment portfolio of hospitality and hospitality-related assets primarily in Singapore, and
to extend the portfolio to include other places where suitable opportunities arise.
15
The Managers intend to achieve growth for OUE H-Trust by way of the following:
(a) Embedded organic growth through improvement in RevPAR and retail rents
Average RevPAR for Mandarin Orchard Singapore for FY2012 was S$243. According to the
Independent Market Research Report, average RevPAR for upscale hotels in Singapore for
FY2012 was S$264, which is 8.6% higher than the RevPAR for Mandarin Orchard Singapore.
Hence, the Managers believe that the RevPAR for Mandarin Orchard Singapore will be able
to grow over the next few years to become in line with that of the broader upscale market
segment. This in turn will allow OUE H-Trust to benefit from the Master Lease Agreement
which is structured for upside sharing from variable rents by capturing future improvements
in RevPAR.
Potential for Further RevPAR Upside (S$)
243.3
251.2
(1)
256.6
246.9
252.1
258.2
264.3
265.4 265.1
2012 FY2013E FY2014E
Mandarin Orchard Singapore RevPAR Orchard Road Hotels RevPAR
Singapore Upscale Hotels RevPAR
+8.6%
+5.6%
+3.3%
Note:
pro forma financials from 1 January 2013 to 31 March 2013 and (ii) forecast figures for the 9-month period
from 1 April 2013 to 31 December 2013 (Forecast Period 2013 or FP2013E).
Mandarin Gallery leases are typically structured with two to five-year tenures with base rent,
service charge, advertising and promotional charge and turnover rent, which is calculated as
a percentage of the tenants gross turnover. As at 31 March 2013, 46.7% of the leases (by
NLA) have step-up structures in the Basic Rent (as defined herein) with a weighted average
annual step-up of approximately 5.5%, thus providing a stable and growing rental income
stream which also acts as an inflation hedge. More than 90.0% of the leases (by NLA as at
31 March 2013) have a turnover rent component which allows OUE H-Trust to benefit directly
from the expected growth in retail sales.
(b) Opportunities for growth through active asset management and asset enhancement of
the Initial Portfolio
The Managers intend to deliver a stable income stream for Stapled Securityholders and will
be actively maximising asset returns, primarily through monitoring and managing the Master
Lessees performance under the Master Lease Agreement as well as through refurbishment
and/or upgrading programmes on Mandarin Orchard Singapore which will be aimed at
improving the image and attractiveness of the Hotel and ultimately to increase RevPAR
performance.
16
Prior to the Offering, the Sponsor budgeted for the addition of 26 new hotel rooms and
refurbishment of 430 hotel rooms. This work commenced in FY2013.
The REIT Manager will also work closely with the Property Manager (as defined herein) of
Mandarin Gallery to develop and maintain strong relationships with tenants, in order to
achieve high tenant retention levels. For example, in FY2012, 67.9% of the leases by NLA
which were expiring in FY2012 were renewed, which amounted to 34.2% of all leases by
NLA. Other potential initiatives may be introduced to optimise the tenant mix with the view
to increase shopper traffic, and increase rents from the Mall.
The REIT Manager seeks to ensure that the Hotel Manager (as defined herein) of Mandarin
Orchard Singapore and the Property Manager of Mandarin Gallery will capitalise on the
expected increase in demand from economic and tourism growth and supply dynamics of the
Singapore hotel and retail markets to improve occupancy rates, average room rates for the
Hotel as well as passing rental rates for Mandarin Gallery. The Managers believe that there
is potential within the Initial Portfolio to identify asset enhancement opportunities to further
improve returns to Stapled Securityholders.
(c) Acquisition pipeline through Sponsor ROFR Properties or assets from third parties
The Sponsor has granted a right of first refusal (ROFR) to OUE H-Trust which provides
OUE H-Trust with access to potential future acquisition opportunities which are used
primarily for hospitality and/or hospitality-related purposes (the Sponsor ROFR). (See
Certain Agreements Relating to OUE H-Trust, OUE H-REIT, OUE H-BT and the Properties
Right of First Refusal Agreement for further details.) The Managers also intend to
selectively acquire additional third party hospitality and hospitality-related assets that meet
its investment criteria to enhance OUE H-Trusts yield and cash flow. The Managers will be
able to leverage on and benefit from the Sponsors network for future pipeline of assets that
OUE H-Trust could acquire should they meet OUE H-Trusts investment criteria and further
diversify and strengthen OUE H-Trusts footprint in the hospitality market.
The Sponsor has identified three properties, under the Sponsor ROFR, which could
potentially be offered to OUE H-Trust as future pipeline assets
1
. For the purposes of this
Prospectus, properties owned or majority controlled by the Sponsor which fall within the
Sponsor ROFR are referred to as the Sponsor ROFR Properties.
1 Marina Mandarin was not included as a Sponsor ROFR Property as the Sponsor only has an effective stake of 30.0%
in Marina Mandarin and does not have majority control over this property. Currently, 6 Shenton Way Towers One and
Two is not a Sponsor ROFR Property as it does not fall within OUE H-REITs investment mandate under the category
of hospitality-related purposes, because 6 Shenton Way Towers One and Two is not an asset which is either
complementary to or adjoining hospitality assets which are owned by OUE H-REIT or which OUE H-REIT has
committed to buy.
17
Selected details of the Sponsor ROFR Properties, which could potentially be offered to OUE
H-Trust are set out in the table below:
Name of Sponsor ROFR
Property/Ownership (%)
Location Number of Hotel
Rooms
Valuation as at
31 December
2012
(S$ million)
Crowne
Plaza
Changi
Airport/
100.0%
Singapore 320
(1)
291.0
Meritus
Mandarin
Haikou/
100.0%
Haikou, Peoples
Republic of China
(the PRC)
318 59.5
(2)
Meritus
Shantou
China/
80.0%
Shantou, the PRC 318 62.5
(3)
Total Number of Hotel Rooms/Valuation 956
(1)
413.0
Notes:
(1) Excluding the proposed additional 200 hotel rooms expected to be developed on the plot of land adjacent to Crowne
Plaza Changi Airport. The proposed additional 200 hotel rooms are expected to be completed by the end of 2015.
(2) Valuation of Renminbi (RMB)298 million converted to Singapore Dollars (SGD) at an exchange rate of
5.007 RMB/SGD as at 31 March 2013.
(3) Valuation of RMB313 million converted to SGD at an exchange rate of 5.007 RMB/SGD as at 31 March 2013.
The following graph illustrates the potential for growth of OUE H-Trusts portfolio based on
the three Sponsor ROFR Properties.
Potential Doubling of Number of Hotel Rooms
1,051
2,033
1,077
(1)
956
1,156
(2)
Current Portfolio Sponsor ROFR Properties Enlarged Portfolio
88.8% 107.3%
growth
2,233
(2)
Notes:
(1) Including the addition of 26 new hotel rooms in FY2013.
(2) Including the proposed additional 200 hotel rooms expected to be developed on the plot of land adjacent to Crowne
18
The three Sponsor ROFR Properties, with an aggregate of 1,156 hotel rooms (comprising
956 existing hotel rooms and the proposed additional 200 hotel rooms expected to be
completed by the end of 2015), provide a visible pipeline for OUE H-Trust and offer
acquisition opportunities to potentially double the number of hotel rooms owned by OUE
H-Trust.
As at the Listing Date, OUE H-Trust is expected to have an Aggregate Leverage (as defined
herein) of approximately 33.2% of the OUE H-REIT Deposited Property. The Property Funds
Appendix (as defined herein) allows OUE H-Trust to borrow up to 35.0% of the OUE H-REIT
Deposited Property (as defined herein) without a credit rating and up to a maximum of 60.0%
of the value of the OUE H-REIT Deposited Property if a credit rating from Fitch Inc., Moodys
or Standard & Poors is obtained and disclosed to the public. The Managers believe that OUE
H-Trust will be able to enjoy flexibility in respect of future capital expenditure or acquisitions.
(5) Strong, reputable and committed Sponsor
(a) Track record as a leading real estate owner, developer and operator
OUE is a diversified real estate owner, developer and operator with a real estate portfolio
located in prime locations in Singapore, and hotels in Singapore, Malaysia, Indonesia and
the PRC. OUE and its subsidiaries, related corporations and associates (the Sponsor
Group) focus their businesses across the hospitality, retail, commercial and residential
property segments. The Sponsor Group operates its hospitality business under the premium
brand names Meritus, Mandarin and Meritus Mandarin, which are known for delivering
quality hospitality services. It develops and holds commercial and retail properties for
investment and rental income purposes while it develops residential properties for sale.
OUE is one of the largest publicly-listed property companies in Singapore with a market
capitalisation of S$2.6 billion as at the Latest Practicable Date, being 28 June 2013.
OUEs Property Highlights
Fair Value
(S$ million) Description
Ownership
(%) Carpark Lots
Mandarin
Orchard
Singapore
1,220.0
(1)
A 37-storey Main Tower and a
39-storey Orchard Wing housing
1,051 rooms located in the heart
of renowned shopping belt,
Orchard Road
100.0 441 (shared
with Mandarin
Gallery)
Crowne Plaza
Changi Airport
291.0
(2)
A 9-storey hotel with 320 rooms,
including 27 suites, directly
connected to Changi Airport
Terminal 3 and within short
distance to Changi Business Park
and Singapore Expo
100.0
Meritus
Mandarin
Haikou
59.5
(2)(3)
A 23-storey hotel with 318 rooms
at Wenhua Road, Longhua
District, Haikou, Hainan Province,
PRC
100.0 128
Meritus
Shantou China
62.5
(2)(4)
A 21-storey tower with 318 rooms
at Jinsha East Road, Shantou,
Guangdong Province, PRC
80.0 248
19
Fair Value
Ownership
(%) Carpark Lots
Mandarin
Gallery
536.0
(1)
Mandarin Gallery is a prime retail
landmark in the heart of Orchard
Road; features six duplexes and
six street front units
100.0 Shared with
Mandarin
Orchard
Singapore
Marina
Mandarin
N.A.
(5)
A 21-storey hotel which is located
directly opposite the Suntec
Singapore International
Convention and Exhibition Centre
30.0
OUE Bayfront
(including OUE
Tower and
OUE Link)
1,081.0
(8)
This 18-storey office development
and adjoining properties offer
views of Marina Bay
100.0 245
One Raffles
Place Tower 1
and Retail
Podium
1,608.8
(6)
(Total fair
value for One
Raffles Place
Tower 1, Tower
2 and Retail
Podium)
A 282 metre-tall office tower
comprising 62 storeys of prime
Grade A office space and a
5-storey retail podium equipped
with one basement level, located
in Singapores CBD
40.8
(7)
288 (shared
with Tower 2)
One Raffles
Place Tower 2
Please see the
fair value in
the row above
A 38-storey commercial building
equipped with one basement level
adjacent to Tower 1
40.8
(7)
Shared with
Tower 1
6 Shenton Way
Towers
One and Two
1,400.0
(2)
49-storey and 37-storey
commercial towers on Shenton
Way, Singapore
100.0 411
Twin Peaks 679.0
(8)
A residential development
comprising two identical 35-storey
blocks situated close to the heart
of Orchard Road
100.0 467
Notes:
(1) Based on independent valuations as at 31 March 2013.
(2) Latest valuation as at 31 December 2012.
(5) The valuation of Marina Mandarin is not public information as it is owned by a private company and the
Sponsor Group only holds a 30.0% effective interest in Marina Mandarin.
(6) Latest valuation for One Raffles Place Tower 1, Tower 2 and Retail Podium as at 31 December 2012.
(7) The Sponsor Group owns a 50.0% stake in OUB Centre Limited, which is a beneficiary and the trustee of the
assets comprising One Raffles Place. OUB Centre Limited was the beneficiary of 81.54% of the trust as of
the date it was declared.
(8) Latest valuation as at 31 March 2013.
20
One of OUEs competitive strengths is the ability to enhance existing assets to create
additional value for its shareholders. A key example is the extensive S$200 million
conversion of the old hotel lobby of Mandarin Orchard Singapore into Mandarin Gallery,
which was completed in 2009 and part of a strategic move for OUE to unlock further value
in its commercial real estate portfolio to maximise shareholder returns.
Makeover of Mandarin Gallery
Before After
The Sponsors commitment to OUE H-Trust is also demonstrated by the Sponsor ROFR,
which provides OUE H-Trust with access to potential future acquisition opportunities which
are primarily used for hospitality and/or hospitality-related purposes. (See Certain
Agreements Relating to OUE H-Trust, OUE H-REIT, OUE H-BT and the Properties Right
of First Refusal Agreement for further details.)
(b) Alignment of the Sponsors and Managers interests with those of Stapled
Securityholders
The Sponsor will immediately following the completion of the Offering, be the largest Stapled
Securityholder, holding an aggregate of 47.9% of the total number of Stapled Securities
expected to be in issue (assuming the Over-Allotment Option is not exercised) or 42.7% of
the total number of Stapled Securities expected to be in issue (assuming the Over-Allotment
Option is exercised in full), to demonstrate the Sponsors commitment to OUE H-Trust.
The Sponsor has also agreed to a lock-up arrangement for such Stapled Securities (the
Lock-up Stapled Securities) during the period commencing from the Listing Date until the
date falling 180 days after the Listing Date.
The Sponsor intends to be a long-term investor in OUE H-Trust given its continued focus on
the hospitality sector. With the Sponsors interest in OUE H-Trust, the fact that the Managers
are wholly-owned subsidiaries of the Sponsor and that 100.0% of the REIT Managers
management fees will be paid in Stapled Securities for the period from the Listing Date to the
end of Projection Year 2014, there will be a substantial alignment of interest for the Sponsor
to support the growth of OUE H-Trust.
21
(6) Experienced Board and management team with proven track record
The board of directors of the REIT Manager (the REIT Manager Board), the board of
directors of the Trustee-Manager (the Trustee-Manager Board, and together with the REIT
Manager Board, the Board of Directors of the Managers) comprise individuals who
collectively have extensive experience in areas including, but not limited to, hospitality, law,
accounting, banking, finance, real estate and fund management. The Board of Directors of
the Managers is also majority independent, with four independent directors out of a total of
six directors, and as such, can be relied upon to act impartially to safeguard the interests of
Stapled Securityholders.
The Managers believe that the Stapled Securityholders will benefit from the experience of
key staff members of the REIT Manager in fund, asset and property management in the
hospitality industry. The management team of the REIT Manager collectively has more than
50 years of experience in real estate, hospitality management and finance management. In
addition, approximately 39.0% and 60.0% of the staff of Mandarin Orchard Singapore and the
Property Manager of Mandarin Gallery have more than 10 years of experience working in
hospitality management and retail management, respectively. OUE H-Trust intends to
leverage such relevant experience and expertise to implement its planned strategies. (See
Management and Corporate Governance for further details.)
KEY STRATEGIES
OUE H-REITs Strategies
The REIT Manager plans to achieve its principal objectives through:
Optimising assets and delivering operational excellence The REIT Manager
intends to leverage its relationship with the Sponsor, who has extensive experience in
the hospitality industry, and work jointly with the Master Lessee, Hotel Manager and
Property Manager, to enhance operational performance to deliver disciplined growth,
and maximise hotel and retail revenues and returns through asset enhancements and
growth opportunities.
Growth through acquisitions The REIT Manager will pursue opportunities that meet
its investment criteria on yield requirements, location, strong fundamentals, organic
growth potential and value-adding opportunities. These opportunities will be supported
by OUE H-REITs relationship with the Sponsor.
Active capital and risk management OUE H-REITs capital funding objectives are
to maintain a strong balance sheet, manage the cost of debt financing, potential
refinancing or repayment risks, secure diversified funding sources and potentially
implement hedging strategies.
(See Strategy Key Strategies OUE H-REITs Strategies for further details.)
22
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24
STRUCTURE OF OUE H-TRUST
The following diagram illustrates the relationship between, among others, OUE H-REIT, OUE
H-BT, the REIT Manager, the REIT Trustee, the Trustee-Manager, the Master Lessee, the Hotel
Manager, the Property Manager and the Stapled Securityholders as at the Listing Date:
Stapled
Securityholders
REIT
Trustee
Master Lessee
REIT
Manager
OUE H-REIT
(owns the Initial
Portfolio)
(6)
OUE H-BT
(3)
Trustee-Manager
Property Manager
Hotel Manager
(9)
OUE H-REIT
Holding of
OUE H-REIT Units
Holding of
OUE H-BT Units OUE H-BT Distributions Distributions
(1)
Stapling
Deed
Management
services
(2)
Acts on behalf of
the holders of the
OUE H-REIT
Units
(5)
Lease of
Mandarin
Orchard
Singapore
(7)
Hotel
management
fees
Operates and
manages
Mandarin
Orchard
Singapore
Fixed Rent +
Variable Rent
(8)
Operates and
manages
Mandarin
Gallery
Acts on behalf of the holders of the
OUE H-BT Units
(4)
Entity which is wholly-owned by the Sponsor.
Property
management
fees
Trustee and
management fee
Management
fee
Trustee fee
Notes:
(1) Distributions (if any) to be made by OUE H-BT, when activated, will be determined by the Trustee-Manager Board
at its sole discretion.
(2) See Management and Corporate Governance OUE H-REIT Fees payable to the REIT Manager Management
fees payable to the REIT Manager for details on the REIT Managers management fees.
(3) Dormant as at the Listing Date.
(4) See Management and Corporate Governance OUE H-BT Fees payable to the Trustee-Manager for details of
the fees payable to the Trustee-Manager for further details.
(5) See The Formation and Structure of OUE H-Trust, OUE H-REIT and OUE H-BT The Formation and Structure of
OUE H-REIT The REIT Trustee Remuneration of the REIT Trustee for further details on the REIT Trustees fee.
(6) The properties of OUE H-REIT are owned directly by OUE H-REIT. As at the Listing Date, OUE H-REIT will hold
Mandarin Orchard Singapore and Mandarin Gallery. (See Certain Agreements Relating to OUE H-Trust, OUE
H-REIT, OUE H-BT and the Properties and The Formation and Structure of OUE H-Trust, OUE H-REIT and OUE
H-BT The Formation and Structure of OUE H-Trust for further details.)
25
(7) As at the Listing Date, the Master Lessor has entered into the Master Lease Agreement with the Master Lessee in
respect of Mandarin Orchard Singapore. (See Certain Agreements Relating to OUE H-Trust, OUE H-REIT, OUE
H-BT and the Properties Master Lease Agreement for further details.)
(8) The Master Lessor will lease the Hotel to the Master Lessee and in return the Master Lessee will pay rent in
accordance with the Master Lease Agreement to the Master Lessor.
(9) The Master Lessee will appoint the Hotel Manager to manage the day-to-day operations and marketing of the Hotel
leased from OUE H-REIT. The Hotel Manager will typically be entitled to a fee payment computed as a percentage
of the revenue and a percentage of the gross operating profit (Gross Operating Profit) of the Hotel, comprising
gross operating revenue (Gross Operating Revenue) less operating expenses under management.
OUE H-Trust
The OUE H-REIT Units and OUE H-BT Units are stapled together under the terms of the Stapling
Deed and cannot be traded separately. OUE H-Trust is regulated by the Stapling Deed, the OUE
H-REIT Trust Deed and the OUE H-BT Trust Deed (collectively, the Deeds) as well as any
legislation and regulations governing OUE H-Trust, OUE H-REIT and OUE H-BT.
OUE H-REIT
OUE H-REIT is constituted by a trust deed dated 10 July 2013 (the OUE H-REIT Trust Deed).
It is principally regulated by the SFA, the Code on Collective Investment Schemes issued by the
MAS (CIS Code), including Appendix 6 of the CIS Code (the Property Funds Appendix), other
relevant regulations as well as the Stapling Deed and the OUE H-REIT Trust Deed.
OUE H-BT
OUE H-BT is constituted by a trust deed dated 10 July 2013 (the OUE H-BT Trust Deed). It is
principally regulated by the SFA, the BTA, and other relevant legislation and regulations, as well
as the Stapling Deed and the OUE H-BT Trust Deed.
As at the Listing Date, OUE H-BT will be dormant. It will, however, become active if any of the
following occurs:
it is appointed by OUE H-REIT, in the absence of any other suitable master lessee(s) as a
master lessee of the Hotel. OUE H-BT will appoint a professional hotel manager to manage
the Hotel. OUE H-BT exists primarily as a master lessee of last resort with regard to the
Hotel so that in the event that a Master Lessee terminating or does not renew the Master
Lease Agreement beyond the initial term and OUE H-REIT is unable to lease the Hotel to
another master lessee for any reason, OUE H-BT will enter into a master lease agreement
for the Hotel on substantially the same terms as the previous Master Lease Agreement;
OUE H-REIT acquires hospitality assets in the future, and, if there are no other suitable
master lessees, OUE H-REIT will lease these acquired hospitality assets to OUE H-BT. OUE
H-BT will then become a master lessee for that hospitality asset and will appoint a
professional manager to manage that acquired hospitality asset; or
it undertakes certain hospitality and hospitality-related development projects, acquisitions
and investments which may not be suitable for OUE H-REIT.
26
OUE H-BT will generally be considered to be active in the event that it carries on business activity
other than:
activities which OUE H-BT is required to carry out under any applicable law, regulation,
the listing rules of the SGX-ST, guidelines, rule or directive of any agency, regulatory or
supervisory body;
the lending to any entities which OUE H-BT owns or to OUE H-REIT or use of the initial
S$20,000 working capital raised from the Offering; or
equity fund-raising activities and issue of new OUE H-BT Units carried out in
conjunction with OUE H-REIT which are solely for the purposes of funding OUE
H-REITs business activities.
The REIT Manager: OUE Hospitality REIT Management Pte. Ltd.
The REIT Manager was incorporated in Singapore under the Companies Act, Chapter 50 of
Singapore (the Companies Act) on 17 April 2013. It has an issued and paid-up capital of
S$1,000,000 and its registered office is located at 333 Orchard Road #33-00, Singapore 238867.
The REIT Manager has been issued a capital markets services licence (CMS Licence) for REIT
management pursuant to the SFA on 2 July 2013.
The REIT Manager is a wholly-owned subsidiary of the Sponsor.
The REIT Manager has general powers of management over the assets of OUE H-REIT. The REIT
Managers main responsibility is to manage OUE H-REITs assets and liabilities for the benefit of
the holders of OUE H-REIT Units. The REIT Manager will set the strategic direction of OUE
H-REIT and give recommendations to the REIT Trustee on the acquisition, divestment,
development and/or enhancement of the assets of OUE H-REIT in accordance with its stated
investment strategy.
(See The Formation and Structure of OUE H-Trust, OUE H-REIT and OUE H-BT for further
details.)
The REIT Trustee: RBC Investor Services Trust Singapore Limited
The trustee of OUE H-REIT is RBC Investor Services Trust Singapore Limited. The REIT Trustee
is a company incorporated in Singapore and registered as a trust company under the Trust
Companies Act 2005, Chapter 336 of Singapore (the Trust Companies Act). It is approved to
act as a trustee for authorised collective investment schemes under Section 289(1) of the SFA. As
at the date of this Prospectus, the REIT Trustee has a paid-up capital of S$6,000,000. The REIT
Trustees registered office is located at 20 Cecil Street, #28-01 Equity Plaza, Singapore 049705.
The REIT Trustee acts as the trustee of OUE H-REIT and, in such capacity, holds the assets of
OUE H-REIT on trust for the benefit of the holders of OUE H-REIT Units, safeguards the rights and
interests of the holders of OUE H-REIT Units and exercises all the powers of a trustee and the
powers accompanying ownership of the properties in OUE H-REIT.
details.)
27
The Trustee-Manager: OUE Hospitality Trust Management Pte. Ltd.
The Trustee-Manager was incorporated in Singapore under the Companies Act on 17 April 2013.
It has an issued and paid-up capital of S$1.00 and its registered office is located at 333 Orchard
Road #33-00, Singapore 238867. The Trustee-Manager is a wholly-owned subsidiary of the
Sponsor.
The Trustee-Manager has the dual responsibilities of safeguarding the interests of the holders of
OUE H-BT Units, and managing the business conducted by OUE H-BT. The Trustee-Manager has
general powers of management over the business and assets of OUE H-BT and its main
responsibility is to manage OUE H-BTs assets and liabilities for the benefit of the holders of OUE
H-BT Units as a whole.
details.)
The Sponsor: Overseas Union Enterprise Limited
OUE is a diversified real estate owner, developer and operator with a real estate portfolio located
in prime locations in Singapore, and hotels in Singapore, Malaysia, Indonesia and the PRC. The
Sponsor Group focuses its business across the hospitality, retail, commercial and residential
property segments. It operates its hospitality business under the brands Meritus, Mandarin and
Meritus Mandarin, which are known for delivering quality hospitality services. It develops and
holds commercial and retail properties for investment and rental income purposes while it
develops residential properties for sale.
capitalisation of S$2.6 billion as at the Latest Practicable Date, being 28 June 2013. OUE has an
experienced management team and established track record of operations dating back to 1964.
As at 31 March 2013, OUEs hospitality businesses include 3,244 hotel rooms operated in
Singapore, Malaysia, Indonesia and the PRC. OUEs substantial size is also evidenced by its
profitability and balance sheet strength, with OUE reporting a total net income of S$90.8 million
for the financial year ended 31 December 2012 and total assets of S$5.9 billion and total
shareholders equity of S$3.2 billion as at 31 December 2012. (See The Sponsor for further
details.)
The Master Lessee (as defined herein)
The Master Lessee of the Hotel is the Sponsor, Overseas Union Enterprise Limited. The Sponsor
was incorporated in Singapore on 8 February 1964 under the Companies Ordinance, (Chapter
174).
On the Listing Date, the Sponsor in its capacity as master lessee, (the Master Lessee) will enter
into a master lease agreement (the Master Lease Agreement) pursuant to which the Master
Lessee will lease and operate Mandarin Orchard Singapore. OUE H-REIT, as the master lessor
of Mandarin Orchard Singapore (the Master Lessor), will receive rental payments for Mandarin
Orchard Singapore from the Master Lessee.
The Master Lease Agreement has an initial term of 15 years with an option for the Master Lessee
to obtain an additional lease for a further term of 15 years on the same terms and conditions, save
for amendments required due to a change in law and without any further option to renew. Such a
long lease term helps to assure a long-term stream of quality rental income for OUE H-REIT so
that it can make stable long-term distributions. On the expiry of the Master Lease Agreement, if
the option to renew is not exercised, OUE H-REIT may, in relation to Mandarin Orchard Singapore,
(which lease is not renewed), enter into a new master lease agreement, on terms to be agreed,
with either the existing Master Lessee or a new master lessee. In the event that OUE H-REIT is
28
unable to appoint a master lessee for Mandarin Orchard Singapore at the expiry of the Master
Lease Agreement, in order to ensure the continued operation and revenue generation of Mandarin
Orchard Singapore, OUE H-REIT will appoint OUE H-BT as the master lessee for Mandarin
Orchard Singapore on substantially the same terms as those of the previous Master Lease
Agreement.
The Master Lessee will appoint a professional hotel manager to manage the day-to-day
operations and marketing of Mandarin Orchard Singapore pursuant to the terms of the Original
Hotel Management Agreement (as defined herein) as supplemented by a supplemental agreement
to be entered into between the Master Lessee and the Hotel Manager on the Listing Date (the
Hotel Management Agreement). Singapore Mandarin International Hotels Pte Ltd (the Hotel
Manager) has agreed to be appointed by the Master Lessee on the Listing Date. The Hotel
Manager is experienced with the day-to-day operations and marketing of Mandarin Orchard
Singapore as it is the current operator of Mandarin Orchard Singapore and has been operating
Mandarin Orchard Singapore under a long-standing hotel management agreement (the Original
Hotel Management Agreement). Its appointment will assure continuity in operations for
Mandarin Orchard Singapore with minimal disruption, which may otherwise be encountered if a
new hotel manager unfamiliar with Mandarin Orchard Singapore was appointed.
Under the Master Lease Agreement, the Master Lessee is responsible for the day-to-day
management and maintenance of the Hotel. (See Certain Agreements Relating to OUE H-Trust,
OUE H-REIT, OUE H-BT and the Properties Master Lease Agreement for further details.)
The Hotel Manager
The Hotel Manager of the Hotel is Singapore Mandarin International Hotels Pte Ltd. It was
incorporated in Singapore on 14 December 1978 under the Companies Act and is a wholly-owned
subsidiary of Meritus International Pte. Ltd (MIPL), which is in turn wholly-owned by the Sponsor.
The Hotel Manager will be engaged by the Master Lessee under the Hotel Management
Agreement and will provide, among others, the following services for the Hotel:
(i) Hotel management services such as the daily running and managing of the Hotel and its
related activities (e.g. procurement, F&B outlets, laundry, etc.);
(ii) Marketing services, including the planning, preparation and conduct of marketing,
advertising, promotion, sales, public relations, publicity and related activities for the purpose
of promoting the reputation and business of the Hotel;
(iii) Development of programmes and policies to maximise patronage of the Hotels facilities;
(iv) Collecting charges, rents and other amounts due from hotel guests, patrons and tenants;
(v) Employ, supervise and train hotel employees and staff, in accordance with the annual budget
agreed with the Master Lessee;
(vi) Establish the details of the hotel refurbishment plans for the Hotel, in consultation with the
Master Lessee;
(vii) Purchase all furniture, fixtures and equipment (FF&E) for the Hotel in accordance with
capital refurbishment programmes or the approved annual budget for the Hotel;
(viii) Establish the cash management and banking arrangements for the Hotel; and
(ix) Establish the Hotels policies regarding their association with any credit card system.
29
The Property Manager
The property manager of Mandarin Gallery and the Excluded Commercial Premises (as defined
herein) is OUE Property Management Pte. Ltd. (the Property Manager).
The Property Manager, OUE Property Management Pte. Ltd., was incorporated in Singapore on
20 November 2012 under the Companies Act and is a wholly-owned subsidiary of the Sponsor.
Mandarin Gallery will not be subject to any master lease arrangement upon its acquisition by OUE
H-REIT. Individual retail units within Mandarin Gallery will be leased out to individual tenants
directly, and existing leases as at the Listing Date will be assigned and/or novated to the REIT
Trustee on or prior to the Listing Date. Property management, lease management and marketing
activities at Mandarin Gallery will be the responsibility of the Property Manager, which may decide,
at its discretion, whether to carry out these tasks by itself or to delegate any or all of them to a third
party. Any fees or commissions payable to the Property Manager will be borne by OUE H-REIT.
Under the property management agreement to be entered into between the REIT Trustee, the
REIT Manager and the Property Manager (the Individual Property Management Agreement)
the Property Manager is, subject to the overall management and supervision of the REIT Manager,
responsible for providing property management, lease management and marketing services for
Mandarin Gallery and the Excluded Commercial Premises.
Certain Fees and Charges
The following is a summary of the amounts of certain fees and charges payable by the Stapled
Securityholders in connection with the subscription for the Stapled Securities (so long as the
Stapled Securities are listed):
Payable by the Stapled Securityholders
directly
Amount payable
(a) Subscription fee or preliminary charge N.A.
(1)
(b) Realisation fee N.A.
(1)
(c) Switching fee N.A.
(1)
(d) Any other fee Investors in the Placement Tranche and
Cornerstone Investors may be required to
pay brokerage of up to 1.0% of the Offering
Price. For trading of the Stapled Securities,
investors will pay prevailing brokerage
commissions (if applicable) and CDP (as
defined herein) clearing fee for trading of
the Stapled Securities on the SGX-ST at
the rate of 0.04% of the transaction value,
subject to a maximum of S$600.00 per
transaction and Goods and Services Tax
(GST) chargeable thereon.
Note:
(1) As the Stapled Securities will be listed and traded on the SGX-ST, Stapled Securityholders will have no right to
request the REIT Manager or the Trustee-Manager to redeem their Stapled Securities while the Stapled Securities
are listed. No subscription fee, preliminary charge, realisation fee or switching fee is payable in respect of the
Stapled Securities.
30
The following is a summary of certain fees and charges payable by OUE H-REIT in connection
with the establishment and on-going management of the operations of OUE H-REIT (See
Management and Corporate Governance for further details):
Payable by OUE H-REIT Amount payable
(a) The REIT Managers management fees Base Fee
0.3% per annum of the value of the gross
assets of OUE H-REIT, including all the
Authorised Investments (as defined in the OUE
H-REIT Trust Deed and the Stapling Deed) of
OUE H-REIT for the time being held or deemed
to be held by OUE H-REIT under the OUE
H-REIT Trust Deed (OUE H-REIT Deposited
Property).
Performance Fee
4.0% per annum of the Net Property Income of
OUE H-REIT in the relevant financial year
(calculated before accounting for the
Performance Fee in that financial year) or
distribution period.
100.0% of the Base Fee and the Performance
Fee will be paid in Stapled Securities for the
period from the Listing Date to the end of
Projection Year 2014, and thereafter at the
discretion of the REIT Manager.
For the purpose of calculating the Base Fee
and the Performance Fee, if OUE H-REIT
holds only a partial interest in any of the OUE
H-REIT Deposited Property, or any investment
from which any Net Property Income of OUE
H-REIT is derived, such OUE H-REIT
Deposited Property or Net Property Income
shall be pro-rated in proportion to the partial
interest held.
(b) The REIT Trustees fee A maximum of 0.1% per annum of the value of
the OUE H-REIT Deposited Property,
excluding out-of-pocket expenses and GST.
The actual fee payable will be determined
between the REIT Manager and REIT Trustee
from time to time. The REIT Trustees fees are
presently charged at a flat fee of 0.015% per
annum of the value of the OUE H-REIT
Deposited Property for the first 12 months
(commencing from the date of inception of
OUE H-REIT), and subsequently on a scaled
basis of up to 0.02% per annum of the value of
the OUE H-REIT Deposited Property if the
value of the OUE H-REIT Deposited Property
is at least S$1 billion, subject to a minimum of
S$20,000 per month, excluding out-of-pocket
expenses and GST.
31
The fees are accrued and paid monthly in
arrears in accordance with the Trust Deed.
OUE H-REIT will also pay the REIT Trustee a
one-time inception fee of S$20,000.
Under the OUE H-REIT Trust Deed, the
maximum fee which the REIT Trustee may
charge is 0.1% per annum of the value of the
OUE H-REIT Deposited Property. Any increase
in the REIT Trustees fee beyond the current
0.015% per annum of the value of the OUE
H-REIT Deposited Property for the first 12
months and the subsequent scaled basis but
subject to the maximum permitted amount of
up to 0.1% per annum of the value of the OUE
H-REIT Deposited Property will be subject to
agreement between the REIT Manager and the
REIT Trustee.
Any increase in the maximum permitted
amount or any change in the structure of the
REIT Trustees fee must be approved by an
Extraordinary Resolution
(1)
at a meeting of
holders of the OUE H-REIT Units duly
convened and held in accordance with the
provisions of the OUE H-REIT Trust Deed.
Note:
(1) Extraordinary Resolution means a resolution
proposed and passed as such by a majority
consisting of 75.0% or more of the total number of
votes cast for and against such resolution of a
meeting of the holders of OUE H-REIT Units or
OUE H-BT Units (as the case may be) duly
convened and held.
(c) Any other substantial fee or charge
(i.e. 0.1% or more of the value of the OUE
H-REIT Deposited Property)
(i) Acquisition fee
(1)
(payable to the REIT Manager)
0.75% for acquisitions from Related Parties
(2)
and 1.0% for all other cases (or such lower
percentage as may be determined by the REIT
Manager in its absolute discretion) of any of
the following as is applicable (subject to there
being no double-counting):
(i) the acquisition price of any real estate
purchased by OUE H-REIT, whether
directly or indirectly through one or more
special purpose vehicles (SPVs), plus
any other payments
(3)
in connection with
the purchase of the real estate (pro-
rated if applicable to the proportion of
OUE H-REITs interest);
32
(ii) the underlying value
(4)
of any real estate
which is taken into account when
computing the acquisition price payable
for the equity interests of any vehicle
holding directly or indirectly the real
estate, purchased whether directly or
indirectly through one or more SPVs, by
OUE H-REIT (pro-rated if applicable to the
proportion of OUE H-REITs interest); or
(iii) the acquisition price of any investment
purchased by OUE H-REIT, whether
SPVs, in any debt securities of any
property corporation or other SPV
owning or acquiring real estate or any
debt securities which are secured
whether directly or indirectly by the
rental income from real estate.
The acquisition fee is payable to the REIT
Manager or to any person which the REIT
Manager may designate or nominate in the form
of cash and/or Stapled Securities or as the case
may be, OUE H-REIT Units (where Unstapling
has taken place) (as the REIT Manager may
elect) in such proportions as may be determined
by the REIT Manager provided that in respect of
any acquisition of real estate assets by OUE
H-REIT from Related Parties, such a fee should
be in the form of Stapled Securities at prevailing
market price(s) instead of cash. Such Stapled
Securities should not be sold within one year
from the date of their issuance. No acquisition
fee is payable for the acquisition of the Initial
Portfolio.
Notes:
(1) No acquisition fee is payable for the transfer of
assets from OUE H-BT.
(2) Related Party refers to an interested person as
defined in the Listing Manual and/or, as the case
may be, an interested party as defined in the
Property Funds Appendix.
(3) other payments refer to additional payments to
the vendor of the real estate, for example, where
the vendor has already made certain payments for
enhancements to the real estate, and the value of
the asset enhancements is not reflected in the
acquisition price as the asset enhancements are
not completed, but does not include stamp duty or
other payments to third party agents and brokers.
(4) For example, if OUE H-REIT acquires a special
purpose company which holds real estate, such
underlying value would be the value of the real
estate derived from the amount of equity paid by
OUE H-REIT as the purchase price and any debt of
the special purpose company.
33
(ii) Divestment fee
(1)
0.5%
(2)
of any of the following as is applicable
(subject to there being no double-counting):
(i) the sale price of any real estate sold or
divested by OUE H-REIT, whether directly
or indirectly through one or more SPVs,
plus any other payments
(3)
in connection
with the sale or divestment of the real
estate (pro-rated if applicable to the
proportion of OUE H-REITs interest);
(4)
of any real estate
which is taken into account when
computing the sale price for the equity
interests in any vehicle holding directly
or indirectly the real estate, sold or
divested, whether directly or indirectly
through one or more SPVs, by OUE
H-REIT (pro-rated if applicable to the
proportion of OUE H-REITs interest); or
(iii) the sale price of the investment sold or
divested by OUE H-REIT, whether
SPVs, in any debt securities of any
property corporation or other SPV
The divestment fee is payable to the REIT
Manager in the form of cash and/or Stapled
Securities or as the case may be, OUE H-REIT
Units where Unstapling has taken place (as the
REIT Manager may elect) provided that in
respect of any sale or divestment of real estate
assets to Interested Parties, such a fee should
be in the form of Stapled Securities at prevailing
market price(s) instead of cash.
Notes:
(1) No divestment fee is payable for the transfer of
assets to OUE H-BT.
(2) There will not be two-tiers of divestment fees
payable. The divestment fees payable by OUE
H-REIT will be 0.5% regardless of whether the
divestment of assets by OUE H-REIT is to a
Related Party or otherwise.
(3) other payments refer to additional payments to
OUE H-REIT or its SPVs for the sale of the real
estate, for example, where OUE H-REIT or its SPVs
have already made certain payments for
enhancements to the real estate, and the value of the
asset enhancements are not reflected in the sale
price as the asset enhancements are not completed,
but other payments do not include stamp duty or
other payments to third party agents and brokers.
34
(4) For example, if OUE H-REIT sells or divests a
special purpose company which holds real estate,
such underlying value would be the value of the
real estate derived from the amount of equity
received by OUE H-REIT as sale price and any
debt of the special purpose company.
(iii) Development management fee
(1)
The REIT Manager is entitled to receive
development management fees equivalent to
3.0% of the Total Project Costs incurred in a
Development Project (each as defined herein)
undertaken by the REIT Manager on behalf of
OUE H-REIT. OUE H-REIT will only undertake
development activities within the limits of the
Property Funds Appendix (which currently
allows a REIT to commit no more than 10.0%
of its deposited property to property
development activities and investments in
uncompleted property developments).
Development Project, in relation to OUE
H-REIT, means a project involving the
development of land, or buildings, or part(s)
thereof on land which is acquired, held or
leased by OUE H-REIT, including major
development, re-development, refurbishment,
retrofitting, addition and alteration and
renovations works, provided always that the
Property Funds Appendix shall be complied
with for the purposes of such development.
When the estimated Total Project Costs are
greater than S$100.0 million, the REIT Trustee
and the REIT Managers independent directors
will first review and approve the quantum of the
development management fee, whereupon the
REIT Manager may be directed to reduce the
development management fee. Further, in
cases where the market pricing for comparable
services is, in the REIT Managers view,
materially lower than the development
management fee, the REIT Manager will have
the discretion to accept a development
management fee which is less than 3.0% of the
Total Project Costs incurred in a Development
Project undertaken by the REIT Manager on
behalf of OUE H-REIT.
For the avoidance of doubt, in respect of the
same Development Project, the REIT Manager
will not be entitled to concurrently receive both
the Development Management Fee as well as
the Acquisition Fee.
35
Note:
(1) The services that the REIT Manager may provide in
relation to the development management fee would
include the provision of services (a) from the design
(pre-construction) phase, such as working with the
relevant consultants in respect of the design and to
finalise the details in respect of the work to be
carried out, (b) to the construction phase, such as
monitoring the performance of the contractors,
consultants and other service providers in respect of
the delivery of the project and (c) up to the
completion phase, such as supervising and
assisting in the finalisation of accounts with the
quantity surveyors and other consultants.
(iv) Property management fee in
relation to Mandarin Gallery and the
Excluded Commercial Premises
(payable to the Property Manager)
The Property Manager is entitled to the
following property management fee for
Mandarin Gallery and the Excluded
Commercial Premises which comprises the
following:
(i) 2.0% per annum of Gross Revenue;
(ii) 2.0% per annum of the net property
income for Mandarin Gallery and the
property management fee in that
financial period); and
(iii) 0.5% per annum of the net property
income for Mandarin Gallery and the
property management fee in that
financial period) in lieu of leasing
commissions otherwise payable to the
Property Manager and/or third party
agents
(1)
.
Note:
(1) The Property Manager will bear the leasing
commission payable to third parties as it receives
0.5% per annum of the net property income for the
relevant property in lieu of leasing commissions
otherwise payable to the Property Manager and/or
third party agents. All the other fees and/or
commissions payable to third parties arising from
rendering services to Mandarin Gallery and the
Excluded Commercial Premises will be borne by
OUE H-REIT with the prior approval of the REIT
Manager and REIT Trustee.
36
The Trustee-Manager will not receive any fees while it remains dormant. The following is a
summary of certain fees and charges payable by OUE H-BT in the event OUE H-BT becomes
active (See Management and Corporate Governance for further details):
Payable by OUE H-BT Amount payable
(a) The Trustee-Managers management fees 10.0% of the profit of OUE H-BT before
interest and tax in the relevant financial year
(calculated before accounting for this
management fee in that financial year)
payable in the event that OUE H-BT becomes
active. For the purpose of calculating the
management fee, if OUE H-BT holds only a
partial interest in an investment from which
such profit is derived, such profit shall be
pro-rated in proportion to the partial interest
held.
The management fee is payable to the
Trustee-Manager or to any person which the
Trustee-Manager may designate or nominate
in the form of cash and/or Stapled Securities
or, as the case may be, OUE H-BT Units
(where Unstapling has taken place) (as the
Trustee-Manager may elect).
(b) The Trustee-Managers trustee fee 0.1% per annum of the value of the Trust
Property (as defined in the BTA) of OUE
H-BT (the OUE H-BT Trust Property),
provided that the value of the OUE H-BT
Trust Property is at least S$50.0 million.
For the purpose of calculating the trustee
fee, if OUE H-BT holds only a partial
interest in any of the OUE H-BT Deposited
Property, such OUE H-BT Deposited
Property shall be pro-rated in proportion to
the partial interest held.
(c) Any other substantial fee or charge
(i.e. 0.1% or more of the value of the OUE
H-BT Deposited Property)
(i) Acquisition fee
(1)
(payable to the Trustee-Manager)
0.75% for acquisitions from Related Parties
and 1.0% for all other cases (or such lower
percentage as may be determined by the
Trustee-Manager in its absolute discretion)
of any of the following as is applicable
(subject to there being no double-counting):
(i) the acquisition price of any real estate
purchased by OUE H-BT, whether
directly or indirectly through one or
more SPVs, plus any other
payments
(2)
in addition to the
acquisition price made by OUE H-BT
or its SPVs to the vendor in connection
with the purchase of the real estate
(pro-rated if applicable to the
proportion of OUE H-BTs interest);
37
(3)
of any real
estate which is taken into account
when computing the acquisition price
payable for the equity interests of any
vehicle holding directly or indirectly
the real estate, purchased whether
more SPVs, by OUE H-BT (pro-rated if
applicable to the proportion of OUE
H-BTs interest); or
(iii) the acquisition price of any investment
purchased by OUE H-BT, whether
more SPVs, in any debt securities of
any property corporation or other SPV
The acquisition fee is payable to the
Trustee-Manager or to any person which
the Trustee-Manager may designate or
nominate in the form of cash and/or Stapled
Securities or, as the case may be, OUE
H-BT Units (where Unstapling has taken
place) as the Trustee-Manager may elect,
and in such proportion as may be
determined by the Trustee-Manager.
Notes:
(1) No acquisition fee is payable for transfer of
assets from OUE H-REIT.
(2) other payments refer to additional payments
to the vendor of the real estate, for example,
where the vendor has already made certain
payments for enhancements to the real estate,
and the value of the asset enhancements is not
reflected in the acquisition price as the asset
enhancements are not completed, but other
payments do not include stamp duty or other
payments to third party agents and brokers.
(3) For example, if OUE H-BT acquires a special
purpose company which holds real estate, such
underlying value would be the value of the real
estate derived from the amount of equity paid by
OUE H-BT as purchase price and any debt of the
special purpose company.
38
(ii) Divestment fee
(1)
0.5%
(2)
of any of the following as is
applicable (subject to there being no
double-counting):
(i) the sale price of any real estate sold or
divested by OUE H-BT, whether
more SPVs, plus any other
payments
(3)
in connection with the
sale or divestment of the real estate
(pro-rated if applicable to the
proportion of OUE H-BTs interest);
(4)
of any real
estate which is taken into account
when computing the sale price for the
equity interests in any vehicle holding
directly or indirectly the real estate,
sold or divested, whether directly or
indirectly through one or more SPVs,
by OUE H-BT (pro-rated if applicable
to the proportion of OUE H-BTs
interest); or
(iii) the sale price of the investment sold or
divested by OUE H-BT, whether
more SPVs, in any debt securities of
any property corporation or other SPV
The divestment fee is payable to the Trustee-
Manager or to any person which the Trustee-
Manager may designate or nominate in the
form of cash and/or Stapled Securities, or as
the case may be, OUE H-BT Units (where
Unstapling has taken place) (as the Trustee-
Manager may elect).
Notes:
(1) No divestment fee is payable for the transfer of
assets to OUE H-REIT.
(2) There will not be two-tiers of divestment fees
payable. The divestment fees payable by OUE
H-BT will be 0.5% regardless of whether the
divestment of assets by OUE H-BT is to a
Related Party or otherwise.
(3) other payments refer to additional payments
to OUE H-BT or its SPVs for the sale of the real
estate, for example, where OUE H-BT or its
SPVs have already made certain payments for
enhancements to the real estate, and the value
of the asset enhancements are not reflected in
the sale price as the asset enhancements are
not completed, but other payments do not
include stamp duty or other payments to third
party agents and brokers.
39
(4) For example, if OUE H-BT sells or divests a
special purpose company which holds real
estate, such underlying value would be the value
of the real estate derived from the amount of
equity received by OUE H-BT as sale price and
any debt of the special purpose company.
(iii) Development management fee
(1)
The Trustee-Manager is entitled to receive
development management fees equivalent
to 3.0% of the Total Project Costs incurred
in a Development Project (as defined
herein) undertaken by the Trustee-Manager
on behalf of OUE H-BT.
Development Project, in relation to OUE
H-BT, means a project involving the
development of land, or buildings, or part(s)
thereof on land which is acquired, held or
leased by OUE H-BT, including major
development, re-development, refurbishment,
retrofitting, addition and alteration and
renovations works.
When the estimated Total Project Costs are
greater than S$100.0 million, the Trustee-
Managers independent directors will first
review and approve the quantum of the
development management fee, whereupon
the Trustee-Manager may be directed to
reduce the development management fee.
Further, in cases where the market pricing
for comparable services is, in the Trustee-
Managers view, materially lower than the
development management fee, the Trustee-
Manager will have the discretion to accept a
development management fee which is less
than 3.0% of the Total Project Costs
incurred in a Development Project
undertaken by the Trustee-Manager on
behalf of OUE H-BT.
40
For the avoidance of doubt, in respect of the
same Development Project, the Trustee-
Manager will not be entitled to concurrently
receive both the Development Management
Fee as well as the Acquisition Fee.
Note:
(1) The services that the Trustee-Manager may
provide in relation to the development
management fee would include the provision of
services (a) from the design (pre-construction)
phase, such as working with the relevant
consultants in respect of the design and to
finalise the details in respect of the work to be
carried out, (b) to the construction phase, such
as monitoring the performance of the
contractors, consultants and other service
providers in respect of the delivery of the project
and (c) up to the completion phase, such as
supervising and assisting in the finalisation of
accounts with the quantity surveyors and other
consultants.
41
THE OFFERING
OUE H-Trust OUE Hospitality Trust, a stapled group comprising OUE
H-REIT and OUE H-BT.
OUE H-REIT OUE Hospitality Real Estate Investment Trust, a REIT
constituted by the OUE H-REIT Trust Deed.
OUE H-BT OUE Hospitality Business Trust, a business trust constituted
by the OUE H-BT Trust Deed.
The REIT Manager OUE Hospitality REIT Management Pte. Ltd.
The REIT Trustee RBC Investor Services Trust Singapore Limited.
The Trustee-Manager OUE Hospitality Trust Management Pte. Ltd.
The Property Manager OUE Property Management Pte. Ltd.
The Sponsor Overseas Union Enterprise Limited.
Stapled Securities Stapled Securities of OUE H-Trust, each consisting of one
OUE H-REIT Unit and one OUE H-BT Unit. The units are
stapled together such that the units cannot be issued,
transferred, traded, or otherwise dealt with separately.
The Offering 434,598,000 Stapled Securities offered under the Placement
Tranche and the Public Offer, subject to the Over-Allotment
Option.
The Placement Tranche 383,462,000 Stapled Securities offered by way of an
international placement to investors, including institutional
and other investors in Singapore other than Cornerstone
Investors, pursuant to the Offering.
The Stapled Securities have not been and will not be
registered under the Securities Act and, subject to certain
exceptions, may not be offered or sold within the United
States (as defined in Regulation S). The Stapled Securities
are being offered and sold outside the United States in
reliance on Regulation S.
The Public Offer 51,136,000 Stapled Securities offered by way of a public offer
in Singapore.
Consideration Stapled
Securities
Concurrent but separate from the Offering, the Sponsor, will
receive 626,781,999 Consideration Stapled Securities on the
Listing Date in part satisfaction of the purchase price for the
Initial Portfolio.
42
Cornerstone Stapled
Securities
Concurrently with, but separate from the Offering, each of
Credit Suisse AG, Goldhill, Mr Gordon Tang, Lucille Holdings
Pte Ltd and Splendid Asia Macro Fund (the Cornerstone
Investors) has entered into a subscription agreement to
subscribe for an aggregate of 247,220,000 Stapled Securities
at the Offering Price conditional upon the Underwriting
Agreement having been entered into, and not having been
terminated, pursuant to its terms on or prior to the date on
which the Stapled Securities are issued as settlement under
the Offering (the Settlement Date).
(See Ownership of the Stapled Securities Subscription of
the Cornerstone Investors Information on the Cornerstone
Investors for further details.)
Offering Price S$0.88 per Stapled Security.
Clawback and Re-allocation The Stapled Securities may be re-allocated between the
Placement Tranche and the Public Offer at the discretion of
the Joint Bookrunners (in consultation with the Managers) in
the event of an excess of applications in one and a deficit in
the other.
Subscription for Stapled
Securities in the Public Offer
Prospective investors applying for the Stapled Securities by
way of Application Forms or Electronic Applications (both as
referred to in Appendix G, Terms, Conditions and Procedures
for Application for and Acceptance of the Stapled Securities in
Singapore) in the Public Offer will pay the Offering Price on
application, subject to a refund of the full amount or, as the
case may be, the balance of the application monies (in each
case, without interest or any share of revenue or other benefit
arising therefrom) where
an application is rejected or accepted in part only, or
the Offering does not proceed for any reason.
For the purpose of illustration, an investor who applies for
1,000 Stapled Securities by way of an Application Form or an
Electronic Application under the Public Offer will have to pay
S$880, which is subject to a refund of the full amount or, as
the case may be, the balance thereof (in each case, without
interest or any share of revenue or other benefit arising
therefrom), upon the occurrence of any of the foregoing
events.
The minimum initial subscription is for 1,000 Stapled
Securities. An applicant may subscribe for a larger number of
the Stapled Securities in integral multiples of 1,000.
43
Investors in Singapore must follow the application procedures
set out in Appendix G, Terms, Conditions and Procedures for
Application for and Acceptance of the Stapled Securities in
Singapore. Subscriptions under the Public Offer must be
paid for in Singapore dollars. No fee is payable by applicants
for the Stapled Securities, save for an administration fee for
each application made through automated teller machines
(ATMs) and the internet banking websites of the
Participating Banks (as defined herein).
The Stapled Security Lender The Sponsor.
Over-Allotment Option In connection with the Offering, the Joint Bookrunners have
been granted the Over-Allotment Option by the Stapled
Security Lender. The Over-Allotment Option is exercisable by
the Stabilising Manager (or any of its affiliates or other
persons acting on behalf of the Stabilising Manager), in
consultation with the other Joint Bookrunners, in full or in part,
on one or more occasions, only from the Listing Date but no
later than the earlier of (i) the date falling 30 days from the
Listing Date; or (ii) the date when the Stabilising Manager (or
any of its affiliates or other persons acting on behalf of the
Stabilising Manager) has bought, on the SGX-ST, an
aggregate of 68,182,000 Stapled Securities, representing not
more than 15.7% of the total number of Stapled Securities in
the Offering, to undertake stabilising actions. Unless
indicated otherwise, all information in this document assumes
that the Joint Bookrunners do not exercise the Over-Allotment
Option. (See Plan of Distribution Over-Allotment and
Stabilisation for further details.)
The total number of Stapled Securities in issue immediately
after the close of the Offering will be 1,308,600,000 Stapled
Securities. The exercise of the Over-Allotment Option will not
increase this total number of Stapled Securities in issue.
Lock-ups The Sponsor has entered into certain lock-up arrangements
with the Joint Bookrunners in respect of 100.0% of its
effective interests in the Stapled Securities during the lock-up
period, which commences from the Listing Date until the date
falling 180 days after the Listing Date (both dates inclusive)
(the Lock-up Period), subject to certain exceptions.
The Managers have also entered into a lock-up arrangement
with the Joint Bookrunners in respect of any offer, issue or
contract to issue any Stapled Securities, and the making of
any announcements in connection with any of the foregoing
transactions during the period which commences from the
Listing Date until the date falling 180 days after the Listing
Date (both dates inclusive), subject to certain exceptions.
(See Plan of Distribution Lock-up Arrangements for further
details.)
44
Capitalisation of OUE H-Trust S$1,738,568,000 (based on the Offering Price). (See
Capitalisation and Indebtedness for further details.)
Use of Proceeds See Use of Proceeds and Certain Agreements Relating to
OUE H-Trust, OUE H-REIT, OUE H-BT and the Properties for
further details.
Listing and Trading Prior to the Offering, there has been no market for the Stapled
Securities. Application has been made to the SGX-ST for
permission to list on the Main Board of the SGX-ST:
all the Stapled Securities comprised in the Offering;
all the Sponsor Stapled Securities;
all the Cornerstone Stapled Securities; and
all of the Stapled Securities which may be issued to the
Managers from time to time in full or part payment of
fees payable to the Managers. (See Management and
Corporate Governance OUE H-REIT Fees Payable
to the REIT Manager and Management and Corporate
Governance OUE H-BT Fees Payable to the
Trustee-Manager for further details.)
Such permission will be granted when OUE H-Trust is
admitted to the Official List of the SGX-ST. Listing and trading
of the Stapled Securities is expected to commence on 25 July
2013.
The Stapled Securities will, upon their issue, listing and
quotation on the SGX-ST, be traded in Singapore dollars
under the book-entry (scripless) settlement system of The
Central Depository (Pte) Limited (CDP). The Stapled
Securities will be traded in board lot sizes of 1,000 Stapled
Securities.
Stabilisation In connection with the Offering, the Stabilising Manager (or
any of its affiliates or other persons acting on behalf of the
Stabilising Manager) may, in consultation with the Joint
Bookrunners and at its discretion, over-allot or effect
transactions which stabilise or maintain the market price of
the Stapled Securities at levels that might not otherwise
prevail in the open market. However, there is no assurance
that the Stabilising Manager (or any of its affiliates or other
persons acting on behalf of the Stabilising Manager) will
undertake stabilising action.
45
Such transactions may be effected on the SGX-ST and in
other jurisdictions where it is permissible to do so, in each
case in compliance with all applicable laws and regulations
(including the SFA and any regulations thereunder). Such
transactions may commence on or after the Listing Date, and,
if commenced, may be discontinued at any time and shall not
be effected after the earlier of (i) the date falling 30 days from
the Listing Date; or (ii) the date when the Stabilising Manager
(or any of its affiliates or other persons acting on behalf of the
Stabilising Manager) has bought, on the SGX-ST, an
aggregate of 68,182,000 Stapled Securities, representing not
more than 15.7% of the total number of Stapled Securities in
the Offering, to undertake stabilising actions.
(See Plan of Distribution Over-Allotment and Stabilisation
for further details.)
No Redemption Stapled Securityholders have no right to request the REIT
Manager or the Trustee-Manager to redeem their Stapled
Securities while the Stapled Securities are listed on the
SGX-ST. It is intended that Stapled Securityholders may only
deal in their listed Stapled Securities through trading on the
SGX-ST. Listing of the Stapled Securities on the SGX-ST
does not guarantee a liquid market for the Stapled Securities.
Distribution Policy Distributions from OUE H-Trust comprise distributions from
OUE H-REIT and OUE H-BT, if any. Distributions from OUE
H-REIT are computed based on 100.0% of the OUE H-REITs
Taxable Income for Forecast Period 2013 and Projection Year
2014 and at least 90.0% of its Taxable Income thereafter on
a quarterly basis to the Stapled Securityholders, except for
the first distribution, which will be in respect of the period from
the Listing Date to 31 December 2013 and will be paid by the
REIT Manager on or before 31 March 2014. Subsequent
distributions will be made on a quarterly basis for the periods
ending 31 March, 30 June, 30 September and 31 December.
Distributions, when paid, will be in Singapore dollars. (See
Distributions for further details.)
OUE H-BT will be dormant as at the Listing Date and no
distributions will be made during the period that OUE H-BT
remains dormant. It is assumed that OUE H-BT will have no
revenue for Forecast Period 2013 and Projection Year 2014.
In the event that OUE H-BT becomes active and profitable,
the declaration and payment of distributions by OUE H-BT will
be at the sole discretion of the Trustee-Manager Board. There
is no assurance that OUE H-BT will make any distributions to
the Stapled Securityholders.
46
Tax Considerations Distributions by OUE H-REIT
Individuals and Qualifying Stapled Securityholders (as
defined herein) receiving distributions made out of OUE
H-REITs Taxable Income will receive these distributions
without tax deduction at source (i.e. Taxable Income is given
tax transparency treatment).
The tax transparency treatment will not apply to distributions
made out of OUE H-REITs Retained Taxable Income (as
defined herein) and gains arising from the sale of properties
determined by the Inland Revenue Authority of Singapore
(IRAS) to be revenue in nature. Such income (other than
capital gains arising from the sale of properties) will be taxed
at OUE H-REITs level.
Distributions made out of Taxable Income to Stapled
Securityholders who are individuals are generally exempt
from Singapore income tax regardless of the individuals
nationality or tax residence status.
Distributions made up to 31 March 2015 and out of Taxable
Income to Stapled Securityholders who are foreign non-
individual investors will be subject to Singapore withholding
tax at the reduced rate of 10.0%. The withholding tax is
generally a final tax and the holders who do not have a
permanent establishment in Singapore do not need to pay
any further Singapore income tax on the distributions.
Distributions made out of Taxable Income to all other non-
individual Stapled Securityholders will be subject to income
tax on the gross amount of such distributions, regardless of
whether OUE H-REIT had deducted tax from the distributions.
Where applicable, the Stapled Securityholders may claim a
tax credit for the tax deducted at source as a set-off against
their Singapore income tax liabilities.
Distributions by OUE H-BT
OUE H-BT will be assessed to Singapore income tax on its
profits, if any, derived from or accrued in Singapore.
Any distributions made by OUE H-BT out of its after tax profits
to the Stapled Securityholders will be exempt from Singapore
income tax in the hands of the Stapled Securityholders,
regardless of whether they are individual or non-individual
(See Taxation and Appendix F, Independent Taxation
Report for further information on the Singapore income tax
consequences of the purchase, ownership and disposition of
the Stapled Securities.)
47
Governing Law The Stapling Deed, the OUE H-REIT Trust Deed and the OUE
H-BT Trust Deed, pursuant to which OUE H-Trust, OUE
H-REIT and OUE H-BT are respectively constituted, are
governed by Singapore law.
Unstapling OUE H-Trust can be terminated when stapling becomes
unlawful or prohibited by the listing manual of the SGX-ST
(the Listing Manual), or when either OUE H-REIT or OUE
H-BT is terminated or wound up respectively. Unstapling (as
defined herein) can also occur if Extraordinary Resolutions
from the holders of OUE H-REIT Units and the holders of OUE
H-BT Units are obtained.
Termination OUE H-REIT may, under certain circumstances specified in
the OUE H-REIT Trust Deed, be terminated by either the
REIT Manager or the REIT Trustee. For example, the REIT
Manager may terminate OUE H-REIT if, at any time, it is
delisted permanently from the SGX-ST. (See The Formation
and Structure of OUE H-Trust, OUE H-REIT and OUE H-BT
OUE H-REIT Termination of OUE H-REIT for further
details.)
OUE H-BT may, under certain circumstances specified in the
OUE H-BT Trust Deed, be wound up by the Trustee-Manager.
(See The Formation and Structure of OUE H-Trust, OUE
H-REIT and OUE H-BT OUE H-BT Termination of OUE
H-BT for further details.)
Underwriting, Selling and
Management Commission
Payable by OUE H-Trust to the
Joint Bookrunners
The REIT Manager, on behalf of OUE H-REIT, and the
Trustee-Manager, on behalf of OUE H-BT, have agreed to pay
the Joint Bookrunners for their services in connection with the
offering of the Stapled Securities under the Offering and the
Cornerstone Stapled Securities, an underwriting, selling and
management commission (the Underwriting, Selling and
Management Commission) (including incentive fees) of up
to S$18.0 million excluding GST (based on the Offering
Price). (See Use of Proceeds Issue Expenses for further
details.)
Risk Factors Prospective investors should carefully consider certain
risks connected with an investment in the Stapled
Securities, as discussed under Risk Factors.
48
INDICATIVE TIMETABLE
An indicative timetable for trading in the Stapled Securities is set out below for the reference of
applicants for the Stapled Securities:
Indicative date and time Event
18 July 2013, 6.00 p.m. Opening date and time for the Public Offer.
23 July 2013, 12.00 p.m. Closing date and time for the Public Offer.
24 July 2013 Balloting of applications or otherwise as may be approved by the
SGX-ST (in the event of over-subscription for the Stapled
Securities) under the Public Offer. Commence returning or
refunding of application monies to unsuccessful or partially
successful applicants.
25 July 2013, at or before
2.00 p.m.
Completion of the acquisition of the Initial Portfolio.
25 July 2013, 2.00 p.m. Commence trading on a ready basis
30 July 2013 Settlement Date for all trades done on a ready basis on the
Listing Date.
The above timetable is only indicative as it assumes (i) that the closing of the application list for
the Public Offer (the Application List) is 23 July 2013, (ii) that the Listing Date is 25 July 2013,
(iii) compliance with the SGX-STs Stapled Securities holding spread requirement and (iv) that the
Stapled Securities will be issued and fully paid-up prior to 2.00 p.m. on 25 July 2013. All dates and
times referred to above are Singapore dates and times.
Trading in the Stapled Securities on a ready basis is expected to commence at 2.00 p.m. on 25
July 2013 (subject to the SGX-ST being satisfied that all conditions necessary for the
commencement of trading in the Stapled Securities on a ready basis have been fulfilled), as the
completion of the acquisition of the Initial Portfolio is expected to take place at or before 2.00 p.m.
on 25 July 2013. (See Certain Agreements Relating to OUE H-Trust, OUE H-BT and the Initial
Portfolio for further details.) There will be no trading of the Stapled Securities through the
SGX-ST on a when-issued basis. If OUE H-REIT is terminated, or OUE H-BT is wound up, or the
Stapled Securities are unstapled under the circumstances specified in the OUE H-REIT Trust
Deed, OUE H-BT Trust Deed and the Stapling Deed respectively prior to, or if the acquisition of
the Initial Portfolio is not completed by, 2.00 p.m. on 25 July 2013 (being the time and date of
commencement of trading in the Stapled Securities), the Offering will not proceed and the
application monies will be refunded (without interest or any share of revenue or other benefit
arising therefrom and at each applicants own risk and without any right or claim against OUE
H-Trust, OUE H-REIT, OUE H-BT, the REIT Manager, the REIT Trustee, the Trustee-Manager, the
Sponsor, the Joint Global Coordinators or the Joint Bookrunners). (See The Formation and
Structure of OUE H-Trust, OUE H-REIT and OUE H-BT The Formation and Structure of OUE
H-REIT Termination of OUE H-REIT for further details.)
In the event of an early or extended closure of the Application List or the shortening or extension
of the time period during which the Offering is open, the REIT Manager will publicly announce the
same:
via SGXNET, with the announcement to be posted on the internet at the SGX-ST website:
http://www.sgxnet.sgx.com; and
in one or more major Singapore newspapers, such as The Straits Times, The Business
Times and Lianhe Zaobao.
49
Investors should monitor the SGXNET, or the newspapers, or check with their brokers on the date
on which trading on a ready basis will commence.
The Managers will provide details and results of the Public Offer (including the level of
subscription for the Stapled Securities under the Public Offer and the basis of allocation of the
Stapled Securities under the Public Offer pursuant to the Offering), as soon as practicable after
the close of the Offering through SGXNET and in one or more major Singapore newspapers, such
as The Straits Times, The Business Times and Lianhe Zaobao.
The Managers reserve the right to reject or accept, in whole or in part, or to scale down or ballot
any application for the Stapled Securities, without assigning any reason for it, and no enquiry
and/or correspondence on the decision of the Managers will be entertained. In deciding the basis
of allotment, due consideration will be given to the desirability of allotting the Stapled Securities
to a reasonable number of applicants with a view to establishing an adequate market for the
Stapled Securities.
Where an application is rejected or accepted in part only or if the Offering does not proceed for
any reason, the full amount or, as the case may be, the balance of the application monies will be
refunded (without interest or any share of revenue or other benefit arising therefrom) to the
applicant, at his own risk, and without any right or claim against OUE H-Trust, OUE H-REIT, OUE
H-BT, the REIT Manager, the REIT Trustee, the Trustee-Manager, the Sponsor, the Joint Global
Where an application is not successful, the refund of the full amount of the application monies
(without interest or any share of revenue or other benefit arising therefrom) to the applicant is
expected to be completed, at his own risk, within 24 hours after balloting (provided that such
refunds in relation to applications in Singapore are made in accordance with the procedures set
out in Appendix G, Terms, Conditions and Procedures for Application for and Acceptance of the
Stapled Securities in Singapore).
Where an application is accepted in full or in part only, any balance of the application monies will
be refunded (without interest or any share of revenue or other benefit arising therefrom) to the
applicant at his own risk, within 14 Market Days (as defined herein) after the close of the Offering
(provided that such refunds in relation to applications in Singapore are made in accordance with
the procedures set out in Appendix G, Terms, Conditions and Procedures for Application for and
Acceptance of the Stapled Securities in Singapore).
Where the Offering does not proceed for any reason, the full amount of application monies
(without interest or any share of revenue or other benefit arising therefrom) will within three Market
Days after the Offering is discontinued, be returned to the applicants at their own risk (provided
that such refunds in relation to applications in Singapore are made in accordance with the
procedures set out in Appendix G, Terms, Conditions and Procedures for Application for and
Acceptance of the Stapled Securities in Singapore).
50
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following tables are only an extract from, and should be read together with the section
Unaudited Pro Forma Financial Information and the report set out in Appendix B, Reporting
Auditors Report on the Unaudited Pro Forma Financial Information.
The unaudited historical pro forma financial information for OUE H-REIT (the Unaudited Pro
Forma Financial Information) for FY2010, FY2011, FY2012 and the three months ended 31
March 2012 (1Q2012) and 31 March 2013 (1Q2013, and collectively the Relevant Period),
based on the Offering Price, assuming that the Over-Allotment Option is fully exercised, is as
follows:
Unaudited Pro Forma Statements of Total Return
(1)
of OUE H-REIT
FY2010
S$000
FY2011
S$000
FY2012
S$000
1Q2012
S$000
1Q2013
S$000
Gross revenue 95,970 107,593 107,811 26,764 26,633
Property expenses (15,118) (13,524) (12,886) (3,817) (3,022)
Net property income 80,852 94,069 94,925 22,947 23,611
REIT Managers base
management fees (5,349) (5,358) (5,353) (1,339) (1,338)
REIT Managers performance
fees (3,234) (3,763) (3,797) (918) (944)
REIT Trustees fee (267) (338) (337) (84) (84)
Other trust expenses (2,161) (2,161) (2,161) (540) (540)
Finance income 44 53 49 13 12
Finance expense (14,597) (14,597) (14,597) (3,649) (3,405)
Net income 55,288 67,905 68,729 16,430 17,312
Gain on revaluation of
investment properties 48,060
Total return for the
year/period 103,348 67,905 68,729 16,430 17,312
(Less)/Add: Net tax
adjustments
(2)
(40,619) 12,895 13,010 3,234 2,553
Income available for distribution 62,729 80,800 81,739 19,664 19,865
Notes:
(1) Based on the Offering Price of S$0.88 per Stapled Security and an acquisition consideration of S$1,705 million for
the Initial Portfolio.
(2) Net tax adjustments comprise non-tax (chargeable)/deductible items including the REIT Managers management
fees payable in Stapled Securities, the REIT Trustees fee, gain on revaluation of investment properties,
amortisation of debt-related transaction costs and straight-lining of rental income for all periods presented.
51
Unaudited Pro Forma Statements of Financial Position
(1)
of OUE H-REIT
As at
31 December
2012
As at
31 March
2013
S$000 S$000
Non-current assets
Investment properties 1,756,000 1,756,000
Current assets
Trade and other receivables 1,902 1,902
Cash and cash equivalents 10,356 10,253
12,258 12,155
Total assets 1,768,258 1,768,155
Current liabilities
Rental deposits 1,462 1,359
Non-current liabilities
Borrowings (secured) 581,130 581,130
585,632 585,632
Total liabilities 587,094 586,991
Net assets 1,181,164 1,181,164
Represented by:
Unitholders funds 1,181,164 1,181,164
Number of OUE H-REIT Units in issue (000) 1,308,600 1,308,600
Net asset value per OUE H-REIT Unit (S$) 0.903 0.903
Note:
52
Unaudited Pro Forma Statements of Cash Flows
(1)
of OUE H-REIT
FY2012
S$000
1Q2013
S$000
Cash flows from operating activities
Total return for the year/period 117,117 17,075
Adjustments for:
Finance income (15) (4)
Finance expense
(2)
14,597 3,649
REIT Managers base management fees paid/payable in
Stapled Securities 5,291 1,322
REIT Managers performance fees paid/payable in
Stapled Securities 3,797 944
Gain on revaluation of investment properties (48,287)
Operating income before working capital changes 92,500 22,986
Changes in working capital:
Trade and other payables 6,092 (67)
Net cash generated from operating activities 98,592 22,919
Cash flows from investing activities
Acquisition of properties and related assets and liabilities,
including acquisition costs (1,148,049)
Subsequent capital expenditure (2,638) (24)
Interest received 15 4
Net cash used in investing activities (1,150,672) (20)
Cash flows from financing activities
Proceeds from issue of OUE H-REIT Units 599,980
Payment of transaction costs relating to issuance of units (21,309)
Proceeds from borrowings 587,000
Payment of transaction costs relating to borrowings (5,870)
Finance costs paid (13,031) (3,258)
Distribution to holders of OUE H-REIT Units (61,279) (20,426)
Net cash from/(used in) financing activities 1,085,491 (23,684)
Net increase/(decrease) in cash and cash equivalents 33,411 (785)
Cash and cash equivalents at beginning of the
year/period 33,411
Cash and cash equivalents at end of the year/period 33,411 32,626
Notes:
(2) Comprises finance expense incurred on borrowings and amortisation of debt-related transaction costs.
53
PROFIT FORECAST AND PROFIT PROJECTION
The following is an extract from Profit Forecast and Profit Projection. Statements contained in
this extract that are not historical facts may be forward-looking statements. Such statements are
based on the assumptions set forth in Profit Forecast and Profit Projection and are subject to
certain risks and uncertainties that could cause actual results to differ materially from those
forecast and projected. Under no circumstances should the inclusion of such information herein
be regarded as a representation, warranty or prediction with respect to the accuracy of the
underlying assumptions by OUE H-Trust, OUE H-REIT, OUE H-BT, the REIT Manager, the REIT
Trustee, the Trustee-Manager, the Property Manager, the Sponsor, the Joint Global Coordinators,
the Joint Bookrunners or any other person, or that these results will be achieved or are likely to
be achieved. (See Forward-Looking Statements and Risk Factors for further details.)
Prospective investors in the Stapled Securities are cautioned not to place undue reliance on these
forward-looking statements, which are valid only as at the date of this Prospectus.
Trustee-Manager, the Sponsor, the Joint Global Coordinators or the Joint Bookrunners
guarantees the performance of OUE H-Trust, OUE H-REIT or OUE H-BT, the repayment of
capital or the payment of any distributions, or any particular return on the Stapled
Securities. The forecast and projected yields stated in the following tables are calculated
based on
the Offering Price, and
the assumption that the Listing Date will be 1 July 2013.
Such yields will vary accordingly if the Listing Date is not 1 July 2013 and in relation to
investors who purchase the Stapled Securities in the secondary market at a market price
that differs from the Offering Price.
The following tables set forth the forecast and projected statements of total return of OUE H-REIT
for Forecast Period 2013 and Projection Year 2014. The financial results of OUE H-Trust is mainly
contributed by OUE H-REIT as OUE H-BT will be dormant and its results would be immaterial.
Accordingly, no profit forecast and profit projection for OUE H-BT and OUE H-Trust has been
presented. The financial year end of OUE H-REIT is 31 December. The forecast and projected
results for Forecast Period 2013 and Projection Year 2014 (the Profit Forecast and Profit
Projection) may be different to the extent that the actual date of issuance of Stapled Securities
is other than 1 July 2013, being the assumed date of the issuance of Stapled Securities for the
Offering. The Profit Forecast and Profit Projection are based on the assumptions set out in the
section Profit Forecast and Profit Projection and have been reviewed and examined by KPMG
LLP (the Reporting Auditors) and should be read together with the report set out in Appendix
A, Reporting Auditors Report on the Profit Forecast and Profit Projection, as well as the
assumptions and the sensitivity analysis set out in the section Profit Forecast and Profit
Projection.
54
Forecast and Projected Statements of Total Return for OUE H-REIT
The forecast and projected statements of total return for OUE H-REIT based on the Offering Price,
assuming the Over-Allotment Option is fully exercised, are as follows:
Forecast Period 2013
(9 Months)
(1)
S$000
(12 Months)
(1)
S$000
Gross revenue 84,430 115,419
Property expenses (9,910) (13,552)
Net property income 74,520 101,867
REIT Managers base management fees (3,976) (5,300)
REIT Managers performance fees (2,981) (4,075)
REIT Trustees fees (199) (317)
Other trust expenses (2,161) (2,161)
Finance income 14 13
Finance expense
(2)
(10,948) (14,597)
Net income 54,270 75,431
Gain on revaluation of investment
properties 50,925
Total return for the period/year 105,195 75,431
(Less)/Add: Net tax adjustments
(3)
(42,582) 11,275
Income available for distribution
to Unitholders 62,613 86,706
Weighted average number of Units
outstanding at end of period/year (000)
(4)
1,311,293 1,320,553
Distribution rate 100% 100%
Distribution per Unit (cents) 4.77 6.57
Offering Price (S$/Unit) 0.88 0.88
Full year distribution yield 7.15%
(5)
7.46%
Illustrative distribution yield from
Listing Date 7.36%
(6)
N.A.
Notes:
(2) Finance expense includes interest expenses, amortisation of debt-related transaction costs and other bank charges
and fees.
fees payable in Stapled Securities, the REIT Trustees fees, gain on revaluation of investment properties and
amortisation of debt-related transaction costs.
(4) The increase in number of Stapled Securities in issue is a result of the assumed payment of 100.0% of the REIT
Managers management fees for the relevant period in the form of Stapled Securities issued at the Offering Price.
(5) The Full Year 2013 Distribution has been calculated based on the unaudited pro forma historical income available
for distribution from 1 January 2013 to 31 March 2013 of S$19.9 million and the forecast income available for
distribution for the 9-month Forecast Period 2013 of S$62.6 million.
distributions made for the period from 1 January 2013 and ending on the day immediately preceding the Listing
Date.
55
RISK FACTORS
Prospective investors should consider carefully, together with all other information contained in
this Prospectus, the factors described below before deciding to invest in the Stapled Securities.
The risks described below are by no means exhaustive or comprehensive, and there may be other
risks in addition to those shown below which are not known to the REIT Manager and/or the
Trustee-Manager or which may not be material now but could turn out to be material in the future.
Additional risks, whether known or unknown, may in the future have a material adverse effect on
OUE H-Trust or impair the business operations of OUE H-Trust. The market price of the Stapled
Securities could decline due to any of these risks and Stapled Securityholders may lose all or part
of their investment. In addition, this Prospectus does not constitute advice to you relating to
investing in the Stapled Securities and investors should make their own judgment or consult their
own investment advisers before making any investment in the Stapled Securities.
This Prospectus also contains forward-looking statements (including profit forecasts and profit
projections) that involve risks, uncertainties and assumptions. The actual results of OUE H-Trust,
OUE H-REIT and/or OUE H-BT could differ materially from those anticipated in these forward-
looking statements as a result of certain factors, including the risks faced by OUE H-Trust as
described below and elsewhere in this Prospectus.
Due to the fact that OUE H-Trust comprises OUE H-REIT and OUE H-BT, risk factors for OUE
H-Trust include considerations relevant to the Stapled Securities, collective investment schemes
and business trusts.
As an investment in the Stapled Securities is meant to produce returns over the long-term,
investors should not expect to obtain short-term gains.
Investors should be aware that the price of the Stapled Securities, and the income from them,
might fall or rise. Investors should note that they might not get back their original investment.
Before deciding to invest in the Stapled Securities, prospective investors should seek professional
advice from their own investment or other advisers about their particular circumstances.
RISKS RELATING TO THE HOSPITALITY AND HOSPITALITY-RELATED INDUSTRIES
The financial performance of OUE H-Trust is dependent on the conditions and outlook of
the hospitality and hospitality-related industries in the countries in which OUE H-Trust has
assets and/or operates and/or in which OUE H-Trust will have assets and/or operate.
OUE H-Trust comprises OUE H-REIT and OUE H-BT. The Initial Portfolio of OUE H-REIT
comprises Mandarin Orchard Singapore and Mandarin Gallery, both of which are located in
Singapore. OUE H-BT will be dormant and therefore will not own any assets as at the Listing Date.
On the Listing Date, Mandarin Orchard Singapore will be leased to the Master Lessee pursuant
to a Master Lease Agreement under which OUE H-REIT will receive revenue in the form of rental
payments based on a Fixed Rent and a Variable Rent. However, any deterioration in the general
economic outlook for the hospitality and hospitality-related industries in Singapore may affect the
profitability of the Initial Portfolio, and this could affect (i) the ability of the Master Lessee to pay
rent in accordance with the Variable Rent calculation as set forth in the Master Lease Agreement
(see Certain Agreements Relating to OUE H-Trust, OUE H-REIT, OUE H-BT and the Properties
Master Lease Agreement for further details) or to pay the Fixed Rent; (ii) the property values
of the Initial Portfolio and therefore the NAV per Stapled Security; (iii) the ability of OUE H-REIT
to enter into new master lease agreements on favourable terms following the termination or
56
expiration of the Master Lease Agreement; and (iv) the REIT Managers ability to successfully
pursue its long-term growth strategies. Any deterioration in the amount of the rental payments to
OUE H-REIT or any impairment to the ability of the Master Lessee to pay rent could have a
material adverse effect on the business, financial condition, results of operations and prospects
of OUE H-REIT, and consequently the distributions from OUE H-Trust to Stapled Securityholders.
Although OUE H-Trusts Initial Portfolio comprises properties located in Singapore, OUE H-Trusts
investment mandate envisages investments in income-producing real estate and real estate-
related assets. Any deterioration in the general economic outlook of the hospitality and
hospitality-related industries in the countries in which OUE H-Trust has assets and/or operates
and/or in which OUE H-Trust will have assets and/or operate could affect the profitability of any
future properties and may have a material adverse effect on the business, financial condition,
results of operations and prospects of OUE H-Trust, and consequently affect distributions from
OUE H-Trust to Stapled Securityholders.
The hospitality and hospitality-related industries are susceptible to cyclicality and other
factors outside the control of OUE H-Trust and the Managers.
Both the hospitality and hospitality-related industries are cyclical and sensitive to external and
economic changes. There are a number of factors which are common to the regional hospitality
and hospitality-related industries and are wholly or partly beyond the control of OUE H-Trust and
the Managers. These factors, which could affect the financial performance of OUE H-Trust,
include but are not limited to, the following (some of which are further elaborated upon and
discussed below):
the condition of, and changes in, the domestic, regional and global economies, including, but
not limited to, factors such as the political landscape, environmental conditions and viral
epidemics such as avian flu, Severe Acute Respiratory Syndrome (SARS) and Middle East
Respiratory Syndrome (MERS) that may result in reduced occupancy rates, RevPAR and
demand for the hospitality and hospitality-related assets of OUE H-Trust;
increased threat of terrorism, terrorist events, aviation-related strikes, hostilities between
countries, increased risk of natural disasters and/or adverse weather conditions such as
smog from forest fires that may affect travel patterns and reduce the number of business and
commercial travellers and tourists, in general, in Singapore or any other countries in which
the hospitality and hospitality-related assets of OUE H-Trust may be located in the future;
unexpected increase in new supply in the markets in which OUE H-Trust operates, which
could adversely impact the occupancy levels and revenue of the Initial Portfolio or future
hospitality and/or hospitality-related assets of OUE H-Trust;
changes in OUE H-Trusts relationships with, and the performance and reputation of the
Master Lessee, the Property Manager and/or the Hotel Manager;
changes in government laws and regulations, fiscal policies and zoning ordinances and the
related costs of compliance with laws and regulations, fiscal policies and ordinances
affecting OUE H-Trust, OUE H-REIT and/or OUE H-BT;
57
the nature and length of a typical hotel guests stay as hotel guests typically stay on a
short-term basis and there is therefore no assurance of long-term occupancy for hotel rooms.
Factors which may affect the above include:
seasonality patterns in tourism arrival numbers throughout the year;
decrease in longer-term business travel and corporate executives requiring mid- to
long-term accommodation;
frequency of events or conferences in the surrounding vicinity of Mandarin Orchard
Singapore and Mandarin Gallery or future hospitality or hospitality-related assets of
OUE H-Trust; and
slowdown in tourism, business and conferences where the Initial Portfolio is located,
which may adversely affect the length of a travellers stay;
unexpected increases in transportation or fuel costs, strikes among workers in the
transportation industry and adverse weather conditions that could affect travel;
increases in operating costs due to inflation, labour costs (including the impact of
unionisation), workers compensation and healthcare-related costs, maintenance costs,
utility costs, insurance and unanticipated costs such as those resulting from acts of nature
and their consequences;
relations between OUE H-Trust and service providers or lenders;
difficulties in identifying hospitality and hospitality-related assets to acquire and difficulties in
completing and integrating acquisitions;
the time that it may take to construct, develop or complete the refurbishments of properties
and receive registrable title to such properties and the ability to renovate the Initial Portfolio
and future assets of OUE H-Trust in order to preserve or expand demand for such assets;
unfavourable publicity in relation to the Initial Portfolio and the reputation and standing of the
service providers, including restaurants, located within the Initial Portfolio and/or future
hotels and hospitality-related assets of OUE H-Trust;
loss of otherwise regular customers to newer or alternative hotels for convenience, better
services or lower room rates;
dependence on business, commercial and leisure travel and tourism, which may fluctuate
and tend to be seasonal and are subject to the adverse effects of national and international
market conditions, all of which may affect the length of a travellers stay;
changes in the directors and executive officers of the REIT Manager (the REIT Manager
Directors and the REIT Manager Executive Officers, respectively) and the directors and
executive officers of the Trustee-Manager (the Trustee-Manager Directors and the
Trustee-Manager Executive Officers, respectively, and together with the REIT Manager
Directors and REIT Manager Executive Officers, the Directors and Executive Officers,
respectively);
58
the provision of existing or planned amenities and transportation infrastructure near the
Initial Portfolio and/or future hospitality and hospitality-related assets of OUE H-Trust; and
other matters not yet known to the REIT Manager and/or the Trustee-Manager or not
currently considered material by the REIT Manager and/or the Trustee-Manager.
These factors could have adverse effects on OUE H-Trusts business, financial condition, results
of operations, prospects and ability to make distributions to Stapled Securityholders.
The hospitality industry is highly competitive and the performance of OUE H-Trust may be
affected by increasing supply of hospitality assets in Singapore.
The hospitality industry in Singapore is highly competitive and the completion of new hotels or
renovations of competing hotel properties may reduce the competitiveness of older or existing
properties. Mandarin Orchard Singapore experiences competition primarily from other similar
grade hotels in its immediate vicinity as well as from other hotels and serviced apartments in
Singapore. The level of competition in the Singapore hospitality industry is affected by various
factors, including changes in local, regional and global economic conditions, changes in local,
regional and global populations, the supply and demand for hotel rooms and changes in patterns
and preferences. The success of a hotel, including Mandarin Orchard Singapore, in its market will
largely depend on its ability to brand and compete in areas such as quality of accommodation,
room rates, level of service and service experiences, brand recognition, convenience of location
and the quality of lobby areas, F&B facilities and other amenities. Competing hotels may offer
more facilities at their premises at similar or more competitive prices compared to the facilities
offered at Mandarin Orchard Singapore. Competitors may also significantly lower their rates or
offer greater convenience, services or amenities, to attract more customers. If these efforts by
competitors are successful, the results of operations at the Hotel may be adversely affected.
(See Business and Properties Competition for further details.)
According to the Independent Market Research Report, an estimated 13,670 hotel rooms are
expected to enter the market by the end of 2017. (See Appendix E, Independent Market Research
Report for further details.) The new supply of hotels, serviced residences or other
accommodation options in Singapore could adversely impact the occupancy rates and revenues
of the Initial Portfolio or future hospitality and/or hospitality-related assets of OUE H-Trust, which
would in turn have adverse effects on OUE H-Trusts financial condition, results of operations and
ability to make distributions to Stapled Securityholders.
The hospitality industry is service-oriented and OUE H-Trust may be adversely affected if
it is unable to compete effectively for skilled hospitality employees.
The hospitality industry is a service-oriented industry and is very labour-intensive. Competitors
may compete aggressively for skilled hospitality employees, which would increase the operating
cost of the Hotel. The hospitality staff of OUE H-Trust may also be poached by existing or new
competitors in the market, which may have an adverse effect on the operations of the Hotel. In
addition, changes in foreign labour regulations may impact the availability of hospitality staff and
increase the operating costs of the Hotel. A shortage of manpower and compressed work
procedures may translate to lower service quality, which may in turn affect guests lodging
experience and lead existing customers to prefer alternative accommodation from competitors of
the Hotel.
59
Acts of God, wars, terrorist attacks, riots, civil commotions, widespread communicable
diseases, adverse weather conditions and other events beyond the control of OUE H-Trust
may adversely affect the financial performance of OUE H-Trust.
OUE H-Trust may be adversely affected by acts of God, wars, terrorist attacks, riots, civil
commotions, adverse weather conditions such as smog from forest fires, widespread infectious
and/or communicable diseases (including avian flu (including H1N1, H5N1 or H7N9), SARS or
MERS) and other events beyond the control of OUE H-Trust. The Managers cannot predict the
extent to which these factors will, directly or indirectly, impact distributions to Stapled
Securityholders, the hospitality and hospitality-related industries or the operating results and
overall financial performance of OUE H-Trust in the future.
The World Health Organisation and certain governments may issue travel advisories against
non-essential travel to affected regions, or even impose travel restrictions. Any such travel
advisories or restrictions into, or the suspension of any transport infrastructure of, Singapore or
any other country in which OUE H-Trust has assets are likely to have a material adverse effect on
the number of international visitor arrivals and therefore the corresponding demand for hospitality
properties under OUE H-Trusts portfolio.
Accordingly, the occurrence of any such events may adversely affect the business of any
hospitality properties in OUE H-Trusts portfolio, which may in turn adversely affect OUE H-Trusts
financial condition, results of operations and ability to make distributions to Stapled
Securityholders.
OUE H-Trusts financial performance may be affected by changes in travel patterns
resulting from increases in transportation or fuel costs, strikes among workers in the
transportation industry and adverse weather patterns.
Changes in travel patterns can be erratic and this may adversely affect the revenue and gross
operating profit of the hospitality and hospitality-related assets in OUE H-Trusts portfolio, with a
consequential impact on the revenue of OUE H-Trust and the distributions to be made to Stapled
Securityholders.
Increases in transportation or fuel costs, strikes among workers in the transportation industry and
adverse weather patterns may deter travellers and the financial performance of OUE H-Trust may
be adversely affected as a consequence. These travellers represent a crucial source of income for
the hospitality and hospitality-related assets of OUE H-Trust. Any sustained or material decline in
traveller numbers may adversely affect OUE H-Trusts financial condition, results of operations
and ability to make distributions to Stapled Securityholders.
The hospitality business is a regulated business.
The operation of hospitality properties in Singapore is subject to various laws and regulations,
such as the Hotels Act, Chapter 127 of Singapore (the Hotels Act) and the Innkeepers Act,
Chapter 139 of Singapore, which hotels in Singapore are required to be licensed under. The
withdrawal, suspension or non-renewal of any of these licences, or the imposition of any penalties
as a result of any infringement or non-compliance with any requirement of any of these licences,
will have an adverse impact on the business and results of operations of the Hotel. Further, any
changes in such laws and regulations, or the imposition of any new laws and regulations, may also
have an impact on the businesses at the Hotel and result in higher costs of compliance. In
addition, any failure to comply with these laws and regulations could result in the imposition of
fines or other penalties by the relevant authorities. This could have an adverse impact on the
revenue and profits of the Hotel or otherwise adversely affect the Hotels operations and the ability
of OUE H-Trust to make distributions to Stapled Securityholders.
60
RISKS RELATING TO THE RETAIL INDUSTRY
The profit earned from, and the value of, the retail assets in OUE H-Trusts portfolio may be
adversely affected by a number of factors.
The revenue earned from, and the value of, the retail assets in OUE H-Trusts portfolio may be
adversely affected by a number of factors, including:
vacancies following the expiry or termination of leases that lead to lower occupancy rates
which reduce the revenue of OUE H-Trust;
the inability to collect rent from tenants on a timely basis or at all;
rental rebates given to tenants facing market pressure;
tenants seeking the protection of bankruptcy laws which could result in delays in the receipt
of rent payments, inability to collect rental income, or delays in the termination of the tenants
lease, which could hinder or delay the re-letting of the space in question;
the amount of rent payable by tenants and the terms on which lease renewals and new
leases are agreed being less favourable than current leases;
the local and international economic climate and real estate market conditions (such as
oversupply of, or reduced demand for, retail and commercial space, changes in market rental
rates and operating expenses for OUE H-Trusts properties);
inability to arrange for adequate management and maintenance or to put in place adequate
insurance (see Risk Factors Risks Relating to Investing in Real Estate The value of OUE
H-Trusts assets might be adversely affected by uninsurable loss or if any of the Sponsor, the
REIT Manager, the Master Lessee, other master lessees and/or OUE H-BT (as the case may
be) do not provide adequate management and maintenance or purchase or put in place
adequate insurance in relation to the assets of OUE H-Trust and its potential liabilities to third
parties (including potential liability claims), for further details);
competition for tenants from other properties which may affect rental levels or occupancy
levels at OUE H-Trusts properties;
changes in laws and governmental regulations in relation to real estate, including those
governing usage, zoning, taxes and government charges. Such revisions may lead to an
increase in management expenses or unforeseen capital expenditure to ensure compliance.
Rights related to the relevant properties may also be restricted by legislative actions, such
as revisions to laws relating to building standards or town planning laws, or the enactment
of new laws related to condemnation and redevelopment;
acts of God, wars, terrorist attacks, riots, civil commotions, adverse weather conditions such
as smog from forest fires and other events beyond OUE H-Trusts control; and
higher interest rates.
To the extent that any of these factors occur, they may impact the revenue earned from, and the
value of, the retail assets in OUE H-Trusts portfolio, which may in turn adversely affect the
business, financial condition, results of operations and prospects of OUE H-Trust.
61
Downturns in the retail industry will likely have a direct impact on OUE H-Trusts revenues
and cash flow.
OUE H-Trusts financial performance will be linked to economic conditions in the Singapore
market for retail space generally. The demand for retail space in Singapore could be adversely
affected by any of the following:
weakness in the national and regional economies;
a decline in the number of tourist arrivals to Singapore;
adverse financial condition of certain large corporations and retailing companies;
supply exceeding demand for retail space in Singapore;
an increase in consumer purchases through catalogues or the Internet and reduction in the
demand for tenants to occupy OUE H-Trusts retail properties as a result of the Internet and
e-commerce;
the timing and costs associated with property improvements and rentals;
any changes in taxation and zoning laws;
adverse government regulation; and
higher interest rates.
To the extent that any of these factors occur, they are likely to impact market rents for retail space
which will then affect the financial condition and results of operations of OUE H-Trust.
The retail industry is subject to changing trends and OUE H-Trusts success is dependent
upon the ability of Mandarin Gallerys tenants to supply goods responsive to such changes.
The retail industry is subject to changing trends in consumer preferences. The selection and
timing of merchandise purchases is crucial. The success of tenants in Mandarin Gallery is largely
contingent on their ability to anticipate these trends and to cater to the tastes of their customers.
Incorrect forecasting of future demand could result in an excess or shortage of inventory, which
could lead to higher interest charges, price reductions or write downs on slow-moving or excess
stock and the risk of alienating consumers who might then seek alternative shopping experiences.
In addition, Mandarin Gallerys tenants may suffer a loss of profits if the products they offer are
superseded by more modern or popular merchandise and if the increasing speeds of innovation
result in significant liabilities to Mandarin Gallerys tenants in the form of obsolete stock that is
quickly outdated and difficult to sell. In these circumstances, OUE H-Trust may be exposed to the
risk of tenant default under its lease agreements and damage to the image of Mandarin Gallery,
which will adversely affect the business, financial condition, results of operations and prospects
of OUE H-Trust.
62
RISKS RELATING TO MANDARIN ORCHARD SINGAPORE
OUE H-Trust is reliant on Mandarin Orchard Singapore for a substantial portion of its Gross
Revenue.
While the initial portfolio of OUE H-Trust will comprise Mandarin Orchard Singapore and Mandarin
Gallery, OUE H-Trust will be reliant on Mandarin Orchard Singapore for a substantial portion of its
Gross Revenue. For Forecast Period 2013 and Projection Year 2014, the REIT Manager estimates
that Mandarin Orchard Singapore will account for 67.8% (in respect of Forecast Period 2013) and
68.1% (in respect of Projection Year 2014) of OUE H-Trusts Gross Revenue, respectively.
Any circumstance which adversely affects the operations or business of Mandarin Orchard
Singapore or its attractiveness to customers may reduce the Hotels contribution to the Gross
Revenue of OUE H-Trust. This in turn may adversely affect the financial condition and results of
operations of OUE H-Trust, reducing the ability of OUE H-Trust to make distributions to Stapled
Securityholders.
There is no assurance that a new leasehold title to Mandarin Orchard Singapore and
Mandarin Gallery will be granted.
The leasehold title to Mandarin Orchard Singapore and Mandarin Gallery, which is held under a
single title, is for a period of 99 years commencing from 1 July 1957, such that the Initial Portfolio
has a remaining leasehold tenure of approximately 43 years.
OUE H-Trust may have to incur a substantial cost in order to obtain a grant of a new leasehold
title to the Initial Portfolio. If OUE H-Trust is not able to obtain a grant of a new leasehold title to
the Initial Portfolio on commercially acceptable terms or at all, OUE H-Trust will have to surrender
the Initial Portfolio to the lessor, The Ngee Ann Kongsi, upon expiration of the lease. The value of
the Initial Portfolio, and consequently the underlying asset value of the Stapled Securities, will be
lost upon such surrender. This may have an adverse effect on the net income of OUE H-Trust.
In the event that the Master Lease Agreement is terminated, OUE H-REIT may have to pay
a termination fee to the Master Lessee.
On the Listing Date, the REIT Trustee will enter into a long-term Master Lease Agreement with the
Master Lessee. OUE H-REIT may sell its interests in Mandarin Orchard Singapore subject to the
terms of the Master Lease Agreement. If the REIT Trustee requires such sale to be free and clear
of the Master Lease Agreement, the REIT Trustee may terminate the Master Lease Agreement
whereupon the REIT Trustee shall pay the Master Lessee a termination fee equal to the fair
market value of the Master Lessees leasehold interest in the remaining term and the option term.
(See Certain Agreements Relating to OUE H-Trust, OUE H-REIT, OUE H-BT and the Properties
Master Lease Agreement for further details.)
The payment of a termination fee upon the termination of the Master Lease Agreement may
adversely affect OUE H-Trusts business, financial condition, results of operations and prospects
which may have an adverse effect on its ability to make distributions to Stapled Securityholders.
The loss of the Master Lessee, or a downturn in the business of the Master Lessee or any
breach by the Master Lessee of its obligations under the Master Lease Agreement could
have an adverse effect on the financial condition and results of operations of OUE H-Trust.
On the Listing Date, Mandarin Orchard Singapore will be entirely leased to the Master Lessee.
OUE H-REIT is dependent upon rental payments from the Master Lessee as OUE H-REIT cannot
directly operate Mandarin Orchard Singapore under the Property Funds Appendix. The Master
Lessee will contract with the Hotel Manager to manage OUE H-REITs hospitality and hospitality-
63
related assets. OUE H-Trusts financial condition, results of operations and ability to make
distributions to Stapled Securityholders will therefore depend substantially upon the ability of the
Master Lessee to make timely rental payments under the Master Lease Agreement. As such, the
financial condition and results of operation of OUE H-Trust may be adversely affected by the
bankruptcy, insolvency or downturn in the business of the Master Lessee.
The performance of the Master Lessee and its ability to pay rent in accordance with the Variable
Rent calculation or the Fixed Rent as set forth in the Master Lease Agreement may be affected
by factors beyond its control, such as changes in general economic conditions, the level of
demand for Mandarin Orchard Singapore, the performance of the Hotel Manager, competition in
the hospitality and hospitality-related industries, and other factors relating to the operations of
Mandarin Orchard Singapore. There can be no assurance that the Master Lessee will have
sufficient assets, income and access to financing to enable it to satisfy its obligations under the
Master Lease Agreement. If the Master Lessee fails to meet its obligations, the business, financial
condition, results of operations and prospects of OUE H-Trust and consequently the ability of OUE
H-Trust to make distributions to Stapled Securityholders may be adversely affected.
If the Master Lessee terminates or defaults on the Master Lease Agreement or does not renew the
Master Lease Agreement on expiry, the financial performance, and consequently the distributions
which OUE H-Trust may be able to make to Stapled Securityholders, may be adversely affected.
The amount of rental and the terms on which the Master Lease Agreement is renewed and a new
master lease agreement is agreed upon may be less favourable than the current Master Lease
Agreement. The replacement of a master lessee on satisfactory terms may not be carried out in
a timely manner or at all. Notwithstanding that as a last resort, OUE H-BT will step in as the master
lessee, there can be no assurance that OUE H-BT will be able to provide a similar amount of
income from the Hotel. In such event, OUE H-Trusts revenue, financial performance and
consequently its ability to make distributions to Stapled Securityholders, may be adversely
affected.
The Master Lessee and the Hotel Manager may not properly maintain Mandarin Orchard
Singapore.
The Master Lessee and the Hotel Manager may not properly maintain Mandarin Orchard
Singapore, resulting in substantial deferred capital expenditure. Lack of capital or insufficient cash
flow may adversely impact future operations and the profitability of Mandarin Orchard Singapore,
thereby adversely affecting the ability of the Master Lessee to fund costs of repairs, maintenance,
renewals of FF&E, operating equipment
1
and inventories and/or to make rental payments to OUE
H-Trust.
In addition, should the Master Lessee or the Hotel Manager fail to provide adequate management
and maintenance, the value of Mandarin Orchard Singapore may be adversely affected.
Inadequate management and maintenance of the Hotel may also result in a loss of guests and
rental income from Mandarin Orchard Singapore, which may in turn adversely affect distributions
to Stapled Securityholders.
Renovation work, repair and maintenance or physical damage to Mandarin Orchard
Singapore may disrupt the operations of OUE H-REIT.
The quality and design of Mandarin Orchard Singapore may influence the RevPAR and the
demand for hotel rooms. Mandarin Orchard Singapore may need to undergo renovation works
from time to time to retain their attractiveness to guests, and may also require ad hoc maintenance
or repairs in respect of faults or problems that may develop or because of new planning laws or
1 Items customarily referred to as operating equipment in the hotel industry include, but are not limited to,
glassware, silverware, cutlery, chinaware, crockery, linen and uniforms as well as all those items generally required
for the day-to-day operation of a hotel.
64
regulations, such that there may be periodic capital expenditure beyond the REIT Managers
current estimates for refurbishment, renovation and improvements. The cost of maintaining
Mandarin Orchard Singapore and the risk of unforeseen maintenance or repair requirements will
tend to increase over time as Mandarin Orchard Singapore ages. The business and operations of
the Hotel may be disrupted as a result of renovation works and it may not be possible to collect
the full rate of or, as the case may be, any rental income on the space affected by such renovation
works. This may affect the performance of the Master Lessee and its ability to make timely rental
payments under the Master Lease Agreement.
RISKS RELATING TO MANDARIN GALLERY
The loss of key tenants or a downturn in the businesses of the tenants in Mandarin Gallery
could have an adverse effect on the financial performance of OUE H-Trust.
The forecast and projected contribution of Mandarin Gallery to the Gross Revenue of OUE H-REIT
is 32.2% for Forecast Period 2013 and 31.9% for Projection Year 2014. As such, OUE H-REITs
financial condition, operating results and ability to make distributions may be adversely affected
by the bankruptcy, insolvency or downturn in the businesses of key tenants in Mandarin Gallery,
including the decision by any such tenants not to renew their leases.
Based on the total occupied NLA for the first 3 months of March 2013, the top 10 tenants in
Mandarin Gallery occupy 35.5% of the occupied NLA of Mandarin Gallery. By rental collection, the
top 10 tenants contribute 58.7% of the total retail rental income of Mandarin Gallery for the first
three months ended 31 March 2013. Based on these tenants lease tenures, the leases for these
top 10 tenants will expire between 2014 and 2016. Further, 50.9% of Mandarin Gallerys leases
(by retail rental income for the first three months ended 31 March 2013) are expected to expire in
2015.
Mandarin Gallery is dependent upon its key tenants for a significant portion of its income. If these
leases are terminated for any reason, or the tenants do not renew their leases at expiry or reduce
their leased space or renew their leases at lower rentals or are unable to pay the rental, the
income of Mandarin Gallery may be adversely affected. Replacement tenants on satisfactory
terms may not be found in time or at all.
Further, certain key tenants in Mandarin Gallery help generate shopper traffic. The loss of one or
more of these key tenants may reduce shopper traffic, thereby reducing the attractiveness of
Mandarin Gallery to potential tenants and affecting the ability of Mandarin Gallery to retain existing
tenants. This may adversely impact OUE H-Trusts operating results.
Mandarin Gallery faces competition from other retail properties and also from new retail
development projects in the Orchard area.
Competition for shopper traffic among malls in the Orchard Road area is intense. Mandarin
Gallery faces competition from the surrounding shopping malls in the Orchard Road area.
Shopper traffic may be attracted to other popular shopping malls such as Ngee Ann City, Wisma
Atria and Paragon, which are all located close to each other and Mandarin Gallery. This could lure
shopper traffic away from the vicinity of Mandarin Gallery, leading to a drop in demand for tenancy.
According to the Independent Market Research Report, an estimated four retail projects with over
800,000 sq ft of NLA in the Orchard Road area are expected to enter the market by the end of
2014. (See Appendix E, Independent Market Research Report for further details.) The new
supply of NLA of retail projects in the Orchard Road area could adversely impact the occupancy
rates and revenues of the Initial Portfolio or future hospitality and/or hospitality-related assets of
OUE H-Trust, which would in turn have adverse effects on OUE H-Trusts financial condition,
results of operations and ability to make distributions to Stapled Securityholders. Factors that
65
affect the ability of shopping malls to attract or retain tenants include the attractiveness of the
building and the surrounding areas to prospective tenants and their customers or clients and the
quality of the buildings existing tenants. The income from, and market value of, Mandarin Gallery
will be largely dependent on its ability to compete against other shopping malls in Singapore in
attracting and retaining tenants.
Where competing properties in the Orchard Road area are developed or substantially upgraded
and refurbished, the attractiveness of Mandarin Gallery may be affected, which may adversely
impact the rental rates and hence reduce its income.
Historical market values of Mandarin Gallery may not be indicative of its future market
value.
There is no guarantee that Mandarin Gallery will be able to consistently charge the same level of
rental rates if its future market value declines. This will reduce its income, resulting directly or
indirectly in lower distributions to holders of the Stapled Securities.
RISKS RELATING TO OUE H-TRUSTS OPERATIONS
The Sponsor will be a controlling holder of Stapled Securities, and will be able to exercise
influence over certain activities of OUE H-Trust.
The Sponsor Group is engaged in, among other things, hotel management and operation as well as
investing in real estate and real estate-related assets which are used primarily for hospitality and/or
hospitality-related purposes, whether wholly or partially. Concurrent but separate from the Offering,
the Sponsor will receive 626,781,999 Consideration Stapled Securities in part satisfaction of the
purchase price for the Initial Portfolio, constituting 47.9% (assuming that the Over-Allotment Option is
not exercised) of the total number of Stapled Securities expected to be in issue after the Listing Date).
The Sponsor will therefore be in a position to exercise influence in matters which require the
approval of Stapled Securityholders.
OUE H-REIT has no direct control over the Master Lessee and the Hotel Manager.
The financial performance of OUE H-REIT, including distributions to Stapled Securityholders, is
dependent upon the Gross Operating Revenue and Gross Operating Profit of Mandarin Orchard
Singapore. In respect of Mandarin Orchard Singapore, OUE H-REIT will enter into a long-term Master
Lease agreement with the Master Lessee, which will enjoy, subject to certain limitations, full discretion
in the operation of Mandarin Orchard Singapore. The Master Lessee, in turn, will enter into a
supplemental agreement (supplemental to the Original Hotel Management Agreement) with the Hotel
Manager on the Listing Date. Although OUE H-REIT has the right, under certain limited circumstances,
to approve the replacement of the Hotel Manager, there is no direct contractual relationship between
OUE H-REIT and the Hotel Manager and OUE H-REIT has no control over the operations,
management, branding or marketing of the Hotel. Accordingly, the financial performance of OUE
H-REIT is dependent on the performance of the Master Lessee and the Hotel Manager in respect of
Mandarin Orchard Singapore, even though OUE H-REIT has no control over the operations,
management, branding or marketing of Mandarin Orchard Singapore. There is therefore no assurance
that Mandarin Orchard Singapore will continue to be operated, managed, maintained, branded or
marketed well in the future.
66
The approval thresholds for the removal of the REIT Manager and the Trustee-Manager are
different.
The circumstances in which the REIT Manager and the Trustee-Manager may be removed differ:
Under the OUE H-REIT Trust Deed, the REIT Manager may be removed by the REIT Trustee
upon the occurrence of certain events, including the passing of a resolution by a majority
consisting of more than 50.0% of the total number of votes present and voting (with no
participants being disenfranchised) at a meeting of the holders of OUE H-REIT Units duly
convened and held. (See Management and Corporate Governance OUE H-REIT
Retirement or Removal of the REIT Manager.)
The OUE H-BT Trust Deed however provides that the Trustee-Manager may be removed only
by a resolution duly passed by a majority of holders of OUE H-BT Units consisting of more
than 75.0% of the total number of votes present and voting (with no participants being
disenfranchised) at a meeting of holders of OUE H-BT Units duly convened and held. (See
Management and Corporate Governance OUE H-BT Retirement or Removal of the
The lower threshold of approval of holders of OUE H-REIT Units for the removal of the REIT
Manager, as well as the existence of other grounds for removal, gives rise to a higher possibility
of the REIT Manager being removed and replaced as compared to the Trustee-Manager. In the
event that only the REIT Manager is removed and replaced, the Trustee-Manager will be required
to cooperate with the new manager of OUE H-REIT (which will have a different board of directors
from the Trustee-Manager) in the management of OUE H-Trust.
If the CMS Licence of the REIT Manager is cancelled or the authorisation of OUE H-REIT as
a collective investment scheme under Section 286 of the SFA is suspended, revoked or
withdrawn, the operations of OUE H-REIT will be adversely affected.
The CMS Licence issued to the REIT Manager is subject to conditions. If the REIT Manager fails
to satisfy or comply with these conditions, the CMS licence of the REIT Manager may be cancelled
by the MAS and the operations of OUE H-REIT will be adversely affected as the REIT Manager
would no longer be able to act as the manager of OUE H-REIT.
OUE H-REIT was authorised as a collective investment scheme on 18 July 2013 and must comply
with the requirements under the SFA and the Property Funds Appendix. In the event that the
authorisation of OUE H-REIT is suspended, revoked or withdrawn, its operations will also be
adversely affected.
There is no assurance that OUE H-Trust will be able to leverage the Sponsors experience
in the operations of hotels.
Immediately upon completion of the Offering, the Sponsor will hold 100.0% of its effective interest
in 626,782,000 Stapled Securities constituting 47.9% (assuming that the Over-Allotment Option is
not exercised) of the total number of Stapled Securities expected to be in issue and accordingly
will be a controlling holder of OUE H-REIT Units and OUE H-BT Units. (See Ownership of the
Stapled Securities for further details.) The Sponsor has agreed to the Lock-up Period in respect
of such Stapled Securities. There is no assurance that the Sponsor will not dispose of its effective
interest in the Stapled Securities following the expiry of the Lock-up Period. In the event that the
Sponsor decides to transfer or dispose of its effective interest in the Stapled Securities and
ceases to be a controlling holder of OUE H-REIT Units and OUE H-BT Units, OUE H-Trust may
no longer be able to leverage on the Sponsors experience in the ownership and operation of
hotels, market research and network of contacts in the hospitality and hospitality-related
67
industries to further its growth. This may have a material and adverse impact on OUE H-Trusts
results of operations and financial condition which may, as a consequence, affect OUE H-Trusts
ability to make distributions to Stapled Securityholders.
The termination or retirement of the REIT Manager and/or the Hotel Manager could have an
adverse effect on the financial condition and results of operations of OUE H-Trust.
The REIT Manager is responsible for, among other things, formulating and executing OUE
H-REITs investment strategy and making recommendations to the REIT Trustee on the
acquisition and disposal of hospitality and/or hospitality-related assets. (See Overview
Structure of OUE H-Trust The REIT Manager for further details.) The Hotel Manager will be
engaged by the Master Lessee under the Hotel Management Agreement and will provide, among
other things, hotel management services such as the daily running and managing of the Hotel and
its related activities. (See Overview Structure of OUE H-Trust The Hotel Manager for further
details.) As such, OUE H-Trusts financial condition, results of operations and ability to make
distributions to Stapled Securityholders will depend on the performance of the REIT Manager and
the Hotel Manager.
Under the OUE H-REIT Trust Deed, the REIT Manager may be removed by the REIT Trustee upon
the occurrence of certain events, including the passing of a resolution by a majority consisting of
more than 50.0% of the total number of votes (with no participants being disenfranchised) at a
meeting of the holders of OUE H-REIT Units duly convened and held. (See Management and
Corporate Governance OUE H-REIT Retirement or Removal of the REIT Manager for further
details.) Upon the retirement and/or removal of the REIT Manager and/or the Hotel Manager, the
replacement of the manager of OUE H-REIT and/or the manager of Mandarin Orchard Singapore
on satisfactory terms may not occur in a timely manner, and may adversely affect the financial
condition and results of operations of OUE H-Trust.
Potential competition may arise in the future between OUE H-Trust and the Sponsor Group.
The Sponsor is a diversified real estate owner, developer and operator which focuses its business
across the hospitality, retail, commercial and residential property segments, and the Sponsor
Group operates its hospitality business under the brands Meritus, Mandarin and Meritus
Mandarin.
To demonstrate the commitment of the Sponsor and as a means to mitigate any potential conflicts
of interests which may arise in the future, the Sponsor has granted a ROFR to OUE H-Trust (see
Certain Agreements Relating to OUE H-Trust, OUE H-REIT, OUE H-BT and the Properties Right
of First Refusal Agreement and The Sponsor for further details).
Notwithstanding this, potential competition may arise between OUE H-Trust and the Sponsor in
relation to any future acquisition of additional properties or property-related investments or in
relation to competition for customers and tenants.
OUE H-REITs initial strategy of investing in real estate located in the same development
may entail a higher level of risk compared to some other real estate investment trusts that
have properties spread over diverse locations.
The Initial Portfolio consists of Mandarin Orchard Singapore and Mandarin Gallery. This initial
investment strategy of investing in properties in the same development may entail a higher level
of risk compared to some other real estate investment trusts that have properties spread over
diverse locations. Any circumstance which adversely affects the operations or business of
Mandarin Orchard Singapore may affect Mandarin Gallery and vice versa, and OUE H-REIT will
not have income from other properties to mitigate any ensuing loss of income arising from such
circumstance.
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A concentration of investments in the same development will cause OUE H-REIT to be susceptible
to a downturn in the micro-property market in which the Initial Portfolio is comprised, such as
where there is a decline in RevPAR for hospitality properties or a decline in rental rates or capital
value for retail properties in the micro-property market. A decline in the capital value of the Initial
Portfolio will reduce the net asset backing of the Stapled Securities and may correspondingly have
an adverse impact on the market price of the Stapled Securities.
Physical damage to either Mandarin Orchard Singapore or Mandarin Gallery resulting from fire or
other causes may lead to a significant disruption to the business and operation of the Initial
Portfolio as a whole. Such physical damage to a development would have a great effect on the
financial condition and results of operations of OUE H-REIT as compared to other real estate
investment trusts that have properties spread over more than one development.
OUE H-REITs strategy of investing mainly in hospitality and hospitality-related assets may
entail a higher level of risk compared to trusts with a more diverse range of investments.
OUE H-REIT is established with the principal investment strategy of investing, directly or
indirectly, in a portfolio of income-producing real estate which is used primarily for hospitality
and/or hospitality-related purposes, whether wholly or partially, as well as real estate-related
assets.
A concentration of investments in a portfolio of such a specific class of real estate assets may
cause OUE H-REIT to be susceptible to a downturn in the hospitality and hospitality-related
industries in Singapore or any other countries in which the hospitality and hospitality-related
assets of OUE H-Trust may be located in the future. Any decline in occupancy rates may have an
adverse effect on the RevPAR of Mandarin Orchard Singapore and/or a decline in the capital value
of OUE H-REITs portfolio, which may in turn have an adverse impact on OUE H-REITs
distributions to Stapled Securityholders and/or on the results of operations and financial condition
of OUE H-REIT.
The REIT Manager may not be able to successfully implement its investment strategy.
OUE H-REIT was established with the principal investment strategy of investing, directly or
indirectly, in a portfolio of income-producing real estate, which is used primarily for hospitality
assets. Regular distributions to the Stapled Securityholders will be made by the REIT Manager.
However, there can be no assurance that the REIT Manager will be able to implement its
investment policies successfully or that it will be able to expand OUE H-REITs portfolio at all, or
at any specified rate or to any specified size. Acquisitions may cause disruptions to the operations
of OUE H-REIT and divert managements attention away from day-to-day operations. Further,
there may be significant competition for attractive investment opportunities from other real estate
investors. There is no assurance that the REIT Manager will be able to make any acquisitions or
investments on favourable terms or within a desired time frame. OUE H-REIT may also rely on
external sources of funding for acquisitions, which may not be available on favourable terms or at
all. In addition, new Stapled Securities issued in connection with any new acquisition could also
be dilutive to existing Stapled Securityholders.
The REIT Manager may change OUE H-REITs investment strategy.
OUE H-REITs policy with respect to certain activities, including investment and acquisitions, will
be determined by the REIT Manager. OUE H-REITs principal investment strategy of investing,
directly or indirectly, in a portfolio of income-producing real estate which is used primarily for
hospitality and hospitality-related purposes, whether wholly or partially, as well as real estate-
related assets, may not be changed for a period of three years commencing from the Listing Date
(as the Listing Manual prohibits a departure from the REIT Managers stated investment strategies
69
for OUE H-REIT for the stated period unless otherwise approved by an Extraordinary Resolution
of holders of OUE H-REIT Units). However, after this initial three year period, the REIT Manager
may change OUE H-REITs investment strategy without the approval of holders of OUE H-REIT
Units, and the OUE H-REIT Trust Deed gives the REIT Manager wide powers to invest in other
types of assets, including any real estate, real estate-related assets, as well as listed and unlisted
securities in Singapore and other jurisdictions. There are risks and uncertainties with respect to
the selection of investments and with respect to the investments themselves.
OUE H-Trust may be affected by adverse developments or negative publicity affecting the
OUE, Mandarin or Meritus brand names.
OUE H-Trust is closely associated with the OUE, Mandarin and Meritus brand names. Any
degradation or adverse market developments relating to the OUE, Mandarin or Meritus brand
names or any negative publicity affecting the Mandarin and/or Meritus hospitality properties
could adversely affect the results of operations of the Initial Portfolio. Furthermore, any adverse
developments, negative publicity and future financial challenges experienced by the Sponsor
Group may indirectly result in negative perceptions of OUE H-Trust due to OUE H-Trusts close
association with the Sponsor, which could have a material adverse effect on OUE H-Trusts
financial condition and results of operations and, in turn, its ability to make distributions to Stapled
Securityholders.
The hospitality and hospitality-related industries are capital-intensive and the growth of
OUE H-Trust may be affected if it is unable to obtain financing on favourable terms or at all.
The assets of OUE H-Trust will require periodic capital expenditures for purposes of
refurbishments, renovation and improvements to remain competitive. Acquisitions or development
of additional hospitality and/or hospitality-related assets may also require significant funding.
There is no assurance that OUE H-Trust will be able to fund the foregoing capital requirements
solely from cash provided from its operating activities. Additional equity or debt financing is
subject to prevailing conditions in the equity and debt markets, and may not be available on
favourable terms or at all.
The amount OUE H-REIT may borrow is subject to the aggregate leverage limit set out in the
Property Funds Appendix, which may affect the operations of OUE H-Trust.
Under the Property Funds Appendix, OUE H-REITs total borrowings and deferred payments,
including deferred payments for assets whether to be settled in cash, OUE H-REIT Units or, as the
case may be, Stapled Securities, should not exceed 35.0% of the value of the OUE H-REIT
Deposited Property at the time the borrowing is incurred (the Aggregate Leverage). The
Aggregate Leverage limit may be increased up to a maximum of 60.0% only if OUE H-REIT
obtains and discloses to the public a credit rating from Fitch, Inc., Moodys or Standard & Poors.
As at the Listing Date, OUE H-REIT will have an Aggregate Leverage of 33.2%.
Adverse business consequences of this limitation on borrowings may include:
an inability to fund capital expenditure requirements in relation to OUE H-REITs existing
portfolio or in relation to OUE H-REITs future acquisitions of additional hospitality and/or
hospitality-related assets to expand its portfolio;
a decline in the value of the OUE H-REIT Deposited Property may cause the borrowing limit
to be exceeded, thus affecting OUE H-REITs ability to incur further borrowings; and
cash flow shortages (including with respect to distributions) which OUE H-REIT might
otherwise be able to resolve by borrowings.
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OUE H-Trust faces risks associated with debt financing.
Both OUE H-REIT and OUE H-BT will be subject to risks associated with debt financing, including
the risk that their cash flow will be insufficient to meet required payments of principal and interest
under such financing or to make distributions to Stapled Securityholders or the risk that they will
be unable to maintain certain financial covenants or security ratios under such debt facilities. (See
Capitalisation and Indebtedness for further details.)
OUE H-REIT intends to distribute 100.0% of its Taxable Income for Forecast Period 2013 and
Projection Year 2014. Thereafter, OUE H-REIT will distribute at least 90.0% of its Taxable Income,
with the actual level of distribution to be determined at the REIT Manager Boards discretion. In
the event OUE H-BT becomes active and profitable, the decision to distribute and the quantum of
distributions to be made by OUE H-BT will be determined by the Trustee-Manager Board at its sole
discretion. As a result of their distribution policies, if the cash flows from their operations are
insufficient, OUE H-REIT and/or OUE H-BT may have to obtain additional debt or equity financing
or both to meet their distribution obligations. There can be no assurance that such financing will
be available on acceptable terms or at all.
Both OUE H-REIT and OUE H-BT will also be subject to the risk that the terms of any refinancing
of borrowings may not be as favourable and this may include an increase in interest expense. This
may adversely affect both OUE H-REITs and OUE H-BTs cash flow and the amount of
distributions they could make to Stapled Securityholders. (See Risk Factors OUE H-Trusts
distribution policy may cause OUE H-Trust to face liquidity constraints and Capitalisation and
Indebtedness for further details.)
OUE H-REIT and/or OUE H-BT may engage in interest rate hedging transactions, which can
limit gains and increase exposure to losses.
OUE H-REIT and/or OUE H-BT may enter into hedging transactions to protect themselves from
the effects of interest rate fluctuations on floating rate debt and also to protect their portfolios from
interest rate and prepayment fluctuations, so as to optimise risk-adjusted returns to Stapled
Securityholders.
Interest rate hedging could fail to protect OUE H-Trust or adversely affect OUE H-Trust because,
among other things:
the party owing money in the hedging transaction may default on its obligation to pay or may
become insolvent;
the credit quality of the party owing money on the hedge may be downgraded to such an
extent that it impairs OUE H-REITs and/or OUE H-BTs (as the case may be) ability to sell
or assign its side of the hedging transaction; and
the value of the derivatives used for hedging may be adjusted from time to time in
accordance with accounting rules to reflect changes in fair value. Downward adjustments
could reduce the NAV of OUE H-Trust.
Interest rate hedging involves risks and transaction costs, which may reduce overall returns for
OUE H-Trust.
(See Capitalisation and Indebtedness and Strategy for further details.)
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OUE H-Trust does not have an established operating history.
OUE H-REIT and OUE H-BT were constituted on 10 July 2013 The REIT Manager and the
Trustee-Manager were both incorporated on 17 April 2013. As such, OUE H-REIT, OUE H-BT and
the Managers do not have operating histories by which their respective past performances may
be judged. This will make it more difficult for prospective investors to assess their likely future
performance. There can be no assurance that (i) OUE H-REIT and OUE H-BT will be able to
generate sufficient revenue from operations to make distributions; (ii) such distributions will be in
line with those set out in Profit Forecast and Profit Projection; or (iii) OUE H-BT will generate
sufficient cash flow to meet its rental payment obligations to OUE H-REIT if OUE H-BT becomes
a master lessee of Mandarin Orchard Singapore. The pro forma historical financial information
and operating statistics included in this Prospectus in relation to the Initial Portfolio should not be
used as a basis for evaluating OUE H-Trusts results of operations in the future.
OUE H-Trust may depend on certain key personnel, and the loss of any key personnel may
adversely affect its operations.
OUE H-Trusts performance may depend, in part, upon the continued service and performance of
members of the senior management team and certain key senior personnel of the REIT Manager.
These key personnel may leave the REIT Manager in the future or compete with the REIT
Manager and OUE H-Trust. The loss of any of these individuals or of one or more of the REIT
Managers other key employees and the inability to find suitable replacements on a timely basis
could have a material adverse effect on OUE H-Trusts financial condition and results of
operations.
OUE H-REIT may be adversely affected by a delay in the completion of asset enhancement
works currently in progress or contemplated.
refurbishment of 430 hotel rooms. This work commenced in FY2013. The projected capital
expenditure of the Master Lessee for FY2013 is budgeted in the region of S$4.3 million, with
additional upgrading work expected to be in the region of S$23.1 million, which will be funded by
the Sponsor. Any delay in the completion of the asset enhancement works may result in a potential
loss in revenue, thereby adversely affecting the financial condition and results of operations of
Mandarin Orchard Singapore or Mandarin Gallery and the rental payments made to OUE H-REIT.
These will in turn affect OUE H-Trusts financial condition, results of operations and ability to make
distributions to Stapled Securityholders.
The REIT Manager may from time to time initiate asset enhancement on the Initial Portfolio. There
is no assurance that such plans for asset enhancement will materialise, and even if they do
materialise, they may incur substantial costs to OUE H-Trust and yet not achieve their desired
results.
The Sponsor ROFR will be terminated if the conditions to the Sponsor ROFR remaining in
full force and effect are not satisfied.
To facilitate acquisition growth, the Sponsor has granted the Sponsor ROFR to OUE H-Trust over
any future sales by a Relevant Entity
1
of income-producing properties which are used primarily for
hospitality and/or hospitality-related purposes. (See Overview Key Investment Highlights of
OUE H-Trust for further details on the Sponsor ROFR Properties.)
1 Relevant Entity means the Sponsor or any of its existing or future subsidiaries or existing or future private funds
managed by the Sponsor (Sponsor Private Funds).
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The rights under the Sponsor ROFR are granted to OUE H-Trust with effect from the Listing Date
and will cease immediately upon the occurrence of any of the following events: (i) the REIT
Manager or any of its related corporations (as defined in the Companies Act) ceasing to be the
manager of OUE H-REIT, (ii) the Trustee-Manager or any of its related corporations ceasing to be
the Trustee-Manager of OUE H-BT, (iii) the Sponsor and/or any of its related corporation, alone
or in aggregate, ceasing to own 15.0% or more of the total issued share capital of each of the REIT
Manager or the Trustee-Manager, or (iv) the Sponsor and/or any of its related corporation, alone
or in aggregate, ceasing to own 15.0% or more of the OUE H-REIT Units and OUE H-BT Units.
If any of the conditions to the Sponsor ROFR ceases to be fulfilled, the Sponsor ROFR will
terminate and OUE H-Trust will not be able to benefit from the Sponsor ROFR. This may adversely
affect OUE H-Trusts ability to implement its acquisition growth strategy.
Right of First Refusal Agreement for further details.)
If OUE H-BT steps in as the master lessee for the Hotel, it may be required to indemnify the
Hotel Manager.
In the event that OUE H-BT steps in as the master lessee for the Hotel, it may be required to
indemnify the Hotel Manager against any claims arising from managing Mandarin Orchard
Singapore, as the industry standard is for hotel managers to act merely as agents of the hotel
owner/lessee. Accordingly, OUE H-BT may be required to indemnify the Hotel Manager for all
claims from employees working at Mandarin Orchard Singapore as well as former employees of
Mandarin Orchard Singapore. There can be no assurance that any such claims will not adversely
impact OUE H-BTs financial condition thereby affecting its ability to perform its duties as a master
lessee, as well as its ability to make rental payments to OUE H-Trust which could affect OUE
H-Trusts ability to make distributions to Stapled Securityholders.
RISKS RELATING TO INVESTING IN REAL ESTATE
Portions of Mandarin Orchard Singapore and Mandarin Gallery are within the railway
protection and safety zone, and certain activities may not be carried out in such zone
unless the prior approval of the Land Transport Authority of Singapore (the LTA) is
obtained.
Portions of Mandarin Orchard Singapore and Mandarin Gallery are within the railway protection
and safety zone, such that OUE H-REIT would be required to obtain the prior approval of the LTA
before carrying out restricted activities within the railway protection and safety zone. Such
restricted activities include the movement or operation of any crane, piling equipment, excavator
or any other mechanical equipment or vehicle, the storing or placing of any goods, materials or
substances, and the erection of sheds, shelters, tents, scaffolding, maintenance towers,
hoardings or other similar temporary structures. There is no guarantee that the LTAs permission
can be obtained if the REIT Manager intends to carry out any restricted activity within the railway
protection and safety zone. This may affect the ability of OUE H-REIT to carry out asset
enhancement or other development or rectification works on Mandarin Orchard Singapore and/or
Mandarin Gallery.
Mandarin Orchard Singapore and Mandarin Gallery are affected by lines of road and tunnel
road reserves.
Such lines of road and tunnel road reserves indicate the extent of the safeguarded roads and
tunnels affecting Mandarin Orchard Singapore and Mandarin Gallery. While the road line plan
obtained from the LTA shows the lines of road reserve and tunnel road reserve, it does not quantify
them. The explanatory notes to the road line plan explain that these lines could be applicable
73
when there is a development or redevelopment of Mandarin Orchard Singapore and/or Mandarin
Gallery or as and when works are required to be carried out by the relevant authorities. The
Independent Valuers have taken these into account in their valuations.
Legal proceedings may arise in connection with the easement rights granted by the original
lessee of the land on which Mandarin Orchard Singapore and Mandarin Gallery are situated
and its neighbouring land.
The land on which Mandarin Orchard Singapore and Mandarin Gallery are situated, and its
neighbouring land, each enjoys and is subject to easement rights over and against the other. Such
easement rights were granted by the original lessee of the land and the said neighbouring land.
Historically, the rights of use have not been strictly adhered to by all parties. OUE does not rule
out any proceedings arising in connection with the easement rights and is of the view that any
claim would likely be for damages. Any claim for damages which is to be paid by OUE H-Trust may
affect the payment of distributions by OUE H-Trust to Stapled Securityholders.
The operations of OUE H-Trust may be adversely affected by economic and real estate
market conditions and changes in regulatory, fiscal and other governmental policies in the
countries in which the assets of OUE H-Trust are located.
While the assets in OUE H-Trusts initial portfolio are located in Singapore, OUE H-Trusts
investment strategy envisages extending the investments of OUE H-Trust to other countries apart
from Singapore. As a result, OUE H-Trusts results of operations depend, to a large extent, on the
performance of the local, regional and/or global economy.
An economic decline in Singapore could adversely affect OUE H-Trusts results of operations and
future growth. Political upheavals, natural disasters, insurgency movements, riots and
governmental policies all play a pivotal role in the performance of OUE H-Trusts hospitality and
hospitality-related assets. Investment in hospitality and hospitality-related assets in other
countries will expose OUE H-Trust to additional real estate market conditions in those countries.
Other real estate market conditions which may adversely affect the performance of OUE H-Trust
include the attractiveness of competing hospitality and hospitality-related assets or an oversupply
or reduced demand for such hospitality and hospitality-related assets. OUE H-Trust may also be
exposed to risks associated with exchange rate fluctuations between the Singapore dollar and
foreign currencies.
Further, OUE H-Trust will be subject to foreign real estate laws, regulations and policies as a
result of its property investments in foreign countries. Measures and policies adopted by the
relevant foreign governments and regulatory authorities at national, provincial or local levels, such
as government control over property investments or regulations in relation to foreign exchange,
might negatively impact OUE H-Trusts overseas properties. Legal protection and recourse
available to OUE H-Trust in certain countries may be limited.
In addition, the income and gains derived from investment in hospitality and/or hospitality-related
assets in other countries will be subject to various types of taxes in Singapore as well as in other
foreign countries. All of these taxes are subject to changes in laws and regulations that may lead
to an increase in tax rates, or the introduction of new taxes could adversely affect and erode the
returns from these hospitality and hospitality-related assets and hence affect the distribution yield
to Stapled Securityholders. There is also no assurance that OUE H-REIT and/or OUE H-BT will
be able to repatriate to Singapore the income and gains derived from investment in hospitality
and/or hospitality-related assets outside Singapore on a timely and regular basis. Any inability to
repatriate the income and gains to Singapore will affect OUE H-Trusts ability to make distributions
to Stapled Securityholders out of such income and gains.
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The appraisals of Mandarin Orchard Singapore and Mandarin Gallery are based on various
assumptions and the price at which OUE H-Trust is able to sell Mandarin Orchard
Singapore or Mandarin Gallery in the future may be different from its initial acquisition
price.
The valuations of Mandarin Orchard Singapore and Mandarin Gallery prepared by the
Independent Valuers are contained in Appendix D, Independent Property Valuation Summary
Reports. The Independent Valuers have used the discounted cash flow method and the income
capitalisation method to value the Initial Portfolio. The valuations are based on certain
assumptions which are subjective and uncertain and and there can be no assurance that the
assumptions relied on are accurate measures of the market.
The appraisals arrived at by the Independent Valuers may have included a subjective
determination of certain factors relating to the relevant property, such as its relative market
position, financial and competitive strengths, and physical condition. Accordingly, the values of
Mandarin Orchard Singapore and Mandarin Gallery may have been evaluated inaccurately. The
Appraised Value (as defined herein) of the Initial Portfolio or any future acquisitions is not an
indication of, and does not guarantee, a sale price at that value at present or in future. The price
at which OUE H-Trust may be able to sell a property may be lower than its Appraised Value or the
initial acquisition price of the property.
Defects affecting the Initial Portfolio could result in the inability to operate the Initial
Portfolio and may affect the performance of the Master Lessee, causing it to be unable to
make timely payments of rent.
The Master Lessee is not required to repair any latent or patent defects in the Initial Portfolio or
carry out structural or capital repairs. However, these defects could have an impact on the
operations and/or cash flow of the Master Lessee, thereby potentially affecting the performance
of the Master Lessee and resulting in its inability to make timely payments of rent, which would
have an impact on the revenue, total returns and financial condition of OUE H-Trust.
The value of OUE H-Trusts assets might be adversely affected by uninsurable loss or if any
of the Sponsor, the REIT Manager, the Master Lessee, other master lessees and/or OUE
H-BT (as the case may be) do not provide adequate management and maintenance or
purchase or put in place adequate insurance in relation to the assets of OUE H-Trust and
its potential liabilities to third parties (including potential liability claims).
Should the Sponsor, the REIT Manager, the Master Lessee, other master lessees and/or OUE
H-BT (in the event it becomes a master lessee) fail to provide adequate management and
maintenance, or fail to establish and maintain adequate insurance in relation to physical damage
to any of the assets of OUE H-REIT by fire or other causes and its potential liabilities to third
parties (including public liability claims), OUE H-REIT may be exposed to various liabilities and
losses to the extent that such assets and liabilities are not fully compensated by insurance
proceeds.
As at the Listing Date, OUE H-REIT will have in place for the Initial Portfolio an all risks policy,
business interruption policy, terrorism policy and public liability policy. Although the REIT Trustee
would be named as a beneficiary under these policies, there is no assurance that OUE H-REIT
has obtained or will obtain adequate insurance for any of the assets of OUE H-REIT or that such
insurance will be cost efficient or properly maintained. In the event that there is any breach or
default in the policies, OUE H-REIT may not be properly or adequately insured.
Certain types of risks (including war risk, losses caused by the withholding of supply of, e.g.
utilities, by a supply authority and contamination or other environmental breaches) may be
uninsurable or become uninsurable or the cost of insurance may be prohibitive when compared
75
to the risk. Should an uninsured loss or a loss in excess of insured limits occur, OUE H-Trust could
be required to pay compensation and/or lose capital invested in the affected property as well as
anticipated future revenue from that property. OUE H-Trust would also remain liable for any debt
or other financial obligation related to that property. No assurance can be given that material
losses in excess of insurance proceeds will not occur in the future.
OUE H-Trust may suffer losses and be liable for the damage suffered by third parties as a
result of contamination or other environmental issues in the event that contaminants are
found on the land on which the Initial Portfolio or other assets of OUE H-Trust are located.
The Initial Portfolio and other assets acquired in the future by OUE H-Trust may be affected by
contamination or other environmental issues which may not previously have been identified and/or
rectified at the time of acquisition or which may subsequently occur after acquisition. This gives
rise to a number of risks, including:
the risk of prosecution by environmental authorities;
the requirement for unbudgeted additional expenditure to remedy such issues;
the adverse impact on the hotel operations at the affected property which may in turn
adversely affect the revenue of OUE H-Trust, or where the affected property is leased to
other lessees, the revenue of these lessees which may in turn affect their abilities to meet
their obligations under the lease agreements with OUE H-Trust; and
the adverse impact on the value of the affected property.
OUE H-Trust may be liable to bear the costs of remedying or removing such contamination and
there is no guarantee that OUE H-Trust will be able to recover such costs from other parties which
might have contributed to or are responsible for such contamination.
OUE H-Trust may be subject to increases in property expenses and other operating
expenses.
OUE H-Trusts ability to make distributions to Stapled Securityholders could be adversely affected
if property and other operating expenses increase.
Factors that could increase property expenses and other operating expenses include:
changes in statutory laws, regulations or government policies which increase the cost of
compliance with such laws, regulations or policies;
increases in insurance premiums;
increases in the rate of inflation;
defects affecting or environmental pollution in connection with OUE H-Trusts hospitality and
hospitality-related assets which need to be rectified, leading to unforeseen capital
expenditure; and
increases in the REIT Managers management fees, the Property Managers fees, the REIT
Trustees fees and other trust expenses.
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There can be no assurance that, if property and other operating expenses increase, such
increases will not have a significant impact on OUE H-Trusts financial condition and total returns.
In addition, such increase may adversely affect the ability of OUE H-Trust to make expected
distributions to Stapled Securityholders.
The property tax to which OUE H-Trust is subject may increase.
Property expenses for OUE H-Trust include property tax on the Initial Portfolio. Such property tax
is based on 10.0% of the annual value of the Initial Portfolio.
There is no assurance that the property tax of OUE H-Trust will remain as forecast and projected.
(See Profit Forecast and Profit Projection for further details.) The property tax expenses of OUE
H-Trust may increase due to reasons including, but not limited to, the following:
an increase in the applicable property tax rate;
changes to the Property Tax (Valuation by Gross Receipts for Hotel Premises) Order,
including, but not limited to, changes to the basis of assessment and rates of the gross
receipts;
changes to the basis of assessment for property tax; and
changes to the relevant property tax legislation or regime, including, but not limited to,
changes in the definition of annual value.
An increase in property tax may have a significant impact on the total returns, financial condition
and cash flows of OUE H-Trust. In addition, such increase may adversely affect the ability of OUE
H-Trust to make expected distributions to Stapled Securityholders.
OUE H-Trust may be adversely affected by the illiquidity of real estate investments.
OUE H-Trusts investment strategy is to invest, directly or indirectly, in a portfolio of income-
producing real estate which is used primarily for hospitality and hospitality-related purposes,
whether wholly or partially, as well as real estate-related assets. When OUE H-BT becomes
active, OUE H-BT may undertake certain hospitality and hospitality-related development projects,
acquisitions and investments and may be appointed as the Master Lessee in relation to such
projects, acquisitions and investments as well as the assets of OUE H-REIT. This involves a
higher level of risk as compared to a portfolio which has a more diverse range of investments. Real
estate investments, particularly investments in high value properties such as those in the Initial
Portfolio and those in which OUE H-Trust intends to invest, are relatively illiquid. Such illiquidity
may affect OUE H-Trusts ability to optimise its investment portfolio or liquidate assets in response
to changes in economic, real estate market or other conditions. For instance, OUE H-Trust may
be unable to liquidate its assets on short notice or may be forced to give a substantial reduction
in price in order to achieve a quick sale. Moreover, OUE H-Trust may face difficulties in securing
timely and commercially favourable financing in asset-based lending transactions secured by real
estate due to the illiquid nature of real estate assets. These factors could have an adverse effect
on OUE H-Trusts financial condition and results of operation, with a consequential adverse effect
on OUE H-Trusts ability to make expected distributions to Stapled Securityholders.
The Ngee Ann Kongsi may, as lessor, terminate the land lease for the Initial Portfolio upon
breach of such land lease.
The Ngee Ann Kongsi may, as lessor, terminate the land lease for the Initial Portfolio in the event
OUE H-REIT, as lessee, fails to observe or perform the terms and conditions of such land lease.
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The Initial Portfolio or a part of it may be acquired compulsorily.
The Land Acquisition Act, Chapter 152 of Singapore gives the Government the power to acquire
any land in Singapore:
for any public purpose;
where the acquisition is of public benefit or of public utility or in the public interest; or
for any residential, commercial or industrial purposes.
In the event that any of OUE H-Trusts properties are acquired compulsorily, the relevant authority
will take into consideration, amongst others, the following, in determining the amount of
compensation to be awarded:
the market value of the property as at the date of the publication in the Government Gazette
of the notification of the likely acquisition of the land (provided that within six months from the
date of publication, a declaration of intention to acquire is made by publication in the
Government Gazette), or
the market value of the property as at the date of publication in the Government Gazette of
the declaration of intention to acquire.
The market value of a property (or part thereof) which is acquired may be less than the price which
OUE H-Trust paid for the property.
In such event, such compulsory acquisitions would have an adverse effect on the Gross Revenue
of OUE H-Trust and the value of OUE H-Trusts portfolio.
OUE H-Trust may also acquire hospitality and hospitality-related assets located in other countries.
The laws of these countries may provide for a right by the respective governments of these
countries to compulsorily acquire any land or property with no compensation to the owner, or for
compensation below market value. Such compulsory acquisitions would have an adverse effect on
the revenue, results of operations and value of OUE H-Trusts portfolio.
Pursuant to the terms of the Master Lease Agreement, if the whole of Mandarin Orchard
Singapore is compulsorily acquired or such parts of Mandarin Orchard Singapore is compulsorily
acquired so as to make it, in the Master Lessees reasonable opinion, impracticable or
unreasonable to use the remainder of Mandarin Orchard Singapore as a hospitality property of the
same type and class, either party may terminate the Master Lease Agreement, with no
compensation being payable in respect of that termination. Any compensation awarded in respect
of the compulsory acquisition is to be equitably apportioned between the parties, with priority to
recoupment by OUE H-REIT of its entire investment.
Where only part of Mandarin Orchard Singapore is compulsorily acquired such that it is not
impracticable or unreasonable to operate the remainder of Mandarin Orchard Singapore as a
hospitality property of the same type and class, any compensation awarded in respect of the
compulsory acquisition is required to be applied to reimburse the Master Lessee for costs incurred
in undertaking alterations or modifications to make Mandarin Orchard Singapore a satisfactory
architectural unit as a hospitality property of similar type and class. The balance, if any, will be
equitably apportioned between the parties to compensate for any loss of income.
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OUE H-REITs acquisition of the Initial Portfolio and future acquisitions may be subject to
risks associated with the acquisition of real estate.
While the REIT Manager believes that reasonable due diligence investigations have been
conducted with respect to the Initial Portfolio prior to its acquisition by OUE H-REIT, there can be
no assurance that the Initial Portfolio or future acquisitions will not have defects or deficiencies
requiring significant capital expenditure, repair or maintenance expenses, or payment to third
parties, other than those disclosed in this Prospectus. The expert reports that the REIT Manager
has relied upon as part of its due diligence investigations of the Initial Portfolio, may contain
inaccuracies and deficiencies as certain building defects and deficiencies may be difficult or
impossible to ascertain due to the limitations inherent in the scope of the inspections, the
technologies or techniques used and/or other factors.
In addition, laws and regulations (including those in relation to real estate) may have been
breached and certain regulatory requirements in relation to the Initial Portfolio may not be or have
been complied with, which the REIT Managers due diligence investigations did not or might not
uncover. As a result, OUE H-REIT may incur financial or other obligations in relation to such
breaches or non-compliance.
In the event that there is damage or destruction to either of Mandarin Orchard Singapore or
Mandarin Gallery or any part(s) thereof prior to the Listing Date and the total costs for the
reinstatement (as estimated by a qualified and independent quantity surveyor) exceeds 20.0% of
the total reinstatement cost of Mandarin Orchard or Mandarin Gallery at or around the time of the
occurrence of the damage as determined by a loss adjuster appointed by the Vendor (Material
Damage), OUE H-REIT may terminate the property sale and purchase agreement with the
vendor for the sale of the Initial Portfolio to the REIT Trustee (the Property Sale and Purchase
Agreement) within 60 days after the date of occurrence of the event. In the event that there is
damage to Mandarin Orchard Singapore and/or Mandarin Gallery which is not Material Damage,
the Vendor would be obliged to rectify the damage at its own cost and expense prior to the Listing
Date. In the event of such damage to Mandarin Orchard Singapore or Mandarin Gallery, there can
be no assurance that the Vendor would have sufficient means and resources to complete any such
repair/reinstatement or to do so prior to the Listing Date.
In particular, the representations, warranties and indemnities granted in favour of OUE H-REIT by
the vendor of the Initial Portfolio are, or in the case of future acquisitions may be, subject to
limitations as to their scope and as to the amount and timing of claims which can be made
thereunder. There can be no assurance that OUE H-REIT or OUE H-BT would be entitled to be
reimbursed under such representations, warranties and indemnities for all losses or liabilities
suffered or incurred by it as a result of its acquisition of the Initial Portfolio or future acquisitions.
Property Sale and Purchase Agreement for further details.)
RISKS RELATING TO AN INVESTMENT IN THE STAPLED SECURITIES
The actual performance of OUE H-Trust and the Initial Portfolio could differ materially from
the forward-looking statements in this Prospectus.
This Prospectus contains forward-looking statements including, among other things, the forecast
and projected distribution level for Forecast Period 2013 and Projection Year 2014. These
forward-looking statements are based on a number of assumptions which are subject to significant
uncertainties and contingencies, many of which are outside OUE H-Trusts control. (See Profit
Forecast and Profit Projection Assumptions for further details.)
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Some or all of the events and circumstances contained in these forward-looking statements may
not occur as expected, or events and circumstances which are not currently anticipated may arise.
Actual results and performances of OUE H-Trust and the Initial Portfolio may differ materially from
those projected in these forward-looking statements.
OUE H-BT will be dormant as at the Listing Date. The forecast and projected distributions of OUE
H-Trust in this Prospectus are based on (i) the forecast and projected distribution of OUE H-REIT
and (ii) OUE H-BT remaining dormant during Forecast Period 2013 and Projection Year 2014. In
the event that OUE H-BT becomes active, it is likely that the actual distribution of OUE H-Trust for
Forecast Period 2013 and Projection Year 2014 will differ materially from that forecast and
projected in this Prospectus.
Further, while profit forecasts are prepared for Forecast Period 2013, it should be noted that due
to the seasonal nature of the hospitality business, the financial performance of hospitality
properties is generally better in the second half of the year as compared to the first half of the year.
Activities carried out by OUE H-BT will affect the returns of OUE H-Trust.
As at the Listing Date, OUE H-BT will be dormant. It will, however, become active if OUE H-REIT
is unable to appoint a master lessee for the Hotel at the expiry of the Master Lease Agreement or
for a hospitality asset newly acquired by OUE H-REIT. In such circumstances, OUE H-BT will be
appointed by OUE H-REIT as the master lessee for such property, and OUE H-BT will in turn
appoint a professional hotel manager to manage the day-to-day operations and marketing of such
property. OUE H-BT exists primarily as a master lessee of last resort.
OUE H-BT may also become active if it undertakes certain hospitality and hospitality-related
development projects, acquisitions and investments which may not be suitable for OUE H-REIT.
In this regard, OUE H-BT will generally be considered to be active in the event that it carries on
any business activity other than:
activities which OUE H-BT is required to carry out under any applicable law, regulation, rule
or directive of any agency, regulatory or supervisory body;
equity fund-raising activities and issue of new OUE H-BT Units carried out in conjunction with
OUE H-REIT which are solely for the purposes of funding OUE H-REITs business activities;
and
the lending to any entities which OUE H-BT owns or to OUE H-REIT or use of the initial
S$20,000 working capital raised from the Offering.
(See Strategy Key Strategies OUE H-BTs Strategies for further details).
When OUE H-BT becomes active, it will face additional risks including, but not limited to, material
losses suffered as a result of business or commercial risks, downturns in the relevant economies
or markets, a lack of demand for its products and services and an inability to compete effectively.
Should OUE H-BT suffer losses, or should its relative returns based on criteria such as capital or
equity employed be lower than that of OUE H-REIT, the returns of OUE H-Trust may be adversely
affected since OUE H-Trusts returns comprise an aggregate of returns from OUE H-REIT and
OUE H-BT. Such risks will be different from the risk profile of OUE H-Trust as at the Listing Date,
which is essentially that of a property owner deriving mainly rental income from the Master Lessee
and the tenants of Mandarin Gallery.
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The Stapled Securities may be subsequently unstapled.
The Stapled Securities may be unstapled for various reasons as set out in the Stapling Deed. In
particular, Stapled Securityholders may, for various reasons, after the Listing Date, decide that the
Stapled Securities should be unstapled such that an OUE H-REIT Unit is no longer stapled to an
OUE H-BT Unit (Unstapling), subject to the Stapling Deed, the OUE H-REIT Trust Deed, the
OUE H-BT Trust Deed and any relevant legislation. In the event that Unstapling should occur, the
structure of OUE H-Trust may be undermined and there may be ramifications and adverse effects
to Stapled Securityholders. As the letter of eligibility issued by the SGX-ST to OUE H-Trust for the
listing and quotation on the Main Board of the SGX-ST is in relation to the Stapled Securities and
does not extend to the listing and quotation of the individual components of the Stapled Securities,
being OUE H-REIT Units and OUE H-BT Units, upon Unstapling, the Stapled Securities will be
de-listed from the SGX-ST. As a result, investors ability to liquidate their investments in the OUE
H-REIT Units and/or OUE H-BT Units in response to changes in economic, real estate market or
other conditions may be adversely affected and the realisable value of OUE H-REIT Units and the
OUE H-BT Units may be less than their fair values.
The market price of the Stapled Securities may be adversely affected by a sale or possible
sale of the Stapled Securities by the Sponsor, Cornerstone Investors or other large
investors in the public market following the lapse of the Lock-up Period.
The Stapled Securities will be tradable on the Main Board of the SGX-ST. If the Sponsor (following
the lapse of the relevant lock-up arrangement or pursuant to any applicable waivers) sells or is
perceived as intending to sell a substantial amount of its effective interest in the Stapled Securities
held as at the Listing Date, the market price of the Stapled Securities may be adversely affected.
(See Plan of Distribution Lock-up Arrangements and Ownership of the Stapled Securities for
further details.)
The NAV per Stapled Security may be diluted if further issues are priced below the current
NAV per Stapled Security.
New Stapled Securities may be issued at a subscription price at or below the then-current NAV per
Stapled Security. Where new Stapled Securities, including Stapled Securities which may be
issued to the REIT Manager in payment of the REIT Managers management fees, are issued at
less than the current NAV per Stapled Security, the NAV of each existing Stapled Security will be
diluted.
OUE H-REIT may be unable to comply with the terms of the Tax Ruling or the Tax Ruling
may be revoked or amended.
OUE H-REIT has received the tax ruling dated 6 June 2013 from the IRAS under which tax
transparency has been granted to OUE H-REIT on stipulated terms and conditions (the Tax
Ruling). These terms and conditions include a requirement for the REIT Trustee and the REIT
Manager to take all reasonable steps necessary to safeguard the IRAS against the loss of tax as
a result of the Tax Ruling and to comply with all administrative requirements to ensure ease of tax
administration.
The Tax Ruling grants tax transparency on OUE H-REITs Taxable Income that is distributed to
Stapled Securityholders. The Tax Ruling, either in part or in whole, may be revoked or its terms
may be reviewed and amended by the IRAS at any time. If the Tax Ruling is revoked or if OUE
H-REIT is unable to comply with its terms, OUE H-REIT will be subject to tax on its Taxable Income
and the tax will be assessed on, and collected from, the REIT Trustee, in which case distributions
to Stapled Securityholders will be made after tax. In such event, the actual amount of distributions
made to Stapled Securityholders may, depending on their effective rates of individual taxation, be
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less than the amount they would have otherwise received if OUE H-REIT had been granted tax
transparency in respect of its distributions. If the terms of the Tax Ruling are amended, OUE
H-REIT may not be able to comply with the new terms imposed and this non-compliance could
affect OUE H-REITs tax transparent status and its ability to distribute its Taxable Income free of
tax deduction at source. (See Taxation Singapore Tax Terms and Conditions of the Tax Ruling
and Appendix F, Independent Taxation Report for further details.)
OUE H-Trust may be adversely affected by any increase in GST.
There is no assurance that GST will remain at the current rate of 7.0%. Any increase in GST could
have a negative impact on the hospitality and retail market, which may result in the loss of tenants
in respect of the Initial Portfolio which includes a retail component. This may in turn reduce the
Gross Revenue from Mandarin Orchard Singapore and Mandarin Gallery, thereby adversely
affecting OUE H-Trusts financial condition and results of operations.
Foreign Stapled Securityholders may not be permitted to participate in future rights issues
by OUE H-Trust.
The OUE H-REIT Trust Deed and the OUE H-BT Trust Deed provide that in relation to any rights
issue, the Managers may, in their absolute discretion, elect not to extend an offer of the Stapled
Securities under a rights issue to those Stapled Securityholders whose addresses, as registered
with CDP, are outside of Singapore. The rights or entitlements to the Stapled Securities to which
such Stapled Securityholders would have been entitled will be offered for sale and sold in such
manner, at such price and on such other terms and conditions as the Managers may determine,
subject to such other terms and conditions as the REIT Trustee and the Trustee-Manager may
impose. The proceeds of any such sale, if successful, will be paid to the Stapled Securityholders
whose rights or entitlements have been so sold, provided that where such proceeds payable to the
relevant Stapled Securityholders are less than S$10, the Managers are entitled to retain such
proceeds as part of the OUE H-REIT Deposited Property and the OUE H-BT Deposited Property
respectively. The stapled securityholding of the relevant Stapled Securityholder may be diluted as
a result of such sale.
OUE H-Trusts distribution policy may cause OUE H-Trust to face liquidity constraints.
The REIT Manager intends to distribute 100.0% of OUE H-REITs Taxable Income for Forecast
Period 2013 and Projection Year 2014. Thereafter, the REIT Manager will distribute at least 90.0%
of OUE H-REITs Taxable Income, with the actual level of distribution to be determined at the REIT
Manager Boards discretion. If OUE H-REITs Taxable Income is greater than its cash flow from
operations, there may be liquidity constraints and it may have to borrow to meet on-going cash
flow requirements since it may not have any reserves to draw on. OUE H-REITs ability to borrow
is limited, however, by the Property Funds Appendix and the willingness of lenders to provide debt
financing on favourable terms or at all. Failure to make distributions of at least 90.0% of its Taxable
Income would put OUE H-REIT in breach of the terms of the Tax Ruling and OUE H-REIT would
be liable to pay income tax on its Taxable Income.
Should OUE H-BT be active and profitable, the decision to distribute and the quantum of
distributions to be made by OUE H-BT will be determined by the Trustee-Manager Board at its sole
discretion. OUE H-BT is not required to make any distributions to Stapled Securityholders. If any
such distributions are made to Stapled Securityholders, OUE H-BT may have to borrow in order
to meet outgoing cash flow requirements in the situation where OUE H-BT holds foreign assets
and the cash generated from such assets is unable to reach Singapore within the time expected
due to various reasons such as pending regulatory approval. (See Taxation for further details.)
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Stapled Securityholders may bear the effects of tax adjustments on income distributed in
prior periods.
Distributions will be based on OUE H-REITs Taxable Income as computed by the REIT Manager.
OUE H-REITs Taxable Income as computed by the REIT Manager may, however, be subject to
adjustment by the IRAS. The effect of this adjustment would mean that OUE H-REITs actual
Taxable Income might either be higher or lower than what was computed by the REIT Manager.
The difference between OUE H-REITs actual Taxable Income and OUE H-REITs Taxable
Income, as computed by the REIT Manager for the purpose of making a distribution to Stapled
Securityholders will be added to or deducted from the Taxable Income computed by the REIT
Manager for the subsequent distribution to Stapled Securityholders and thus affect the amount of
these subsequent distributions. (See Appendix F, Independent Taxation Report for further
details.)
OUE H-Trust may not be able to make distributions or the level of distributions may fall.
The income which OUE H-Trust earns from its real estate investments depends upon, among
other factors, the amount of rental income received and the level of property and other operating
expenses incurred. If properties owned by OUE H-Trust do not generate sufficient income, OUE
H-Trusts cash flow and ability to make distributions to Stapled Securityholders will be adversely
affected. As such, OUE H-Trust is highly reliant on the continued good performance of the Initial
Portfolio to maintain distributions. There is no assurance that the level of distributions to Stapled
Securityholders will not be adversely affected in the future. No assurance can be given as to OUE
H-Trusts ability to pay or maintain distributions. Neither is there any assurance that the level of
distributions will increase over time after Projection Year 2014, that there will be contractual
increases in rent under the leases of the Initial Portfolio or that the receipt of rental revenue in
connection with any expansion of the Initial Portfolio or further acquisitions of assets will increase
OUE H-Trusts income available for distribution to Stapled Securityholders.
The laws, regulations and accounting standards in Singapore to which OUE H-Trust is
subject to may change.
OUE H-Trust may be affected by the introduction of new or revised legislation, regulations or
accounting standards. There can be no assurance that any such changes will not have an adverse
effect on the ability of the REIT Manager to carry out OUE H-REITs investment strategy, or the
ability of the Trustee-Manager to carry out OUE H-BTs strategy or on the operations and financial
condition of OUE H-Trust.
OUE H-REITs unaudited pro forma financial statements are not necessarily representative
of what its financial condition, results of operations and changes in liquidity and capital
resources would have been had OUE H-REIT been constituted prior to 10 July 2013.
The REIT Manager has prepared pro forma statements of total return, statements of cash flows
and statements of financial position to show the pro forma historical performance of OUE H-REIT
for the Relevant Period. (See Unaudited Pro Forma Financial Information for further details.)
As a result, there is only limited pro forma financial information by which the past performance of
all or part of the Initial Portfolio may be judged. This will make it more difficult for investors to
assess their likely future performance.
Further, OUE H-REITs unaudited pro forma financial statements, including the notes thereto,
contained in this Prospectus for the Relevant Period, have been prepared for the purposes of the
Offering and may not accurately reflect what OUE H-REITs results of operations or financial
condition would have been had OUE H-REIT been constituted and operated for the periods and
as of the dates presented. These unaudited pro forma financial statements have been prepared
83
using the procedures and adjustments described in Appendix C, Unaudited Pro Forma Financial
Information. In particular, the unaudited pro forma financial statements have not all been
prepared from audited financial statements. In addition, these unaudited pro forma financial
statements are not necessarily indicative of what the financial condition, results of operations and
changes in liquidity and capital resources of OUE H-REIT will be in future years. (See
Managements Discussion and Analysis of Financial Condition and Results of Operations,
Unaudited Pro Forma Financial Information and Appendix B, Reporting Auditors Report on the
Unaudited Pro Forma Financial Information for further details.)
Market and economic conditions may affect the market price and demand for the Stapled
Securities.
Movements in domestic and international securities markets, economic conditions, foreign
exchange rates and interest rates may affect the market price of and demand for the Stapled
Securities. In particular, an increase in market interest rates may have an adverse impact on the
market price of the Stapled Securities if the annual yield on the price paid for the Stapled
Securities gives investors a lower return as compared to other investments.
Certain provisions of the Singapore Code on Take-overs and Mergers (the Take-over
Code) could have the effect of discouraging, delaying or preventing a merger or
acquisition which could adversely affect the market price of the Stapled Securities.
Under the Take-over Code, an entity is required to make a mandatory offer for all the Stapled
Securities not already held by it and/or parties acting in concert with it (as defined in the Take-over
Code) in the event that an increase in the aggregate holdings of Stapled Securities of it and/or
parties acting in concert with it results in the aggregate holdings of Stapled Securities crossing
certain specified thresholds.
While the Take-over Code seeks to ensure an equality of treatment among Stapled
Securityholders, its provisions could substantially impede the ability of Stapled Securityholders to
benefit from a change in control and, as a result, may adversely affect the market price of the
Stapled Securities and the ability to realise any potential change of control premium.
Neither the REIT Manager nor the Trustee-Manager is obliged to redeem the Stapled
Securities.
Stapled Securityholders have no right to request either the REIT Manager or the Trustee-Manager
to redeem their Stapled Securities while the Stapled Securities are listed on the SGX-ST. It is
intended that Stapled Securityholders may only deal in their listed Stapled Securities through
trading on the SGX-ST.
The Stapled Securities have never been publicly traded and the listing of the Stapled
Securities on the Main Board of the SGX-ST may not result in an active or liquid market for
the Stapled Securities.
Prior to the Offering, there has been no public market for the Stapled Securities and an active
public market for the Stapled Securities may not develop or be sustained after the Offering. While
a letter of eligibility from the SGX-ST for the listing and quotation of the Stapled Securities on the
Main Board of the SGX-ST has been received, listing and quotation does not guarantee that a
trading market for the Stapled Securities will develop or, if a market does develop, that the liquidity
of that market will be maintained. Prospective Stapled Securityholders should view the Stapled
Securities as illiquid and must be prepared to hold their Stapled Securities for an indefinite length
of time.
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Although it is currently intended that the Stapled Securities will remain listed on the SGX-ST, there
is no guarantee of the continued listing of the Stapled Securities. OUE H-REIT and/or OUE H-BT
may not necessarily continue to satisfy the listing requirements of the SGX-ST.
Further, it may be difficult to assess OUE H-Trusts performance against either domestic or
international benchmarks.
The price of the Stapled Securities may decline after the Offering.
The Offering Price of the Stapled Securities has been determined by agreement among the
Managers and the Joint Bookrunners and may not be indicative of the market price for the Stapled
Securities upon the completion of the Offering. The Stapled Securities may trade at prices
significantly below the Offering Price after the Offering. The trading price of the Stapled Securities
will depend on many factors, including:
the perceived prospects of the business and investments of OUE H-REIT and OUE H-BT (if
any) and the hospitality real estate market in Singapore or any other countries in which the
hospitality and hospitality-related assets of OUE H-Trust may be located in the future;
differences between OUE H-Trusts actual financial and operating results and those
expected by investors and analysts;
changes in analysts recommendations or projection;
changes in general economic or market conditions;
the market value of OUE H-Trusts assets;
the perceived attractiveness of the Stapled Securities against other equity or debt securities,
including those not in the real estate sector;
favourable or unfavourable news on or developments of OUE H-Trust;
the balance of buyers and sellers of the Stapled Securities;
the future size and liquidity of the Singapore REIT and business trust market;
any changes from time to time to the regulatory system, including the tax system, both
generally and specifically in relation to Singapore REITs and business trusts;
the ability on OUE H-REITs part to implement successfully its investment and growth
strategies;
foreign exchange rates; and
broad market fluctuations, including weakness of the equity market and increases in interest
rates.
For these reasons, among others, the Stapled Securities may trade at prices that are higher or
lower than the NAV per Stapled Security. To the extent that OUE H-REIT retains operating cash
flow for investment purposes, working capital requirements or other purposes, these retained
funds, while increasing the value of its underlying assets, may not correspondingly increase the
market price of the Stapled Securities. Any failure on OUE H-Trusts part to meet market
expectations with regard to future earnings and cash distributions may adversely affect the market
price for the Stapled Securities.
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In addition, the Stapled Securities are not capital-safe products and there is no guarantee that
Stapled Securityholders can realise a higher amount or even the principal amount of their
investment. If OUE H-Trust, OUE H-REIT or OUE H-BT is terminated or liquidated, it is possible
that investors may lose all or a part of their investment in the Stapled Securities.
The terms of the stapled securities lending agreement may restrict the Stabilising
Managers ability to undertake stabilisation.
Pursuant to the Take-over Code, the Sponsor is required to make a mandatory offer for all the
Stapled Securities not already held by it and/or parties acting in concert with it (as defined by the
Take-over Code) in the event that an increase in the aggregate stapled securityholdings of it
and/or parties acting in concert with it results in the aggregate stapled securityholdings crossing
certain thresholds as specified in the Take-over Code. In order not to trigger the mandatory offer
requirement of the Take-over Code, the stapled securities lending agreement as described in
Plan of Distribution Over-Allotment and Stabilisation will include a right for the Sponsor to
recall such number of Stapled Securities which are equivalent to the Stapled Securities (if any)
lent under such agreement by giving seven days prior written notice to Goldman Sachs
(Singapore) Pte.. Such right of recall means that the Sponsor would not be deemed to have
disposed of such number of Stapled Securities when it lends them out, nor will it be deemed to
have acquired those Stapled Securities when they are returned to it in accordance with the
Take-over Code. In the event this right to recall is exercised by the Sponsor, it is possible that the
Stabilising Manager may not be able to stabilise the market price of the Stapled Securities. (See
Plan of Distribution Over-Allotment and Stabilisation for further details.)
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USE OF PROCEEDS
ISSUE PROCEEDS
The Managers intend to raise S$1,151.6 million (based on the Offering Price) from the Offering,
the Cornerstone Stapled Securities as well as the Consideration Stapled Securities to be issued
in part satisfaction of the purchase price of the Initial Portfolio.
OUE H-Trust will not receive any proceeds from the exercise of the Over-Allotment Option granted
by the Stapled Security Lender.
Prior to the Listing Date, the REIT Trustee will, on behalf of OUE H-REIT, put in place a S$630.0
million financing package from Standard Chartered Bank, Singapore Branch, on a secured basis
(the OUE H-REIT Debt Facilities), comprising term loan facilities of S$587.0 million consisting
of S$294.0 million for a five-year tenure and S$293.0 million for a three-year tenure (the Term
Loan Facilities), and a revolving credit facility of S$43.0 million, both of which are secured over
Mandarin Orchard Singapore and Mandarin Gallery (the Revolving Credit Facility). (See
Capitalisation and Indebtedness Indebtedness for further details). An amount of S$587.0
million of the Term Loan Facilities will be drawn down on the Listing Date to partially fund the
acquisition of the Initial Portfolio.
The following table sets out the intended source and application of the gross proceeds from the
Offering, the issue of the Cornerstone Stapled Securities, the Consideration Stapled Securities
and the draw down from the OUE H-REIT Debt Facilities.
Based on the Offering Price:
Amount Amount
Source S$000 Application S$000
The Offering 382,446 Transaction costs 29,156
(1)
Consideration Stapled Securities 551,568 Working capital 4,412
Cornerstone Stapled Securities 217,554
Term Loan Facilities 587,000
Acquisition of the
Initial Portfolio 1,705,000
Total 1,738,568 Total 1,738,568
Note:
(1) Transaction costs include expenses incurred in relation to the Offering, the Cornerstone Stapled Securities and the
OUE H-REIT Debt Facilities.
For every dollar of the proceeds raised from the Offering, the Cornerstone Stapled Securities as
well as the Consideration Stapled Securities, approximately 97.09 cents will be applied to part
finance the acquisition of the Initial Portfolio, approximately 2.53 cents to the transaction costs
and approximately 0.38 cents to working capital purposes.
ISSUE EXPENSES
The Managers estimate that expenses payable in connection with the Offering and the issuance
of the Sponsor Stapled Securities and the Cornerstone Stapled Securities and the application for
listing, including the Underwriting, Selling and Management Commission, professional fees and
all other incidental expenses relating to the Offering and the issuance of the Sponsor Stapled
Securities and the Cornerstone Stapled Securities will be approximately S$22.8 million based on
the Offering Price.
87
A breakdown of these estimated expenses is as follows:
(S$000)
(based on the
Offering Price)
Underwriting, Selling and Management Commission
(1)
18,000
Professional and other fees
(2)
2,230
Miscellaneous Offering expenses
(3)
2,570
Total estimated expenses of the Offering
(4)
22,800
Notes:
(1) Such commission represents a maximum of 3.0% of the total amount of the Offering and the Cornerstone Stapled
Securities. The amount of total commission payable by the Managers will be pegged to the Offering Price.
(2) Includes solicitors fees and fees for the Reporting Auditors, KPMG Services Pte. Ltd. as the independent tax adviser
(the Independent Tax Adviser), the Independent Valuers, the Independent Market Research Consultant and other
professionals fees.
(3) Includes cost of prospectus production, roadshow expenses and certain other expenses incurred or to be incurred
in connection with the Offering and the issuance of the Sponsor Stapled Securities and Cornerstone Stapled
Securities.
(4) The total expenses in relation to the Offering will be ultimately borne by the investors subscribing for the Stapled
Securities pursuant to the Offering.
The Managers will make periodic announcements on the utilisation of the net proceeds from the
Offering and the Cornerstone Stapled Securities via SGXNET as and when such funds are
materially utilised. The actual use of such proceeds will be disclosed in the annual report of OUE
H-Trust.
LIQUIDITY
As at the Listing Date, OUE H-Trust will have working capital of approximately S$4.4 million based
on the Offering Price. The Managers believe that this working capital and the S$43.0 million
available from the Revolving Credit Facility will be sufficient for OUE H-Trusts working capital
requirements over the 12 months following the close of the Offering.
As at the Listing Date, OUE H-BT will be dormant and will only require minimal working capital.
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OWNERSHIP OF THE STAPLED SECURITIES
EXISTING STAPLED SECURITIES
On 10 July 2013, upon the constitution of OUE H-REIT and OUE H-BT, one OUE H-REIT Unit and
one OUE H-BT Unit were issued to the Sponsor. The issue price of each OUE H-REIT Unit and
each OUE H-BT Unit was S$1.00. No other OUE H-REIT Units or OUE H-BT Units have been
issued. On 10 July 2013, the REIT Manager, the REIT Trustee and the Trustee-Manager entered
into the Stapling Deed. The OUE H-REIT Unit and the OUE H-BT Unit are stapled to each other
and constitute the Sponsor Initial Stapled Security.
STAPLED SECURITIES TO BE ISSUED TO THE SPONSOR
On the Listing Date, separate from the Offering, 626,781,999 Stapled Securities (representing
47.9% of the total number of Stapled Securities in issue on the Listing Date) will be issued to the
Sponsor (as vendor of the Initial Portfolio), as part of the purchase price payable for the sale of
PRINCIPAL STAPLED SECURITYHOLDERS AND THEIR HOLDINGS
The following table sets out the principal Stapled Securityholders and their holdings after the
Offering and the issuance of the Sponsor Stapled Securities and Cornerstone Stapled Securities:
The total number of Stapled Securities in issue immediately after the completion of the Offering
is 1,308,600,000 Stapled Securities.
Stapled
Securities in
issue as at
the date
of this
Prospectus
Stapled Securities in
issue after the
Offering (assuming
that the Over-
Allotment Option is
not exercised)
Stapled Securities in
issue after the
Offering (assuming
the Over-Allotment
Option is fully
exercised)
Based on the
Offering Price
Based on the
Offering Price
(%) (%) (%)
Overseas Union Enterprise Limited
(1)
1 100 626,782,000 47.9 558,600,000 42.7
Cornerstone
Investors
(2)
Credit Suisse
AG
(3)
125,000,000 9.6 125,000,000 9.6
Others
(4)
122,220,000 9.3 122,220,000 9.3
Public and institutional investors 434,598,000 33.2 502,780,000 38.4
TOTAL 1 100 1,308,600,000 100 1,308,600,000 100
Note:
(1) OUE Realty Pte. Ltd. (OUER) is deemed to be interested in the Sponsor Initial Stapled Security as 55.14% of the
issued share capital of the Sponsor is directly held by OUER. OUERs shareholding percentage is calculated based
on 911,367,860 issued shares (excluding treasury shares) as at the date of the last notice of change of substantial
shareholders interest received by OUE from OUER. As OUER is a wholly-owned subsidiary of Golden Concord Asia
Limited (GCAL) as at the Latest Practicable Date, being 28 June 2013, GCAL is deemed to be interested in the
Sponsor Initial Stapled Security. As GCAL is a wholly-owned subsidiary of Fortune Code Limited (FCL), FCL is
deemed to be interested in the Sponsor Initial Stapled Security. As Lippo ASM Asia Property Limited (LAAPL) is
a majority shareholder of FCL, LAAPL is deemed to be interested in the Sponsor Initial Stapled Security through the
direct and deemed interests of its indirect subsidiary, GCAL.
89
As LAAPL is jointly held by Admiralty Station Management Limited (Admiralty) and Lippo ASM Asia Property LP
(LAAP), Admiralty is deemed to be interested in the Sponsor Initial Stapled Security through the direct and deemed
interests of GCAL, the indirect subsidiary of LAAPL. As ASM Asia Recovery (Master) Fund (AARMF) is a majority
shareholder of Admiralty, AARMF is deemed to have an interest in the Sponsor Initial Stapled Security through the
deemed interest of Admiralty. As ASM Asia Recovery Fund (AARF) is a majority shareholder of AARMF, AARF is
deemed to be interested in the Sponsor Initial Stapled Security through the deemed interest of its indirect subsidiary,
Admiralty. As Argyle Street Management Limited (ASML) manages AARF, ASML is deemed to be interested in the
Sponsor Initial Stapled Security through the deemed interest of AARFs indirect subsidiary, Admiralty. As Argyle
Street Management Holdings Limited (ASMHL) is the ultimate holding company of ASML, ASMHL is deemed to be
interested in the Sponsor Initial Stapled Security through the deemed interest of Admiralty. As Kin Chan (KC) is
the beneficial holder of more than 20.0% of the issued share capital of ASMHL, KC is deemed to be interested in
the Sponsor Initial Stapled Security through the deemed interest of Admiralty. As V-Nee Yeh (VY) is the beneficial
holder of more than 20.0% of the issued share capital of ASMHL, VY is deemed to be interested in the Sponsor Initial
Stapled Security through the deemed interest of Admiralty.
As LAAPL is jointly held by Admiralty and LAAP, LAAP is deemed to be interested in the Sponsor Initial Stapled
Security through the direct and deemed interests of GCAL, the indirect subsidiary of LAAPL. As Lippo General
Partner Limited (LGP), being the general partner of LAAP, manages, controls the operation of and determines the
policy with respect to LAAP, LGP has a deemed interest in the Sponsor Initial Stapled Security through the deemed
interest of LAAP. As LGP is a wholly owned subsidiary of HKC Property Investment Holdings Limited (HKC), HKC
is deemed to be interested in the Sponsor Initial Stapled Security through the deemed interest of LAAP. As HKC is
a wholly owned subsidiary of Hongkong Chinese Limited (HCL), HCL is deemed to be interested in the Sponsor
Initial Stapled Security through the deemed interest of LAAP. As Hennessy Holdings Limited (Hennessy) is a
majority shareholder of HCL, Hennessy is deemed to be interested in the Sponsor Initial Stapled Security through
the deemed interest of LAAP. As Hennessy is a wholly owned subsidiary of Prime Success Limited (PSL), PSL is
deemed to be interested in the Sponsor Initial Stapled Security through the deemed interest of LAAP. As PSL is a
wholly owned subsidiary of Lippo Limited (LL), LL is deemed to be interested in the Sponsor Initial Stapled Security
through the deemed interest of LAAP. As Lippo Capital Limited (LCL) is a majority shareholder of LL, LCL is
deemed to be interested in the Sponsor Initial Stapled Security through the deemed interest of LAAP. As Lanius
Limited (Lanius) is the ultimate holding company of LCL, Lanius is deemed to be interested in the Sponsor Initial
Stapled Security through the deemed interest of LAAP.
(2) Based on the Cornerstone Subscription Agreements (as defined herein), save for Credit Suisse AG, which has
entered into the cornerstone subscription agreement on behalf of certain clients of its Private Banking & Wealth
Management Division, none of the Cornerstone Investors will be a Substantial Stapled Securityholder immediately
upon the completion of the Offering. Separately, each of Credit Suisse AGs clients will not be a Substantial Stapled
Securityholder immediately upon the completion of the Offering.
(3) Credit Suisse AG has entered into the cornerstone subscription agreement to subscribe for Stapled Securities, on
behalf of certain clients of its Private Banking & Wealth Management division.
(4) Other than Credit Suisse AG, the Cornerstone Investors are Goldhill, Mr Gordon Tang, Lucille Holdings Pte Ltd and
Splendid Asia Macro Asia Fund. There are no other Cornerstone Investors.
LOCK-UPS
The Sponsor has agreed to a lock-up arrangement during the Lock-up Period in respect of 100.0%
of its effective interest in the Lock-up Stapled Securities, subject to certain exceptions.
The Managers have also undertaken not to offer, issue or contract to issue any Stapled Securities,
and the making of any announcements in connection with any of the foregoing transactions,
during the period which commences from the Listing Date until the date falling 180 days after the
Listing Date (both dates inclusive), subject to certain exceptions.
(See Plan of Distribution Lock-up Arrangements for further details.)
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SUBSCRIPTION BY THE CORNERSTONE INVESTORS
In addition, concurrently but separate from the Offering, each of the Cornerstone Investors has
entered into a subscription agreement to subscribe for an aggregate of 247,220,000 Stapled
Securities at the Offering Price conditional upon the Underwriting Agreement having been entered
into, and not having been terminated, pursuant to its terms on or prior to the Settlement Date.
Information on the Cornerstone Investors
Credit Suisse AG
Credit Suisse AG is domiciled in Switzerland and is a wholly owned subsidiary of Credit Suisse
Group AG which is listed on the SIX Swiss Exchange (ISIN: CH0012138530). Credit Suisse AGs
business consists of the two divisions of Private Banking & Wealth Management and Investment
Banking. Credit Suisse AGs Private Banking & Wealth Management division offers
comprehensive advice and a broad range of private banking and wealth management solutions,
including those which are tailored to the needs of high-net-worth and ultra-high-net-worth
individuals worldwide; in Switzerland, it supplies banking products and services to individual
clients, including affluent, high-net-worth and ultra-high-net-worth clients, and to corporates and
institutions. Credit Suisse AG has entered into the cornerstone subscription agreement to
subscribe for stapled Securities, on behalf of certain clients of its Private Banking & Wealth
Management division.
Goldhill
Goldhill is a group which focuses on property development and related activities since 1963, and
wholly owns One North Bridge Pte Ltd via Goldhill Developments Pte Ltd. Goldhill Developments
Pte Ltd is wholly owned by Mr. William Goei, his spouse (Madam Tan May Lee) and his family
(including Goei Beng Yian Magdeline).
Mr Gordon Tang
Mr. Gordon Tang is a Non-Executive Director of SGX-Catalist listed, SingHaiyi Group Limited
which specialises in property development, real estate investment, real estate co-investing,
property trading and real estate management services.
Lucille Holdings Pte Ltd
Lucille Holdings Pte Ltd (LHPL) is an investment holding company of the Lee family and invests
in equities, bonds, gold, real estate, and currencies. It is incorporated in the Republic of
Singapore, of which the principle shareholders are Rodney Lee and Alan Lee who serve as
directors. The remainder of the shares in LHPL are held by six other family members.
Splendid Asia Macro Fund
Splendid Asia Macro Fund is a Cayman Island registered fund managed by Charlie Chan Capital
Partners Pte. Ltd. The fund is a multi-strategy macro fund with a focus in Asia.
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SUBSCRIPTION BY THE REIT MANAGER DIRECTORS AND THE TRUSTEE-MANAGER
DIRECTORS
The REIT Manager Directors and Trustee-Manager Directors may subscribe for the Stapled
Securities under the Public Offer and/or the Placement Tranche. Save for the REIT Managers and
the Trustee-Managers respective internal policies, which prohibit the REIT Manager Directors
and the Trustee-Manager Directors from dealing in the Stapled Securities at certain times, there
are no restrictions on the REIT Manager Directors or the Trustee-Manager Directors disposing of
or transferring all or any part of their Stapled Securities. (See Management and Corporate
Governance OUE H-REIT Dealings in Stapled Securities or as the case may be, OUE H-REIT
Units and Management and Corporate Governance OUE H-BT Dealings in Stapled
Securities or as the case may be, OUE H-BT Units for further details.)
SUBSCRIPTION FOR MORE THAN 5.0% OF THE STAPLED SECURITIES
Save as disclosed in this Prospectus, to the Managers knowledge, as at the Latest Practicable
Date, being 28 June 2013, no person intends to subscribe for more than 5.0% of the Stapled
Securities in the Offering. The final allocation of the Stapled Securities will be in accordance with
the Stapled Securities holding spread and distribution guidelines as set out in Rule 210 of the
Listing Manual.
OPTIONS ON STAPLED SECURITIES
No option to subscribe for the Stapled Securities has been granted to any of the REIT Manager
Directors, the REIT Manager Executive Officers, the Trustee-Manager Directors or the Trustee-
Manager Executive Officers.
92
DISTRIBUTIONS
It should be noted that the total distributions available to Stapled Securityholders is an aggregate
of the distributions from OUE H-REIT and OUE H-BT, and is thus dependent on the financial
performance of OUE H-REIT and OUE H-BT respectively, instead of the consolidated financial
performance of OUE H-REIT and OUE H-BT.
DISTRIBUTION POLICY OF OUE H-REIT
OUE H-REITs current distribution policy is to distribute at least 90.0% of its Taxable Income,
comprising substantially its income from the letting of the Initial Portfolio and related property
services income after deduction of allowable expenses and allowances. However, OUE H-REIT
will distribute 100.0% of its Taxable Income for Forecast Period 2013 and Projection Year 2014.
Thereafter, OUE H-REIT will distribute at least 90.0% of its Taxable Income, with the actual level
of distribution to be determined at the REIT Managers discretion after having considered OUE
H-Trusts funding requirements, other capital management considerations, and the overall
stability of distributions. Distributions, when paid, will be in Singapore dollars.
After OUE H-Trust has been admitted to the Main Board of the SGX-ST, OUE H-REIT will make
distributions to Stapled Securityholders on a quarterly basis, with the amount calculated as at 31
March, 30 June, 30 September and 31 December each year for the three-month period ending on
each of the said dates. OUE H-REITs first distribution after the Listing Date will be for the period
from the Listing Date to 31 December 2013 and will be paid by the REIT Manager on or before 31
March 2014. Subsequent distributions will take place on a quarterly basis. Under the OUE H-REIT
Trust Deed, the REIT Manager is required to pay distributions within 90 days after the end of each
distribution period.
In the event that there are gains arising from sales of real properties and/or shares, and only if
such gains are surplus to the business requirements and needs of OUE H-REIT and its taxability
or otherwise confirmed by the IRAS, the REIT Manager may, at its discretion, direct the REIT
Trustee to distribute such gains. Such gains, if not distributed, will form part of the OUE H-REIT
Deposited Property.
OUE H-REITs primary source of liquidity to fund distributions, servicing of debt, payment of
Property Expenses and capital expenditures will be from the receipts from rental income and
borrowings.
OUE H-REITs ability to make distributions will be subject to its available cash flow. Where the cash
flow generated from operations is not sufficient to meet the distributions of OUE H-REIT, OUE
H-REIT may incur borrowings for the purpose of funding such distributions. OUE H-REITs ability to
borrow is, however, limited by the Property Funds Appendix and the availability of debt financing.
Under the Property Funds Appendix, if the REIT Manager declares a distribution that is in excess
of profits, the REIT Manager should certify, in consultation with the REIT Trustee, that it is satisfied
on reasonable grounds that, immediately after making the distribution, OUE H-REIT will be able
to fulfil, from the OUE H-REIT Deposited Property, the liabilities of OUE H-REIT as they fall due.
The certification by the REIT Manager should include a description of the distribution policy and
the measures and assumptions for deriving the amount available to be distributed from the OUE
H-REIT Deposited Property. The certification should be made at the time the distribution is
declared.
DISTRIBUTION POLICY OF OUE H-BT
As at the Listing Date, OUE H-BT will be dormant.
In the event OUE H-BT becomes active and profitable, OUE H-BTs distribution policy will be to
distribute as much of its income as practicable, and the determination to distribute and the
quantum of distributions to be made by OUE H-BT will be determined by the Trustee-Manager
Board at its sole discretion.
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CAPITALISATION AND INDEBTEDNESS
The following table sets forth the pro forma capitalisation of OUE H-Trust and OUE H-REIT as at
the Listing Date and after application of the net proceeds from the Offering and the issuance of
Cornerstone Stapled Securities and the Consideration Stapled Securities, based on the Offering
Price and the expected drawdowns under the OUE H-REIT Debt Facilities. The information in the
table below should be read in conjunction with Use of Proceeds.
CAPITALISATION
(1)
OUE H-Trust
As at the
Listing Date
Based on the
Offering Price
(2)
(S$000)
Total debt 587,000
Stapled Securityholders funds 1,151,568
TOTAL CAPITALISATION 1,738,568
OUE H-REIT
As at the
Listing Date
Based on the
Offering Price
(2)
(S$000)
Total debt 587,000
OUE H-REIT Units in issue 1,151,548
TOTAL CAPITALISATION 1,738,548
Notes:
(1) No capitalisation is presented for OUE H-BT as it is dormant as at the Listing Date.
(2) Based on an acquisition consideration of S$1,705 million for the Initial Portfolio.
INDEBTEDNESS
OUE H-REIT
Prior to the Listing Date, the REIT Trustee (the Borrower) will, on behalf of OUE H-REIT, put in
place the OUE H-REIT Debt Facilities, comprising Term Loan Facilities and a Revolving Credit
Facility secured by:
a registered first legal mortgage over Mandarin Orchard Singapore and Mandarin Gallery;
a legal assignment of all insurance taken by OUE H-REIT in respect of Mandarin Orchard
Singapore and Mandarin Gallery except public liability insurance;
94
an assignment of all rights, titles, benefits and interests in connection with any lease, tenancy
or property management agreements entered into by OUE H-REIT and lease or tenancy
deposits/proceeds in respect of Mandarin Gallery;
an assignment of all rights, titles, benefits and interests in connection with any master leases
entered into by OUE H-REIT and lease or tenancy deposits/proceeds in connection with such
master lease in respect of Mandarin Orchard Singapore; and
a debenture incorporating a fixed and floating charge over generally all of the present and
future assets of OUE H-REIT in connection with Mandarin Orchard Singapore and Mandarin
Gallery.
An amount of S$587.0 million of the Term Loan Facilities will be drawn down on the Listing Date
to partially fund the acquisition of the Initial Portfolio.
The Term Loan Facilities will be used to partly finance the acquisition of the Initial Portfolio and
the Revolving Credit Facility will gradually be drawn down to be utilised for capital expenditure
needs of the Hotel and working capital of OUE H-REIT.
The Initial Portfolio is currently subject to a charge pursuant to S$750.0 million in borrowings,
comprising a S$450.0 million facility and S$300.0 million in secured notes. Such borrowings will
be repaid with the security discharged on the Listing Date.
On the Listing Date, the Borrower will draw down on the Term Loan Facilities an amount of
S$587.0 million which will give OUE H-REIT an Aggregate Leverage of up to 33.2% as at the
Listing Date. In addition, the Borrower has an undrawn Revolving Credit Facility.
The OUE H-REIT Debt Facilities will be repayable in full at the end of the respective three-year
and five-year tenures, although the Borrower has the option to make prepayments without any
prepayment penalty.
The Borrower has fixed the interest rates for the S$587.0 million loan at an average rate of
approximately 2.2% per annum via interest rate swaps, which have a weighted average tenure of
three years.
The OUE H-REIT Debt Facilities include certain negative undertakings that, (subject to certain
customary and other agreed exceptions), limit the ability of the Borrower to, among other things,
create or permit to subsist any mortgage, pledge, lien, hypothecation, assignment or any other
encumbrance whatsoever on or over the Borrowers interest in Mandarin Orchard Singapore and
Mandarin Gallery.
The OUE H-REIT Debt Facilities also contain certain financial covenants which are typical of
financing of such nature. The material covenants require that:
the total indebtedness secured against the Initial Portfolio is not more than 60.0% of the fair
market value of the Initial Portfolio;
the initial property interest cover ratio shall not be less than 1.75 times;
OUE H-REIT shall at all times adhere to the gearing limit prescribed under the Property
Funds Appendix;
OUE H-REIT shall not terminate the Master Lease; and
the Property Manager shall at all times be OUE or any of its affiliates or any property
manager of reputable standing.
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In addition, the OUE H-REIT Debt Facilities contain two change of control provisions, namely
that:
OUE H-Trust shall not be less than 20.0% owned by the Sponsor at all times; and
the REIT Manager shall be no less than 51.0% owned (directly or indirectly) by the Sponsor,
unless with prior agreement from the majority lenders.
OUE H-BT
As at the Listing Date, OUE H-BT will be dormant and will not have any debt facilities in place.
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OUE H-REIT
The following tables present Unaudited Pro Forma Financial Information based on the Offering
Price, assuming that the Over-Allotment Option is fully exercised.
The Reporting Auditors, KPMG LLP, have reported on the Unaudited Pro Forma Financial
Information and their report is included in Appendix B, Reporting Auditors Report on the
Unaudited Pro Forma Financial Information. The Unaudited Pro Forma Financial Information has
been prepared on the basis of the assumptions and accounting policies set out in Appendix C,
Unaudited Pro Forma Financial Information, and should be read together with these
assumptions and accounting policies.
The unaudited pro forma statements of total return of OUE H-REIT for FY2010, FY2011, FY2012,
1Q2012 and 1Q2013 reflect the total return of OUE H-REIT assuming the Offering, the acquisition
of the Initial Portfolio, the Master Lease Agreement, the Individual Property Management
Agreement and the fee arrangements of the REIT Manager, the REIT Trustee and the Property
Manager as set out in Overview Certain Fees and Charges (the Fee Arrangements) had
occurred or were effective on 1 January 2010 under the same terms as set out in the Prospectus.
The unaudited pro forma statements of financial position of OUE H-REIT as at 31 December 2012
and 31 March 2013 present the financial position of OUE H-REIT assuming the Offering, the
acquisition of the Initial Portfolio, the Master Lease Agreement, the Individual Property
Management Agreement and the Fee Arrangements had occurred or were effective on 31
December 2012 and 31 March 2013, respectively, under the same terms set out in the Prospectus.
The unaudited pro forma cash flow statement of OUE H-REIT for FY2012 and 1Q2013 shows the
cash flows of OUE H-REIT assuming the Offering, the acquisition of the Initial Portfolio, the Master
Lease Agreement, the Individual Property Management Agreement and the Fee Arrangements
had occurred or were effective on 1 January 2012 under the same terms set out in the Prospectus.
The objective of the Unaudited Pro Forma Financial Information is to show what the total return,
cash flows and financial position might have been had OUE H-REIT existed at an earlier date.
However, the Unaudited Pro Forma Financial Information of OUE H-REIT is not necessarily
indicative of the total return and cash flows of the operations or financial position that would have
been attained had OUE H-REIT actually existed earlier. The Unaudited Pro Forma Financial
Information has been prepared for illustrative purposes only and, because of its nature, may not
give a true picture of the actual total return, cash flows or financial position of OUE H-REIT.
OUE H-BT AND OUE H-TRUST
No pro forma financial information of OUE H-BT has been presented as it is newly established and
will be dormant as at the Listing Date. Accordingly, no consolidated pro forma financial information
of OUE H-Trust has been presented.
97
The unaudited pro forma financial information for OUE H-REIT, based on the Offering Price,
assuming that the Over-Allotment Option is fully exercised, is as follows:
UNAUDITED PRO FORMA STATEMENTS OF TOTAL RETURN
(1)
OF OUE H-REIT
FY2010 FY2011 FY2012 1Q2012 1Q2013
S$000 S$000 S$000 S$000 S$000
Gross revenue 95,970 107,593 107,811 26,764 26,633
Property expenses (15,118) (13,524) (12,886) (3,817) (3,022)
REIT Managers base
management fees (5,349) (5,358) (5,353) (1,339) (1,338)
REIT Managers performance
fees (3,234) (3,763) (3,797) (918) (944)
Finance income 44 53 49 13 12
Finance expense (14,597) (14,597) (14,597) (3,649) (3,405)
Net income 55,288 67,905 68,729 16,430 17,312
year/period 103,348 67,905 68,729 16,430 17,312
(Less)/Add: Net tax
adjustments
(2)
(40,619) 12,895 13,010 3,234 2,553
Income available for distribution 62,729 80,800 81,739 19,664 19,865
Notes:
fees payable in Stapled Securities, the REIT Trustees fee, gain on revaluation of investment properties,
amortisation of debt-related transaction costs and straight-lining of rental income for all periods presented.
98
UNAUDITED PRO FORMA STATEMENTS OF FINANCIAL POSITION
(1)
OF OUE H-REIT
As at
31 December
2012
As at
31 March
2013
S$000 S$000
Non-current assets
Current assets
12,258 12,155
Total assets 1,768,258 1,768,155
Current liabilities
Borrowings (secured) 581,130 581,130
585,632 585,632
Net assets 1,181,164 1,181,164
Represented by:
Unitholders funds 1,181,164 1,181,164
Number of OUE H-REIT Units in issue (000) 1,308,600 1,308,600
Net asset value per OUE H-REIT Unit (S$) 0.903 0.903
Note:
99
UNAUDITED PRO FORMA STATEMENTS OF CASH FLOWS
(1)
OF OUE H-REIT
FY2012
S$000
1Q2013
S$000
Adjustments for:
Finance expense
(2)
14,597 3,649
REIT Managers base management fees paid/payable in
Stapled Securities 5,291 1,322
Acquisition of properties and related assets and liabilities,
including acquisition costs (1,148,049)
Payment of transaction costs relating to issuance of units (21,309)
Net increase/(decrease) in cash and cash equivalents 33,411 (785)
year/period 33,411
Cash and cash equivalents at end of the year/period 33,411 32,626
Notes:
100
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Unaudited Pro Forma Financial
Information of OUE H-REIT, and notes thereto, included elsewhere in this Prospectus.
Statements contained in this Managements Discussion and Analysis of Financial Condition and
Results of Operations that are not historical facts may be forward-looking statements. Such
statements are subject to certain risks, uncertainties and assumptions which could cause actual
results to differ materially from those projected. Under no circumstances should the inclusion of
such information herein be regarded as a representation, warranty or prediction with respect to the
accuracy of the underlying assumptions by the REIT Manager, the Trustee-Manager, or any other
person, or that these results will be achieved or are likely to be achieved. (See Forward-Looking
Statements and Risk Factors for further details.) Recipients of this Prospectus and all
prospective investors in the Stapled Securities are cautioned not to place undue reliance on these
forward-looking statements.
The Unaudited Pro Forma Financial Information of OUE H-REIT has been prepared for illustrative
purposes only, and is based on certain assumptions after making certain adjustments to show
what:
(i) the Unaudited Pro Forma Statements of Total Return for the Relevant Period would have
been if the Offering, the acquisition of the Initial Portfolio, the Master Lease Agreement, the
Individual Property Management Agreement and the Fee Arrangements had occurred on or
were effective on 1 January 2010 under the same terms as set out in the Prospectus;
(ii) the Unaudited Pro Forma Statements of Financial Position as at 31 December 2012 and 31
March 2013 would have been if the Offering, the acquisition of the Initial Portfolio, the Master
Lease Agreement, the Individual Property Management Agreement and the Fee
Arrangements had occurred on or were effective on 31 December 2012 and 31 March 2013,
respectively; and
(iii) the Unaudited Pro Forma Statements of Cash Flows for FY2012 and 1Q2013 would have
been if the Offering, the acquisition of the Initial Portfolio, the Master Lease Agreement, the
Individual Property Management Agreement and the Fee Arrangements had occurred on or
were effective on 1 January 2012.
The Unaudited Pro Forma Financial Information is not necessarily indicative of the results of the
operations or the financial position that would have been attained had the Offering, the acquisition
of the Initial Portfolio, the Master Lease Agreement, the Individual Property Management
Agreement and the Fee Arrangements actually occurred in the relevant periods. The Unaudited
Pro Forma Financial Information, because of its nature, may not give a true or accurate picture of
OUE H-REITs actual total returns or financial position.
The following discussion and analysis of the financial condition and results of operations is based
on and should be read in conjunction with the Unaudited Pro Forma Financial Information, and
related notes thereto, which are included elsewhere in this Prospectus.
(See Appendix C, Unaudited Pro Forma Financial Information for further details.)
101
GENERAL BACKGROUND
OUE H-REIT is a Singapore-based REIT established pursuant to the OUE H-REIT Trust Deed. As
OUE H-REIT was only established on 10 July 2013, OUE H-REIT has no historical operating
results and financial information based on which recipients of this Prospectus may evaluate OUE
H-REIT. OUE H-REITs first accounting period will be from 10 July 2013, the date of its
establishment, to 31 December 2013.
OUE H-REIT is established with the principal investment strategy of investing, directly or
assets.
OUE H-REIT
As at the Listing Date, the Initial Portfolio will comprise a 100.0% interest in Mandarin Orchard
Singapore and Mandarin Gallery. As at the Listing Date, the Vendor of Mandarin Orchard
Singapore, the Sponsor, will be the Master Lessee of Mandarin Orchard Singapore. The term of
the Master Lease Agreement is for a period of 15 years, with an option for the Master Lessee to
obtain an additional lease for a further term of 15 years on the same terms and conditions, save
for amendments required due to a change in law and without any further option to renew. The
Master Lease Agreement contains a long lease term with a view to securing stable distributions
to the Stapled Securityholders.
OUE H-REIT may be unable to appoint a master lessee for Mandarin Orchard Singapore at the
expiry of the Master Lease Agreement, for example, because of a failure to reach commercially
favourable terms with the Master Lessee or potential new master lessees. In the event that this
happens, in order to ensure Mandarin Orchard Singapores continued operation and revenue
generation, OUE H-REIT will appoint OUE H-BT as a master lessee for Mandarin Orchard
Singapore on substantially the same terms as the Master Lease Agreement.
In relation to Mandarin Orchard Singapore, the Master Lessee will appoint the Hotel Manager to
manage the day-to-day operations and marketing of Mandarin Orchard Singapore. On the Listing
Date, Singapore Mandarin International Hotels Pte Ltd, a company incorporated on 14 December
1978, will be appointed by the Master Lessee as the Hotel Manager.
directly, with the leases existing as at the Listing Date being assigned and/or novated to OUE
H-REIT on or prior to the Listing Date. Property management, lease management and marketing
activities at Mandarin Gallery will be the responsibility of the Property Manager, which may decide,
at its discretion, whether to carry out these tasks by itself or to delegate any or all of them to a third
party. Any fees or commissions payable to the Property Manager or such third parties are to be
borne by OUE H-REIT.
OUE H-BT
No pro forma financial information of OUE H-BT has been presented as it was newly established
on 10 July 2013 and will be dormant as at the Listing Date. Accordingly, no consolidated pro forma
financial information of OUE H-Trust has been presented.
102
The Initial Portfolio
Mandarin Orchard Singapore is a renowned upscale hotel with strong brand recognition given its
relatively long history of operations in Singapore. An icon of world class hospitality in Singapore
since 1971, it features 1,051 rooms, five F&B outlets, and approximately 25,511 sq ft of meeting
and function space with a capacity of up to 1,840 people. The Hotel is one of the top
accommodation choices in Singapore for leisure and business travellers globally, having won
numerous internationally recognised awards including the 2012 World Luxury Hotel Awards for
Singapore.
Mandarin Gallery
Mandarin Gallery is positioned as a high-end fashion mall and a tailored destination for its specific
target audience. Its unique positioning has attracted like-minded premium brands such as Paul
Smith, Y-3, Fred Perry Laurel Wreath and Bathing Ape. Mandarin Gallery has a total of 86 local
and international tenants occupying 97 shops as at 31 March 2013. The leasing strategy to
minimise brand duplication with neighbouring malls creates a distinct identity which is a source of
competitive advantage for the Mall. The ground floor of this high-end fashion mall benefits from
Mandarin Orchard Singapore. The Mall comprises four levels of high-end boutiques, shops and
restaurants, and is complemented by Mandarin Orchard Singapore to collectively provide an
integrated hospitality and retail experience for shoppers and hotel guests.
Acquisition of the Initial Portfolio
As at the date of this Prospectus, the REIT Trustee, as trustee of OUE H-REIT, has entered into
the Property Sale and Purchase Agreement with the Vendor for the sale of the Initial Portfolio to
OUE H-REIT at a purchase price which shall be based on the final Offering Price and subject to
a minimum purchase price of S$1,705 million and a maximum purchase price of S$1,730 million.
OUE H-REIT will fund the purchase price in a combination of cash and by the issue of 626,781,999
Consideration Stapled Securities.
Property Sale and Purchase Agreement and Use of Proceeds for further details.)
FACTORS AFFECTING OUE H-REITS RESULTS OF OPERATIONS
Gross Revenue and Net Property Income of OUE H-REIT
The gross revenue of OUE H-REIT (Gross Revenue) consists of (i) Lease Income (as defined
herein) from Mandarin Orchard Singapore under the Master Lease Agreement and (ii) Retail
Income (as defined herein) from Mandarin Gallery. Retail Income is derived from leasing out
individual retail units within Mandarin Gallery directly to individual tenants.
103
The Gross Revenue for OUE H-REIT for the Relevant Period is as follows.
FY2010 FY2011 FY2012 1Q2012 1Q2013
$000 $000 $000 $000 $000
Mandarin Orchard Singapore 63,988 73,762 75,060 18,424 18,036
Mandarin Gallery 31,982 33,831 32,751 8,340 8,597
Gross Revenue 95,970 107,593 107,811 26,764 26,633
The Net Property Income for OUE H-REIT for the Relevant Period is as follows.
FY2010 FY2011 FY2012 1Q2012 1Q2013
$000 $000 $000 $000 $000
Mandarin Orchard Singapore 61,836 70,721 71,484 17,531 17,141
Net Property Income 80,852 94,069 94,925 22,947 23,611
Lease Income from Mandarin Orchard Singapore under the Master Lease Agreement
OUE H-REIT will receive lease income under the terms of the Master Lease Agreement,
comprising a Fixed Rent and a Variable Rent (Lease Income).
The Fixed Rent and Variable Rent of Mandarin Orchard Singapore are set out in the table below:
Fixed Rent
(S$ million)
Variable Rent
Percentage
of Gross
Operating
Revenue +
Percentage
of Gross
Operating
Profit
Fixed Rent
(S$ million)
Mandarin Orchard
Singapore 45.0 33.0% 27.5% 45.0
The percentage pegged to Mandarin Orchard Singapores Gross Operating Revenue and Gross
Operating Profit are set at 33.0% and 27.5%, respectively.
Should the calculation of the Variable Rent yield a negative figure, the Variable Rent will be zero.
Retail income from Mandarin Gallery
Retail income (Retail Income) consists of:
retail rental income; and
other income attributable to the operation of Mandarin Gallery.
The retail leases primarily have tenures ranging from two to five years.
104
The following table sets out details of Mandarin Gallerys pro forma Retail Income for the Relevant
Period:
FY2010 FY2011 FY2012 1Q2012 1Q2013
$000 $000 $000 $000 $000
Retail rental income 30,740 31,888 31,353 7,968 8,212
Other income 1,242 1,943 1,398 372 385
Retail Income 31,982 33,831 32,751 8,340 8,597
Retail rental income
Retail rental income consists of:
Basic rent which includes (i) base rent (after rent rebates, refunds, credits or discounts and
rebates for rent-free periods, where applicable, but excluding turnover rent), (ii) service
charges payable by tenants towards covering the operation and property maintenance
expenses of Mandarin Gallery and (iii) advertising and promotion charges payable by tenants
for advertising and promotional activities for Mandarin Gallery (Basic Rent); and
Turnover rent which is generally calculated as a percentage of the tenants gross turnover.
In some cases, turnover rent may be subject to certain thresholds before it is payable
(Turnover Rent).
Other income
Other income comprises licence fees, casual leasing, recovery of utility expenses from the tenants
and other miscellaneous income attributable to the operation of Mandarin Gallery.
Property Expenses
Property Expenses consist of (i) property taxes, (ii) property management fee and (iii) other
property operating expenses.
Property taxes
Property tax for Mandarin Orchard Singapore
For Mandarin Orchard Singapore, property tax is payable at 10.0% of the total annual value of
Mandarin Orchard Singapore. The annual value of hotel rooms is assessed on a fixed percentage
of gross hotel room receipts for the preceding year. With effect from 1 January 2011, the annual
value of hotel rooms will be set at 25.0% of the preceding years gross room receipts.
For the purposes of preparing the Unaudited Pro Forma Financial Information, property tax is
based on 10.0% of the annual value of the Hotel, and adjusted to exclude overprovisions or
underprovisions in respect of prior years, for the periods presented.
Property tax for Mandarin Gallery
For Mandarin Gallery, property tax is payable at 10.0% of the annual value of the property, and
adjusted to exclude overprovisions or underprovisions in respect of prior years, for the periods
presented.
105
Property management fee
Pursuant to the Individual Property Management Agreement, the Property Manager is entitled to
the following property management fee for Mandarin Gallery and the Excluded Commercial
Premises which comprises the following:
(i) 2.0% per annum of gross revenue;
(ii) 2.0% per annum of the net property income for Mandarin Gallery and the Excluded
Commercial Premises (calculated before accounting for the property management fee in that
(iii) 0.5% per annum of the net property income for Mandarin Gallery and the Excluded
financial period) in lieu of leasing commissions otherwise payable to the Property Manager
and/or third party agents
1
.
Other property operating expenses
Other property operating expenses include marketing expenses, utilities, insurance, property
maintenance expenses and other miscellaneous expenses in relation to the Initial Portfolio.
REIT Managers management fees
Pursuant to the OUE H-REIT Trust Deed, the REIT Manager is entitled to a Base Fee of 0.3% per
annum of the value of OUE H-REITs Deposited Property and a Performance Fee of 4.0% per
annum of OUE H-REITs Net Property Income. For the purposes of the Unaudited Pro Forma
Financial Information, it is assumed that 100.0% of the REIT Managers management fees were
paid in the form of Stapled Securities.
(See Management and Corporate Governance OUE H-REIT Fees Payable to the REIT
Manager Management fees payable to the REIT Manager for further details.)
REIT Trustees fees
The REIT Trustees fees are charged at a flat fee of 0.015% per annum of the value of the OUE
H-REIT Deposited Property for the first 12 months (commencing from the date of inception of OUE
H-REIT), and subsequently on a scaled basis of up to 0.02% per annum of the value of the OUE
H-REIT Deposited Property if the value of the OUE H-REIT Deposited Property is at least S$1.0
billion, subject to a minimum of S$20,000 per month, excluding out-of-pocket expenses and GST.
The fees are accrued and paid monthly in arrears in accordance with the OUE H-REIT Trust Deed.
The REIT Trustee will also be paid a one-time inception fee of S$20,000.
1 The Property Manager will bear the leasing commission payable to third parties as it receives 0.5% per annum of
the net property income for the relevant property in lieu of leasing commissions otherwise payable to the Property
Manager and/or third party agents. All the other fees and/or commissions payable to third parties arising from
rendering services to the property will be borne by OUE H-REIT with the prior approval of the REIT Manager and
REIT Trustee.
106
Trustee-Managers fees
Pursuant to the OUE H-BT Trust Deed, the Trustee-Manager is entitled to:
(a) a management fee comprising 10.0% of the profit of OUE H-BT before interest and tax in the
relevant financial year (calculated before accounting for this management fee in that
financial year), payable in the event that OUE H-BT becomes active; and
(b) a trustee fee of a maximum of 0.1% per annum of the value of the OUE H-BT Trust Property
if any, provided that the value of the OUE H-BT Trust Property is at least S$50.0 million and
OUE H-BT has become active.
For the purposes of the Unaudited Pro Forma Financial Information, it has been assumed that
OUE H-BT is dormant and the value of the OUE H-BT Trust Property is less than S$50.0 million,
and that, as a result, no Trustee-Manager fees are payable.
(See The Formation and Structure of OUE H-Trust, OUE H-REIT and OUE H-BT The Formation
and Structure of OUE H-REIT The REIT Trustee Remuneration of the REIT Trustee and
Management and Corporate Governance OUE H-BT Fees Payable to the Trustee-Manager
for further details).
Other trust expenses
Other trust expenses of OUE H-REIT include recurring trust expenses such as annual listing fees,
valuation fees, legal fees, registry and depository charges, accounting, audit and tax advisers
fees, postage, printing and stationery costs, costs associated with the preparation of annual
reports, investor communications costs and other miscellaneous expenses.
Finance expense
Finance expense consists of interest expense, amortisation of debt-related transaction costs and
other bank charges and fees.
Income available for distribution
The income available for distribution to Stapled Securityholders is derived by adding back the
following items to the net income after tax of OUE H-REIT:
(a) 100.0% of the REIT Managers management fees, which are paid or payable to the REIT
Manager in the form of Stapled Securities at the prevailing market price
1
instead of cash; and
(b) The REIT Trustees fees and amortisation of the upfront debt arrangement fee, each of which
are items that are non-deductible for tax purposes, and deducting the gain on revaluation of
investment properties, where applicable.
1 For the purpose of the Unaudited Pro Forma Financial Information, this is assumed to be the Offering Price.
107
Comparison of OUE H-REITs Performance
FY2011 over FY2010
Gross Revenue
The Gross Revenue of the Initial Portfolio increased by approximately 12.1% or S$11.6 million to
S$107.6 million in FY2011 from S$96.0 million in FY2010. Lease income from Mandarin Orchard
Singapore and Retail Income from Mandarin Gallery contributed 84.1% and 15.9%, respectively,
to this increase.
Lease Income from Mandarin Orchard Singapore increased by 15.3% or S$9.8 million to S$73.8
million in FY2011 from S$64.0 million in FY2010.
(See Analysis of the Performance of the Initial Portfolio FY2011 over FY2010 for further
details on the factors contributing to the improvement in performance of Mandarin Orchard
Singapore.)
Retail Income from Mandarin Gallery
Retail Income increased by 5.6% or S$1.8 million to S$33.8 million in FY2011 from S$32.0 million
in FY2010. This was due to an increase in occupancy levels and retail rental income in FY2011.
details on the factors contributing to the improvement in performance of Mandarin Gallery.)
Property Expenses
Property Expenses decreased by 10.6% or S$1.6 million to S$13.5 million in FY2011 from S$15.1
million in FY2010. This was primarily due to higher marketing expenses incurred for the grand
opening of Mandarin Gallery in FY2010.
NPI
NPI increased by 16.3% or S$13.2 million to S$94.1 million in FY2011 from S$80.9 million in
FY2010 as both the financial performance of Mandarin Orchard Singapore and Mandarin Gallery
improved.
The management fees of the REIT Manager increased by 5.8% or S$0.5 million to S$9.1 million
in FY2011 from S$8.6 million in FY2010. The management fees of the REIT Manager were
charged based on a percentage of the value of the OUE H-REIT Deposited Property and NPI. This
is in line with the growth in NPI.
REIT Trustees fees
The REIT Trustees fees remained relatively stable from FY2010 to FY2011 at S$0.3 million as the
underlying value of the OUE H-REIT Deposited Property remained substantially unchanged.
Other trust expenses remained relatively stable from FY2010 to FY2011 at S$2.2 million.
108
Finance expense
Finance expense remained relatively stable from FY2010 to FY2011 at S$14.6 million.
Total return for the year
Total return for the year decreased by 34.3% or S$35.4 million to S$67.9 million in FY2011 from
S$103.3 million in FY2010 due to the gain on revaluation of investment properties that was
recognised in FY2010.
FY2012 over FY2011
Gross Revenue
The Gross Revenue of the Initial Portfolio continued to increase, with an approximate 0.2% or
S$0.2 million increase to S$107.8 million in FY2012 from S$107.6 million in FY2011. The increase
in Gross Revenue was mainly attributed to increase in Lease Income from Mandarin Orchard
Singapore.
Lease Income from Mandarin Orchard Singapore increased by 1.8% or S$1.3 million to S$75.1
million in FY2012 from S$73.8 million in FY2011.
details on the factors contributing to the improvement in performance of Mandarin Orchard
Singapore.)
Retail Income decreased by 3.0% or S$1.0 million to S$32.8 million in FY2012 from S$33.8 million
in FY2011. This was primarily due to a lower average occupancy rate of 96.9% in FY2012 as
compared to 99.5% in FY2011 as a result of vacancy periods from lease replacements.
See Analysis of the Performance of the Initial Portfolio FY2012 over FY2011 for further
details on the factors contributing to the performance of Mandarin Gallery.)
Property Expenses
Property Expenses decreased by 4.4% or S$0.6 million to S$12.9 million in FY2012 from S$13.5
million in FY2011. This was primarily due to lower marketing expenses.
NPI
As a result of the above factors, NPI increased by 0.9% or S$0.8 million to S$94.9 million in
FY2012 from S$94.1 million in FY2011.
The management fees of the REIT Manager increased by 1.1% or S$0.1 million to S$9.2 million
in FY2012 from S$9.1 million in FY2011. The management fees of the REIT Manager were
charged based on a percentage of the value of the OUE H-REIT Deposited Property and NPI. This
is in line with the growth in NPI.
109
REIT Trustees fees
The REIT Trustees fees has remained relatively stable from FY2011 to FY2012 at S$0.3 million
as the underlying value of the OUE H-REIT Deposited Property remained substantially
unchanged.
Other trust expenses remained relatively stable from FY2011 to FY2012 at S$2.2 million.
Finance expense
Finance expense remained relatively stable from FY2011 to FY2012 at S$14.6 million.
Total return for the year
As a result of the above factors, total return for the year increased by 1.2% or S$0.8 million to
S$68.7 million in FY2012 from S$67.9 million in FY2011.
1Q2013 over 1Q2012
Gross Revenue
The Gross Revenue of the Initial Portfolio decreased by approximately 0.7% or S$0.2 million to
S$26.6 million in 1Q2013 from S$26.8 million in 1Q2012. The decrease in Gross Revenue in
1Q2013 as compared to 1Q2012 was mainly attributed to slightly lower Lease Income from
Lease Income from Mandarin Orchard Singapore decreased by 2.2% or S$0.4 million to S$18.0
million in 1Q2013 from S$18.4 million in 1Q2012.
(See Analysis of the Performance of the Initial Portfolio 1Q2013 over 1Q2012 for further
details on the factors contributing to the performance of Mandarin Orchard Singapore.)
Retail Income increased by 3.6% or S$0.3 million to S$8.6 million in 1Q2013 from S$8.3 million
in 1Q2012. This was primarily due to higher rental rates on lease renewals.
(See Analysis of the Performance of the Initial Portfolio 1Q2013 over 1Q2012 for further
details on the factors contributing to the improvement in performance of Mandarin Gallery.)
Property Expenses
Property Expenses decreased by 21.1% or S$0.8 million to S$3.0 million in 1Q2013 from S$3.8
million in 1Q2012. This was due primarily to lower utility costs from lower tariffs and decreased
marketing expenses.
NPI
Despite the slight drop in Gross Revenue, NPI increased by 3.1% or S$0.7 million to S$23.6
million in 1Q2013 from S$22.9 million in 1Q2012 with the improvement in NPI margin.
110
The management fees of the REIT Manager remained relatively stable at S$2.3 million in both
1Q2013 and 1Q2012. The management fees of the REIT Manager were charged based on a
percentage of the value of the OUE H-REIT Deposited Property and NPI.
REIT Trustees fees
The REIT Trustees fees remained relatively stable from 1Q2012 to 1Q2013 at S$0.1 million as the
underlying value of the OUE H-REIT Deposited Property remained substantially unchanged.
Other trust expenses remained relatively stable from 1Q2012 to 1Q2013 at S$0.5 million.
Finance expense
Finance expense decreased by 5.6% or S$0.2 million to S$3.4 million in 1Q2013 from S$3.6
million in 1Q2012 as part of the upfront debt related transaction costs has been fully amortised in
year 2012.
Total return for the period
As a result of the above factors, total return for the period increased by 5.5% or S$0.9 million to
S$17.3 million in 1Q2013 from S$16.4 million in 1Q2012.
Analysis of the Performance of the Initial Portfolio
OUE H-REITs performance is significantly affected by the performance of the underlying hotel
operations and retail operations, which are in turn affected by various factors, including changes
in room rates, revenue mix and occupancy levels for Mandarin Orchard Singapore and rental rates
and average occupancy rate for Mandarin Gallery. The performance of the Initial Portfolio for the
Relevant Period is discussed in more detail below.
Gross Operating Revenue and Gross Operating Profit Trends of Mandarin Orchard
Singapore
The Gross Operating Revenue and Gross Operating Profit of Mandarin Orchard Singapore for the
Relevant Period are set out below:
2010 2011 2012 1Q2012 1Q2013
S$000 S$000 S$000 S$000 S$000
Gross Operating Revenue 133,130 151,096 154,410 37,881 37,451
Operating expenses
(1)
(60,201) (64,184) (66,758) (16,341) (16,807)
Gross Operating Profit 72,929 86,912 87,652 21,540 20,644
Gross Operating Profit margin (%) 54.8 57.5 56.8 56.9 55.1
Note:
(1) Includes costs, energy and utilities and other expenses.
111
Revenue Mix of Mandarin Orchard Singapore
The following table sets out the composition of the Gross Operating Revenue of Mandarin Orchard
Singapore during the Relevant Period:
FY2010 FY2011 FY2012
S$000 % S$000 % S$000 %
Room revenue 82,532 62.0 91,246 60.4 93,605 60.6
F&B revenue 34,086 25.6 40,210 26.6 40,241 26.1
Service charge 11,364 8.5 12,986 8.6 13,326 8.6
Other income 5,148 3.9 6,654 4.4 7,238 4.7
Total 133,130 100.0 151,096 100.0 154,410 100.0
1Q2012 1Q2013
S$000 % S$000 %
Room revenue 23,238 61.3 23,694 63.3
F&B revenue 9,873 26.1 9,265 24.7
Service charge 3,275 8.6 3,291 8.8
Other income 1,495 4.0 1,201 3.2
Total 37,881 100.0 37,451 100.0
The major contributor to the Gross Operating Revenue of Mandarin Orchard Singapore is room revenue.
The customer profile of Mandarin Orchard Singapore by room revenue contribution for the
Relevant Period is as follows:
FY2010 FY2011 FY2012
S$000 % S$000 % S$000 %
Transient
(1)
31,109 37.7 35,434 38.9 42,546 45.5
Corporate
(2)
21,646 26.2 26,859 29.4 24,365 26.0
Wholesale
(3)
29,777 36.1 28,953 31.7 26,694 28.5
Total 82,532 100.0 91,246 100.0 93,605 100.0
1Q2012 1Q2013
S$000 % S$000 %
Transient
(1)
11,321 48.7 13,262 56.0
Corporate
(2)
5,258 22.6 5,364 22.6
Wholesale
(3)
6,659 28.7 5,068 21.4
Total 23,238 100.0 23,694 100.0
Notes:
(1) Transient refers to revenue derived from rental of rooms and suites to individuals or groups occupying less than
10 rooms per night and who do not have contracted annual rates with the Hotel.
(2) Corporate refers to revenue derived from the rental of rooms and suites booked via a corporate or government
entity that has contracted annual rates with the Hotel.
(3) Wholesale refers to revenue derived primarily from the rental of rooms and suites booked via a third party travel
agent on a wholesale contracted rate basis.
112
F&B revenue encompasses revenue from the restaurants, bars, catering services, banquet sales,
room service and room mini-bar sales. Rental income from the leasing of retail outlets to third
parties is recognised as commercial rental revenue.
Service charge refers to the service charge typically levied on room and F&B revenue.
Other income includes primarily carpark revenue and income from provision of telecommunication
services, internet broadband services, laundry services and business centre.
Key Drivers of Hotel Room Revenue
The ADR, occupancy rate and RevPAR for Mandarin Orchard Singapore for the Relevant Period
are as follows:
Mandarin Orchard
Singapore FY2010 FY2011 FY2012 1Q2012 1Q2013
Average Daily Rate (S$) 254.3 277.3 281.5 279.9 266.1
Occupancy Rate (%) 84.6 85.8 86.5 86.8 94.1
RevPAR
(1)
(S$) 215.1 237.9 243.3 243.0 250.5
Note:
(1) RevPAR is computed based on the total room revenue of Mandarin Orchard Singapore divided by the total number
of guest rooms in a hotel less permanent house use rooms (Available Rooms) for the relevant period.
Mandarin Gallery
Retail Income Trends of Mandarin Gallery
Rental rates for Mandarin Gallery are generally fixed in advance for the tenure of the lease and
are subject to review and negotiation on renewal of the lease. The majority of the lease
agreements for Mandarin Gallery does not provide for rent review during the period of the lease.
The following tables set out information on the NLA of Mandarin Gallery as at 31 December 2010,
2011 and 2012 and 31 March 2012 and 2013, as well as the Retail Income, retail rental income,
effective retail rent per sq ft per month, and Net Property Income derived from and the average
occupancy rate for Mandarin Gallery for the Relevant Period:
Mandarin Gallery
FY2010 FY2011 FY2012 1Q2012 1Q2013
S$000 S$000 S$000 S$000 S$000
Net Lettable Area (sq ft) 125,282 125,282 125,282 125,282 125,293
Retail Income 31,982 33,831 32,751 8,340 8,597
Retail rental income 30,740 31,888 31,353 7,968 8,212
Effective retail rent per sq ft
per month (S$) 20.9 21.3 21.5 21.5 22.7
Net Property Income 19,016 23,348 23,441 5,416 6,470
Net Property Income Margin (%) 59.5 69.0 71.6 64.9 75.3
Average occupancy rate (%) 98.0 99.5 96.9 98.7 96.2
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General Commentary on the Performance of the Initial Portfolio
FY2011 over FY2010
The Gross Operating Revenue of Mandarin Orchard Singapore increased by 13.5% to S$151.1
million in FY2011 from S$133.1 million in FY2010, while Gross Operating Profit of Mandarin
Orchard Singapore increased by 19.2% to S$86.9 million in FY2011 from S$72.9 million in
FY2010.
Mandarin Orchard Singapore also achieved a higher occupancy rate of 85.8% in FY2011 as
compared to 84.6% in FY2010, while ADR increased by 9.0% to S$277. This resulted in a RevPAR
of S$238 in FY2011, a 10.7% increase from S$215 in FY2010, resulting in an increase in room
revenue of 10.5% to S$91.2 million in FY2011 from S$82.5 million in FY2010.
The key driver of Mandarin Orchard Singapores revenue growth was the increase in visitor
arrivals and spending, driven in part by strong tourism performance due to major tourist attractions
such as the Integrated Resorts, Universal Studios, the Formula One Singapore Grand Prix and
MICE events.
The increase in leisure demand, coupled with corporate and transient demand, drove occupancy
rates and ADR levels for Mandarin Orchard Singapore in FY2011.
As a result of the above growth drivers, Mandarin Orchard Singapore experienced strong revenue
growth due to the increase in both tourism and corporate-led activities in Singapore, as
demonstrated by an improvement in ADR. This resulted in an increase in the Gross Operating
Profit margin to 57.5% in FY2011 from 54.8% in FY2010.
Mandarin Gallery
Retail Income increased by 5.6% to S$33.8 million in FY2011 from S$32.0 million in FY2010.
Retail rental income increased by 3.9% to S$31.9 million in FY2011 from S$30.7 million in
FY2010. The increase in FY2011 was mainly attributed to higher rental income from higher
Turnover Rent collected and higher average occupancy rate. In FY2011, the average occupancy
rate increased to 99.5% in FY2011 from 98.0% in FY2010. The effective retail rent per sq ft per
month increased from S$20.9 in FY2010 to S$21.3 in FY2011.
Other income increased by 58.3% to S$1.9 million in FY2011 from S$1.2 million in FY2010. This
was due to forfeiture of rental deposits from pre-terminations of leases in FY2011.
FY2012 over FY2011
The Gross Operating Revenue of Mandarin Orchard Singapore increased by 2.2% to S$154.4
million in FY2012 from S$151.1 million in FY2011, while Gross Operating Profit of Mandarin
Orchard Singapore increased by 0.9% to S$87.7 million in FY2012 from S$86.9 million in FY2011.
Mandarin Orchard Singapore also achieved a higher occupancy rate of 86.5% in FY2012 as
compared to 85.8% in FY2011, while ADR increased by 1.5% to S$281. This resulted in a RevPAR
of S$243 in FY2012, a 2.1% increase from S$238 in FY2011, resulting in an increase in room
revenue of 2.6% to S$93.6 million in FY2012 from S$91.2 million in FY2011.
114
The increase in transient demand was the key growth engine for Mandarin Orchard Singapore in
FY2012. The key driver of Mandarin Orchard Singapores revenue growth was the increase in
visitor arrivals and spending, driven in part by strong tourism performance and major events such
as, the Singapore Airshow. Higher revenue generated from banquet events was another key driver
of revenue growth in FY2012 as 2012 was considered to be an auspicious lunar year for
weddings.
The key reason for increase in the ADR and REVPAR was due to stronger market conditions.
While Gross Revenue increased, an increase in Operating expenses meant a decrease in the
Gross Operating Profit margin to 56.8% in FY2012 from 57.5% in FY2011.
Mandarin Gallery
Retail Income decreased by 3.0% to S$32.8 million in FY2012 from S$33.8 million in FY2011.
Retail rental income decreased by 1.6% to S$31.4 million in FY2012 from S$31.9 million in
FY2011. The decrease in FY2012 was mainly attributed to vacancy periods from lease
replacements whereby the average occupancy decreased to 96.9% in FY2012 from 99.5% in
FY2011. The effective retail rent per sq ft per month increased from S$21.3 in FY2011 to S$21.5
in FY2012.
Other income decreased by 26.3% to S$1.4 million in FY2012 from S$1.9 million in FY2011. This
was mainly due to the forfeiture of rental deposits from the pre-termination of leases in FY2011.
1Q2013 over 1Q2012
The Gross Operating Revenue of Mandarin Orchard Singapore decreased by 1.1% to S$37.5
million in 1Q2013 from S$37.9 million in 1Q2012, while Gross Operating Profit of Mandarin
Orchard Singapore decreased by 4.2% to S$20.6 million from S$21.5 million in 1Q2012. Mandarin
Orchard Singapore achieved a higher occupancy rate of 94.1% in 1Q2013 as compared to 86.8%
in 1Q2012, while ADR decreased by 4.9% to S$266. In 1Q2013 the management of Mandarin
Orchard Singapore adopted a yield management strategy to allow more flexibility in ADR in order
to achieve a higher occupancy rate. This resulted in a higher RevPAR of S$251 in 1Q2013, a 3.3%
increase from S$243 in 1Q2012, resulting in an increase in room revenue of 2.1% to S$23.7
million in 1Q2013 from S$23.2 million in 1Q2012.
The increase in corporate and transient demand was the key growth engine for Mandarin Orchard
Singapore in 1Q2013. The key factors of Mandarin Orchard Singapores drop in total revenue
despite the growth in REVPAR amongst other factors were the absence of major events such as
the Singapore Airshow in 2013 as it is an event organised once every two years, less promotional
activity in 1Q2013 and the loss of office rental income in 1Q2013. In addition, there were less
events in 1Q2013 compared to 1Q2012 as 2012 was considered to be an auspicious year for
weddings.
The decrease in Gross Revenue together with an increase in Operating expenses meant a
decrease in the Gross Operating Profit margin to 55.1% in 1Q2013 from 56.9% in 1Q2012.
Mandarin Gallery
Retail Income increased by 3.6% to S$8.6 million in 1Q2013 from S$8.3 million in 1Q2012. Retail
rental income increased by 2.5% to S$8.2 million in 1Q2013 from S$8.0 million in 1Q2012. The
increase in 1Q2013 was mainly attributed to higher rental rates on lease renewals. In 1Q2013, the
average occupancy rate decreased to 96.2% from 98.7% in 1Q2012. The effective retail rent per
sq ft per month increased from S$21.5 in 1Q2012 to S$22.7 in 1Q2013.
115
Other income remained relatively stable at S$0.4 million for 1Q2013 and 1Q2012.
Indebtedness
The OUE H-REIT Debt Facilities being a S$630.0 million financing package from Standard
Chartered Bank, Singapore Branch, is on a secured basis, comprising the Revolving Credit
Facility and Term Loan Facilities secured by:
a registered first legal mortgage over Mandarin Orchard Singapore and Mandarin Gallery;
deposits/proceeds in respect of Mandarin Gallery;
an assignment of all rights, titles, benefits and interests in connection with any master lease,
master lease in respect of Mandarin Orchard Singapore; and
Gallery.
On the Listing Date, the Borrower will draw down on the Term Loan Facilities of an amount of
S$587.0 million which will give OUE H-REIT an aggregate leverage of up to 33.2% as at the
Listing Date. In addition, the Borrower has an undrawn Revolving Credit Facility.
OUE H-REIT will have an aggregate leverage of approximately S$587.0 million representing
approximately 33.2% of the OUE H-REIT Deposited Property as at the Listing Date. The Property
Funds Appendix allows OUE H-REIT to borrow up to 35.0% of the OUE H-REIT Deposited
Property without a credit rating and up to a maximum of 60.0% of the value of OUE H-REITs
Deposited Property if a credit rating from Fitch Inc., Moodys or Standard & Poors is obtained and
disclosed to the public. The REIT Manager believes that OUE H-REIT will be able to enjoy
flexibility in respect of future capital expenditure or acquisitions. Based on the 35.0% limit imposed
by the Property Funds Appendix, OUE H-REIT will have an additional borrowing capacity of
approximately S$48.4 million.
1
The REIT Manager intends to employ an appropriate mix of debt and equity in financing
acquisitions of properties and property enhancements. The REIT Manager will also utilise interest
rate hedging strategies, where appropriate, so as to optimise risk-adjusted returns to Stapled
Securityholders.
(See Strategy OUE H-REITs Strategy Active Capital and Risk Management Strategy for
further details.)
1 Based on the Offering Price.
116
Liquidity and Capital Resources
Net cash from operations will be OUE H-REITs primary source of liquidity for funding
distributions, servicing of debt, payment of expenses and meeting the working capital and capital
expenditure requirements of OUE H-REIT. Taking into account the OUE H-REIT Debt Facilities
and the rental deposits received, the REIT Manager is of the opinion that OUE H-REITs working
capital is sufficient for its present requirements.
Capital Expenditure
The unaudited pro forma statements of total return have been prepared based on the following
capital expenditure (including FF&E expenses) incurred by OUE H-REIT during the relevant
financial years:
FY2010
S$000
FY2011
S$000
FY2012
S$000
Mandarin Orchard Singapore 83 2,091 2,038
Mandarin Gallery 2,782 19 600
TOTAL 2,865 2,110 2,638
1Q2012
S$000
1Q2013
S$000
Mandarin Gallery 24
TOTAL 24
The unaudited pro forma statement of cash flows in FY2012 has been prepared based on capital
expenditure of S$2.6 million incurred during the financial year.
Accounting Policies
For a discussion of the principal accounting policies of OUE H-REIT, OUE H-BT and OUE H-Trust,
see Appendix B, Reporting Auditors Report on the Unaudited Pro Forma Financial Information
for further details.
117
PROFIT FORECAST AND PROFIT PROJECTION
OUE H-BT will not make distributions for the period in which it is dormant. Therefore distributions
by OUE H-Trust, when OUE H-BT is dormant, will comprise distributions by OUE H-REIT solely.
Statements contained in this Profit Forecast and Profit Projection section that are not historical
facts may be forward-looking statements. Such statements are based on the assumptions set out
in this section of this Prospectus and are subject to certain risks and uncertainties that could
cause actual results to differ materially from those projected. Under no circumstances should the
inclusion of such information herein be regarded as a representation, warranty or prediction with
respect to the accuracy of the underlying assumptions by OUE H-Trust, OUE H-REIT, OUE H-BT,
the REIT Manager, the REIT Trustee, the Trustee-Manager, the Sponsor, the Joint Global
Coordinators, the Joint Bookrunners or any other person, or that these results will be achieved or
are likely to be achieved. (See Forward-Looking Statements and Risk Factors for further
details.) Prospective investors in the Stapled Securities are cautioned not to place any undue
reliance on these forward-looking statements, which are valid only as at the date of this
Prospectus.
Trustee-Manager, the Sponsor, the Joint Global Coordinators or the Joint Bookrunners
guarantees the performance of OUE H-Trust, OUE H-REIT or OUE H-BT, the repayment of
capital or the payment of any distributions, or any particular return on the Stapled
Securities. The forecast and projected yields stated in the following tables are calculated
based on:
the Offering Price; and
the assumption that the Listing Date will be 1 July 2013.
Such yields will vary accordingly if the Listing Date is not 1 July 2013 and in relation to
investors who purchase the Stapled Securities in the secondary market at a market price
that differs from the Offering Price.
The following tables set forth the forecast and projected statements of total return of OUE H-REIT
for Forecast Period 2013 and Projection Year 2014. The financial results of OUE H-Trust is mainly
contributed by OUE H-REIT as OUE H-BT will be dormant and its results would be immaterial.
Accordingly, no profit forecast and profit projection for OUE H-BT and OUE H-Trust have been
presented. The financial year end of OUE H-REIT is 31 December. The Profit Forecast and Profit
Projection may be different to the extent that the actual date of issuance of Stapled Securities is
other than 1 July 2013, being the assumed date of the issuance of Stapled Securities for the
Offering. The Profit Forecast and Profit Projection are based on the assumptions set out below
and have been examined by the Reporting Auditors and should be read together with the report
Reporting Auditors Report on the Profit Forecast and Profit Projection set out in Appendix A, as
well as the assumptions and the sensitivity analysis set out in this section of the Prospectus.
118
Forecast and Projected Statement of Total Return
The forecast and projected statements of total return for OUE H-REIT based on the Offering Price,
assuming the Over-Allotment Option is fully exercised, are as follows:
(9 Months)
(1)
S$000
(12 Months)
(1)
S$000
Gross revenue 84,430 115,419
Property expenses (9,910) (13,552)
Net property income 74,520 101,867
REIT Managers base management fees (3,976) (5,300)
REIT Managers performance fees (2,981) (4,075)
REIT Trustees fees (199) (317)
Other trust expenses (2,161) (2,161)
Finance income 14 13
Finance expense
(2)
(10,948) (14,597)
Net income 54,270 75,431
Gain on revaluation of investment
properties 50,925
Total return for the period/year 105,195 75,431
(Less)/Add: Net tax adjustments
(3)
(42,582) 11,275
Income available for distribution to
Unitholders 62,613 86,706
Weighted average number of Units
outstanding at end of period/year
(000)
(4)
1,311,293 1,320,553
Distribution rate 100% 100%
Distribution per Unit (cents) 4.77 6.57
Offering Price (S$/Unit) 0.88 0.88
Full year distribution yield 7.15%
(5)
7.46%
Illustrative annualised distribution yield
from Listing Date 7.36%
(6)
N.A.
Notes:
(2) Finance expense includes interest expenses, amortisation of debt-related transaction costs and other bank charges
and fees.
fees payable in Stapled Securities, the REIT Trustees fees, gain on revaluation of investment properties and
amortisation of debt-related transaction costs.
(4) The increase in number of Stapled Securities in issue is a result of the assumed payment of 100.0% of the REIT
Managers management fees for the relevant period in the form of Stapled Securities issued at the Offering Price.
119
(5) The Full Year 2013 Distribution has been calculated based on the unaudited pro forma historical income available
for distribution from 1 January 2013 to 31 March 2013 of S$19.9 million and the forecast income available for
distribution for the 9-month Forecast Period 2013 of S$62.6 million.
distributions made for the period from 1 January 2013 and ending on the day immediately preceding the Listing
Date.
ASSUMPTIONS
The REIT Manager has prepared the profit forecast of OUE H-REIT for Forecast Period 2013 and
profit projection for Projection Year 2014 based on the Offering Price and the following
assumptions. The REIT Manager considers these assumptions to be appropriate and reasonable
as at the date of the Prospectus. However, investors should consider these assumptions as well
as the profit forecast and profit projection and make their own assessment of the future
performance of OUE H-REIT.
Gross Revenue and Net Property Income contribution of Mandarin Orchard Singapore and
Mandarin Gallery
The Gross Revenue comprises (i) Lease Income from Mandarin Orchard Singapore under the
Master Lease Agreement (Mandarin Orchard Singapore) and (ii) Retail Income (Mandarin
Gallery). The forecast and projected contributions of Mandarin Orchard Singapore and Mandarin
Gallery to Gross Revenue are as follows:
Contribution to Gross Revenue
(9 Months)
(12 Months)
S$000 % S$000 %
Mandarin Orchard Singapore 57,248 67.8 78,570 68.1
Mandarin Gallery 27,182 32.2 36,849 31.9
Gross Revenue 84,430 100.0 115,419 100.0
The forecast and projected contributions of Mandarin Orchard Singapore and Mandarin Gallery to
Net Property Income are as follows:
Contribution to Net Property Income
(9 Months)
(12 Months)
S$000 % S$000 %
Mandarin Orchard Singapore 54,438 73.1 74,744 73.4
Mandarin Gallery 20,082 26.9 27,123 26.6
Net Property Income 74,520 100.0 101,867 100.0
120
A summary of the assumptions which have been used in calculating the total gross revenue are
set out below:
OUE H-REIT will receive Lease Income under the terms of the Master Lease Agreement,
comprising a Fixed Rent and a variable rent computed based on the sum of a stated percentage
of Mandarin Orchard Singapores Gross Operating Revenue and a stated percentage of Mandarin
Orchard Singapores Gross Operating Profit, less the sum of the Fixed Rent (the Variable Rent),
as set out in the table below:
Fixed Rent
(S$ million)
Variable Rent
Percentage
of Gross
Operating
Revenue +
Percentage
of Gross
Operating
Profit
Fixed Rent
(S$ million)
Mandarin Orchard
Singapore 45.0 33.0% 27.5% 45.0
Should the calculation of the Variable Rent yield a negative figure, the Variable Rent will be
deemed to be zero.
For Forecast Period 2013 and Projection Year 2014, Fixed Rent constituted 59.0% and 57.3% of
Mandarin Orchard Singapore Gross Revenue, respectively.
(See Certain Agreements relating to OUE H-Trust, OUE H-REIT, OUE H-BT and the Properties
Master Lease Agreement for further details)
Gross Operating Revenue and Gross Operating Profit of Mandarin Orchard Singapore
The forecast and projected Gross Operating Revenue and Gross Operating Profit of Mandarin
Orchard Singapore used in computing OUE H-REITs rental income under the Master Lease
Agreements for Forecast Period 2013 and Projection Year 2014 respectively are as follows:
Forecast
Period 2013
(9 Months)
Projection
Year 2014
(12 Months)
S$000 S$000
Room revenue 73,200 100,785
F&B revenue 29,665 40,288
Service charge 10,196 13,985
Other income 4,989 7,063
Gross Operating Revenue 118,049 162,121
Operating expenses (51,533) (70,959)
Gross Operating Profit 66,516 91,162
Gross Operating Profit margin (%) 56.3 56.2
121
The Gross Operating Revenue and Gross Operating Profit of Mandarin Orchard Singapore are
forecast and projected based on the following assumptions:
Gross Operating Revenue of Mandarin Orchard Singapore
The Gross Operating Revenue of Mandarin Orchard Singapore comprises:
room revenue;
F&B revenue;
service charge; and
other income.
Room revenue
The forecast and projected room revenue are based on Mandarin Orchard Singapores RevPAR,
which is based on total room revenue divided by the total number of Available Rooms for the
relevant period.
The number of hotel rooms, Average Occupancy Rate, ADR, and RevPAR for Mandarin Orchard
Singapore assumed in Forecast Period 2013 and Projection Year 2014 are as follows:
Weighted average
Forecast
Period 2013
(9 Months)
Projection
Year 2014
(12 Months)
Number of hotel rooms
(1)
1,065 1,077
Average Occupancy Rate
(2)
88.3% 87.7%
ADR
(3)
(S$) 284.8 292.7
RevPAR
(4)
(S$) 251.4 256.6
Notes:
(1) Based on estimated hotel rooms at the end of period. The Sponsor will bear the capital expenditure for the addition
of hotel rooms.
(2) Weighted by the total number of Available Rooms of Mandarin Orchard Singapore for the relevant period.
(3) Weighted by the total number of hotel rooms sold at Mandarin Orchard Singapore for the relevant period.
(4) Computed based on the total room revenue of Mandarin Orchard Singapore divided by the total number of Available
Rooms for the relevant period.
Forecast and projected Average Occupancy Rate and ADR are estimated after taking into account
the historical, the year-to-date 2013 operating performance, current and projected operating
performance of Mandarin Orchard Singapore. Other factors considered include the prospects of
the Singapore hospitality industry, the expected demand and supply of hotel rooms in Singapore,
the competitive position of competing hotels, major conventions and events that are scheduled to
take place in Singapore and along Orchard Road, the historical and expected future renovations
or refurbishments at Mandarin Orchard Singapore and the location of Mandarin Orchard
Singapore.
122
F&B revenue
F&B revenue encompasses revenue from the restaurants, bars, catering services, banquets,
room service and room mini-bar sales, and other F&B related income. For Forecast Period 2013
and Projection Year 2014, F&B revenue is expected to constitute approximately 25.1% and 24.9%
of the total revenue of Mandarin Orchard Singapore respectively.
The forecast and projected F&B revenue is estimated based on the historical performance of the
F&B sales of Mandarin Orchard Singapore and taking into account the expected occupancy rates
of Mandarin Orchard Singapore, the competitive position and location of Mandarin Orchard
Singapore, as well as expected bookings for banquets, wedding dinners, corporate meetings and
other corporate events.
Service charge
Service charge refers to the service charge typically levied on room revenue and F&B revenue and
is forecast and projected at approximately 10.0% of forecast and projected room revenue and F&B
revenue.
Other income
Other income includes primarily carpark revenue and income from provision of telecommunication
services, internet broadband services, laundry services and business centre services.
Operating expenses of Mandarin Orchard Singapore
The operating expenses of Mandarin Orchard Singapore comprise:
cost of sales;
staff costs;
energy and utilities; and
other expenses.
Cost of sales
Cost of sales includes direct costs incurred in the provision of F&B services such as food,
beverage and other related costs, telecommunication services, internet broadband services,
laundry services, and other shared services costs. Cost of sales has been forecast and projected
to vary in proportion to room revenue and F&B revenue for Forecast Period 2013 and Projection
Year 2014, taking into consideration cost efficiencies.
Staff costs
Staff costs relate to wages, salaries and the related staff benefits in connection with the hiring of
full-time and temporary staff to carry out day-to-day operations at Mandarin Orchard Singapore
including housekeeping services, reception services, security services, F&B, administrative,
marketing, property operation and maintenance and other services.
For Forecast Period 2013 and Projection Year 2014, staff costs are estimated based on Mandarin
Orchard Singapores historical payroll costs and after adjusting for an expected increment in each
year. In addition, consideration has been given to staffing requirements at Mandarin Orchard
123
Singapore by taking into account the forecast and projected performance of Mandarin Orchard
Singapore (in particular, expected occupancy levels, expected banqueting demand and expected
operating efficiencies).
Energy and utilities
For Forecast Period 2013 and Projection Year 2014, it has been assumed that energy and utilities
costs are based on the estimated utilities costs, taking into consideration historical rates,
expected rate increments and expected utilisation.
Other expenses
Other hotel expenses include costs of guest supplies, repair and maintenance expenses, selling
and marketing expenses, and administrative and general expenses.
Costs of guest supplies include costs of linen laundry and room consumables.
Repair and maintenance expenses relate to costs incurred for the upkeep of Mandarin Orchard
Singapore, including the cost of materials, supplies and contracts related to the general repair and
maintenance of Mandarin Orchard Singapore.
Selling and marketing expenses relate to costs incurred in marketing, advertising and promoting
Mandarin Orchard Singapore as well as commission to third parties.
Administrative and general expenses include turnkey fees, security services, maintenance of IT
systems and other general and administrative expenses.
The following table sets out information on the NLA, effective retail rent per sq ft, and the average
occupancy rate for Mandarin Gallery for Forecast Period 2013 and Projection Year 2014.
Forecast
Period 2013
(9 Months)
Projection
Year 2014
(12 Months)
Net Lettable Area (sq ft) 125,293 125,293
Effective retail rent per sq ft per month (S$) 23.4 23.9
Average occupancy rate (%) 99.6 98.9
Retail Income consists of:
retail rental income; and
other income attributable to the operations of Mandarin Gallery.
124
Forecast
Period 2013
(9 Months)
Projection
Year 2014
(12 Months)
$000 $000
Retail rental income 26,350 35,690
Other income 832 1,159
Retail Income 27,182 36,849
Retail rental income
Retail rental income consists of:
Basic Rent which includes (i) base rent (after rent rebates, refunds, credits or discounts and
rebates for rent-free periods, where applicable, but excluding turnover rent), (ii) service
charges payable by tenants towards covering the operation and property maintenance
expenses of Mandarin Gallery and (iii) advertising and promotion charges payable by tenants
for advertising and promotional activities for Mandarin Gallery; and
Turnover Rent which is generally calculated as a percentage of the tenants gross turnover.
Turnover rent may be subject to certain thresholds before it is payable.
Basic Rent
The REIT Manager has assumed the following in arriving at the forecast basic rent for the
tenancies of Mandarin Gallery for Forecast Period 2013 and Projection Year 2014:
rents payable under committed tenancies for Forecast Period 2013 and Projection Year
2014; and
expiring leases in Forecast Period 2013 and Projection Year 2014 are assumed to be
renewed or replaced based upon:
negotiated rates;
the REIT Managers assumed renewal rates for select leases that have not been
negotiated (taking into account comparable leases for tenancies that have recently
been negotiated, the last contracted Basic Rent and Turnover Rent rental rates (where
applicable), the location and size of each lettable area, the effect of competing
properties, assumed tenant retention rates on lease expiry, likely market conditions,
inflation levels and tenant demand levels); and
remaining leases assumed to be replaced by new tenants at rental rates increasing
from the prior contracted base rate at a CAGR of 2.5%.
Expiring tenancies are assumed to be renewed or be leased to new tenants with a two- or three-
year lease, consistent with the usual market practice for retail space in Singapore. This growth
assumption reflects the REIT Managers assessment of rental growth rates for Mandarin Gallery
for Forecast Period 2013 and Projection Year 2014 having regard to the rental growth rates used
in the valuation of Mandarin Gallery prepared by the Independent Valuers, the estimated rate of
consumer price inflation in Singapore, the outlook for the general economy including GDP growth
rates projected in the Independent Market Research Report, the demand level for tenancies at
Mandarin Gallery and the outlook for retail sales in Singapore.
125
As at 31 March 2013, 46.7% of leases (by NLA) have step-up rental structures in the Basic Rent,
with a weighted average annual step-up of approximately 5.5%.
Turnover Rent
As at 31 March 2013, approximately 90.3% of the committed leases at Mandarin Gallery (by NLA)
contain provisions for the payment of Turnover Rent. Only those committed leases and renewals
of committed leases which contain Turnover Rent provisions and new leases/renewals entered
into for units which previously contained Turnover Rent provisions have been included when
preparing such forecast and projection. The REIT Manager has forecast turnover rent of
approximately 1.6% of gross revenue for Forecast Period 2013 and Projection Year 2014,
respectively.
Lease renewals, vacancy allowance and occupancy rates
For Mandarin Gallery leases expiring in Forecast Period 2013 (0.9% of NLA) and Projection Year
2014 (19.8% of NLA), lease renewals, vacancy allowance and occupancy rates are estimated as
follows:
Committed leases (including legally binding letters of offer which have been accepted)
based on actual vacancy and rent free periods;
Leases replaced with new tenants assumed that leases representing 0.3% of total NLA (for
Forecast Period 2013) and 6.0% of total NLA (for the Projection Year 2014) of expiring leases
will be replaced with new tenants and subject to a one month vacancy period and a one
month rent free period; and
Renewed leases assumed that all other expiring leases representing 0.6% of total NLA (for
the Forecast Period 2013) and 13.8% of total NLA (for the Projection Year 2014) will be
renewed with no vacancy period and subject to a one month rent free period.
Expiring tenancies are assumed to be renewed or be leased to new tenants with a two- or
three-year lease, consistent with the usual market practice for retail space in Singapore.
The average Committed Occupancy Rates for Forecast Period 2013 and Projection Year 2014 are
estimated to be approximately 100.0% for both periods translating to average occupancy rates of
99.6% and 98.9%.
Other income
Other income comprises licence fees, casual leasing, recovery of utility expenses from the tenants
and other miscellaneous income attributable to the operation of Mandarin Gallery.
Property Expenses
Property Expenses consist of (i) property taxes, (ii) property management fee, and (iii) other
property operating expenses. A summary of the assumptions which have been used in calculating
Property Expenses is set out below.
126
(i) Property taxes
Property tax for Mandarin Orchard Singapore
For hotels, property tax is payable at 10.0% of the total annual value of the hotel property. The
annual value of hotel rooms is assessed on a fixed percentage of gross hotel room receipts for the
preceding year. For Forecast Period 2013 and Projection Year 2014, the annual value of hotel
rooms is assumed to be 25.0% of the preceding years gross room receipts. The annual values of
other areas assessable to tax are based on their estimated prevailing market rentals, derived
using valuation methods such as rental comparison or profits method. For Forecast Period 2013
and Projection Year 2014, the annual values of other areas assessable to tax have been
estimated, taking into consideration their prevailing market rentals.
For Forecast Period 2013 and Projection Year 2014, it is assumed that property tax will remain at
10.0% of the annual value of Mandarin Orchard Singapore and that no property tax rebate is given
by the tax authorities for Forecast Period 2013 and Projection Year 2014.
Property tax for Mandarin Gallery
The REIT Manager has assumed that property taxes will remain at 10.0% of the annual value of
the property, which is estimated based on the base rent and Turnover Rent derived by Mandarin
Gallery, and that no property tax rebate will be given by the tax authorities for Forecast Period
2013 and Projection Year 2014.
(ii) Property management fee
The Property Manager is entitled to the following property management fee for Mandarin Gallery
and the Excluded Commercial Premises which comprises the following:
(i) 2.0% per annum of gross revenue;
(ii) 2.0% per annum of the net property income for Mandarin Gallery and the Excluded
(iii) 0.5% per annum of the net property income for Mandarin Gallery and the Excluded
1
.
(iii) Other property operating expenses
Other property operating expenses includes marketing expenses, utilities, insurance, property
maintenance expenses, and other miscellaneous expenses in relation to the Initial Portfolio.
Capital Expenditure
Capital expenditure is expected to be capitalised as part of the investment properties. The
following table sets out the capital expenditure for Mandarin Gallery for Forecast Period 2013 and
Projection Year 2014.
Manager and/or third party agents. All the other fees and/or commissions payable to third parties arising from
rendering services to the Property will be borne by OUE H-REIT with the prior approval of the REIT Manager and
REIT Trustee.
127
Forecast
Period 2013
(9 Months)
Projection
Year 2014
(12 Months)
S$000 S$000
Capital expenditure 2,040
Capital expenditure for the Initial Portfolio for Forecast Period 2013 and Projection Year 2014
primarily comprise expenses for upgrading works to common corridors and restrooms of Mandarin
Gallery. No capital expenditure for the Hotel has been included as the expenses are to be incurred
by the Master Lessee.
(See Managements Discussion and Analysis of Financial Condition and Results of Operations
Factors Affecting OUE H-REITS Results of Operations Capital Expenditure for further
details.)
Pursuant to the Trust Deed, the REIT Manager is entitled to a Base Fee of 0.3% per annum of the
value of OUE H-REITs Deposited Property and a Performance Fee of 4.0% per annum of the Net
Property Income of OUE H-REIT in the relevant financial year.
The REIT Manager has agreed to receive 100.0% of its management fees in the form of Stapled
Securities for Forecast Period 2013 and Projection Year 2014.
The portion of management fees payable in the form of Stapled Securities shall be payable
quarterly in arrears and the portion of management fees payable in cash shall be payable monthly
in arrears. Where the management fees are payable in Stapled Securities, the REIT Manager has
assumed that such Stapled Securities are issued at the Offering Price.
(See Management and Corporate Governance OUE H-REIT Fees Payable to the REIT
Manager Management Fees payable to the REIT Manager for further details.)
REIT Trustees fees
The REIT Trustees fees are charged at a flat fee of 0.015% per annum of the value of the OUE
H-REIT Deposited Property for the first 12 months (commencing from the date of inception of OUE
H-REIT), and subsequently on a scaled basis of up to 0.02% per annum of the value of the OUE
H-REIT Deposited Property if the value of the OUE H-REIT Deposited Property is at least S$1.0
billion, subject to a minimum of S$20,000 per month, excluding out-of-pocket expenses and GST.
The fees are accrued and paid monthly in arrears in accordance with the OUE H-REIT Trust Deed.
The REIT Trustee will also be paid a one-time inception fee of S$20,000.
and Structure of OUE H-REIT The REIT Trustee Remuneration of the REIT Trustee for further
details.)
Other trust expenses of OUE H-REIT include recurring trust expenses such as annual listing fees,
valuation fees, legal fees, registry and depository charges, accounting, audit and tax advisers
fees, postage, printing and stationery costs, costs associated with the preparation of annual
reports, investor communications costs and other miscellaneous expenses.
128
Finance costs
Finance costs consist of interest expense and amortisation of debt-related transaction costs. OUE
H-REIT put in place a S$630.0 million financing package from Standard Chartered Bank,
Singapore Branch, on a secured basis, comprising a Revolving Credit Facility, and Term Loan
Facilities. An amount of S$587.0 million of the Term Loan Facilities will be drawn down on the
Listing Date. The REIT Manager has assumed that the average effective interest rate for Forecast
Period 2013 and Projection Year 2014 will be approximately 2.5% per annum, including upfront
debt establishment costs. The upfront debt establishment costs incurred in relation to the initial
debt facility is assumed to be amortised over its term and has been included as part of the finance
costs.
(See Strategy Key Strategies OUE H-REITs Strategies Active Capital and Risk
Management and Capitalisation and Indebtedness Indebtedness for further details.)
Initial Portfolio
The aggregate value of the Initial Portfolio as at 31 March 2013 was S$1,756 million, based on the
Appraised Value of the Initial Portfolio. The purchase price for the Initial Portfolio is S$1,705
million. The REIT Manager has assumed that there is no change in the valuation of the Initial
Portfolio, except to the extent associated with capitalised capital expenditure.
Accounting standards
The REIT Manager has assumed no changes in applicable accounting standards or other financial
reporting requirements that may have a material effect on the Profit Forecast and Profit Projection.
Significant accounting policies adopted by the REIT Manager in the preparation of the Profit
Forecast and Profit Projection are set out in Appendix C Unaudited Pro Forma Financial
Information.
Other assumptions
The REIT Manager has made the following additional assumptions in preparing the Profit Forecast
and Profit Projection:
that the Initial Portfolio remains unchanged throughout the periods;
that no further capital will be raised during the periods;
that there will be no change in the applicable tax legislation or other applicable legislation;
the Tax Ruling remains in force and the terms and conditions of the Tax Ruling are complied
with;
that all leases as at 31 March 2013 are enforceable and will be performed in accordance with
their terms (with allowances for bad and doubtful debts) during Forecast Period 2013 and
Projection Year 2014;
129
that there will be no pre-termination of any committed leases;
that 100.0% of Taxable Income is distributed for periods; and
that where derivative financial instruments are undertaken to hedge against interest rate
movements, there is no change in the fair value of such instruments during the Forecast
Period 2013 and Projection Year 2014.
Sensitivity analysis
The forecast and projected distributions included in this Prospectus are based on a number of
assumptions that have been outlined above. The forecast and projected distributions are also
subject to a number of risks as outlined in the section Risk Factors.
Investors should be aware that future events cannot be predicted with any certainty and deviations
from the figures forecast or projected in this Prospectus are to be expected. To assist investors
in assessing the impact of these assumptions on the profit forecast and profit projection, a series
of tables demonstrating the sensitivity of the DPU yield to changes in the principal assumptions
are set out below.
The sensitivity analysis is intended only as a guide. Variations in actual performance could exceed
the ranges shown. Movement in other variables may offset or compound the effect of a change in
any variable beyond the extent shown.
Gross Revenue
Changes in Gross Revenue will impact the Net Property Income of OUE H-REIT and
consequently, the DPU. The assumptions for total gross revenue have been set out earlier in this
section. The effect of variations in the total gross revenue on DPU yield is set out below:
DPU yield sensitivity analysis for Gross Revenue
FY2013
Illustrative annualised
Distribution Yield from
Listing Date
Projection Year FY2014
Distribution Yield
Offering Price
Based on the Offering
Price
S$0.88
Price
S$0.88
5.0% below base case 6.87% 6.97%
Base case 7.36% 7.46%
5.0% above base case 7.86% 7.96%
130
Property operating expenses
Changes in property operating expenses will impact the Net Property Income of OUE H-REIT and
consequently, the DPU. The assumptions for property operating expenses have been set out
earlier in this section. The effect of variations in the property operating expenses on DPU yield is
set out below:
DPU yield sensitivity analysis for
property operating expenses
FY2013
Listing Date
Distribution Yield
Offering Price
Price
S$0.88
Price
S$0.88
5.0% below base case 7.42% 7.52%
Base case 7.36% 7.46%
5.0% above base case 7.31% 7.40%
Borrowing costs
Changes in finance costs will impact the distributable income of OUE H-REIT and consequently,
the DPU. The effect of variations in the applicable interest rate (excluding the upfront debt
establishment cost) of the initial debt facility on DPU yield is set out below:
DPU yield sensitivity analysis for
borrowing costs
FY2013
Listing Date
Distribution Yield
Offering Price
Price
S$0.88
Price
S$0.88
25 basis points increase in the
applicable interest rate 7.24% 7.33%
Base case 7.36% 7.46%
25 basis points decrease in the
applicable interest rate 7.49% 7.59%
Fees of the REIT Manager and the Property Manager payable in Stapled Securities
The REIT Manager has assumed, for the Forecast Period 2013 and Projection Year 2014, that
100.0% of the REIT Managers management fees will be paid in Stapled Securities. The REIT
Manager has assumed that such Stapled Securities are issued at the Offering Price.
The effect of a change in the level of portion of the REIT Managers management fees payable in
Stapled Securities on the distribution yield is set out below.
131
DPU yield sensitivity analysis for of the payment
of management fees in Stapled Securities
FY2013
Listing Date
Distribution Yield
Offering Price
Price
S$0.88
Price
S$0.88
Base case (100% of management
fees payable in Stapled Securities) 7.36% 7.46%
50% of management fees payable in
Stapled Securities 6.97% 7.09%
0% of management fees payable in
Stapled Securities 6.58% 6.72%
132
STRATEGY
INVESTMENT POLICY
OUE H-REIT is a Singapore-based REIT and OUE H-BT is a Singapore-based business trust.
OUE H-REIT has been established with the principal investment strategy of investing, directly or
assets.
In accordance with the requirements of the Listing Manual, this principal investment policy will be
adhered to for at least three years following the Listing Date unless changed by Extraordinary
Resolution in a meeting of holders of OUE H-REIT Units. After the expiry of the three-year period,
the REIT Manager may from time to time change the principal investment policy of OUE H-REIT
so long as the REIT Manager has given not less than 30 days prior notice of the change.
OBJECTIVES
The Managers principal objectives are to deliver regular and stable distributions to Stapled
Securityholders and to achieve long-term growth in distributions and in the NAV per Stapled
Security, while maintaining an appropriate capital structure.
KEY STRATEGIES
OUE H-REITs Strategies
The REIT Manager plans to achieve these objectives through the following strategies:
Optimising assets and delivering operational excellence The REIT Manager intends to
leverage its relationship with the Sponsor, who has extensive experience in the hospitality
industry, and work jointly with the Master Lessee, Hotel Manager and Property Manager, to
enhance operational performance to deliver disciplined growth, and maximise hotel and retail
revenues and returns through asset enhancements and growth opportunities.
Growth through acquisitions The REIT Manager will pursue opportunities that meet its
investment criteria on yield requirements, location, strong fundamentals, organic growth
potential and value-adding opportunities. These opportunities will be supported by OUE
H-REITs relationship with the Sponsor.
Active capital and risk management OUE H-REITs capital funding objectives are to
maintain a strong balance sheet, manage the cost of debt financing, and potential refinancing
or repayment risks, secure diversified funding sources and potentially implement hedging
strategies.
OUE H-BTs Strategies
following occurs:
it is appointed by OUE H-REIT, in the absence of any other suitable master lessee(s), as a
master lessee of the Hotel. OUE H-BT will appoint a professional hotel manager to manage
the Hotel. OUE H-BT exists primarily as a master lessee of last resort with regard to the
Hotel so that in the event that a Master Lessee terminates or does not renew the Master
133
Lease Agreement beyond the initial term and OUE H-REIT is unable to lease the Hotel to
another master lessee for any reason, OUE H-BT will enter into a master lease agreement
for the Hotel on substantially the same terms as the previous Master Lease Agreement;
OUE H-REIT acquires hospitality assets in the future and, if there are no other suitable
master lessees, OUE H-REIT will lease these acquired hospitality assets to OUE H-BT. OUE
H-BT will then become a master lessee for that acquired hospitality asset and will appoint a
professional manager to manage that acquired hospitality asset;
it undertakes certain hospitality and hospitality-related development projects, acquisitions
and investments which may not be suitable for OUE H-REIT.
In general, OUE H-BT will be considered to be active in the event that it carries on any business
activity other than:
activities which OUE H-BT is required to carry out under any applicable law, regulation, the
listing rules of the SGX-ST, guidelines, rules, or directive of any agency, regulatory or
supervisory body;
the lending to any entity which OUE H-BT owns or to OUE H-REIT or use of the initial
S$20,000 working capital raised from the Offering; or
equity fund-raising activities and issue of new OUE H-BT Units carried out in conjunction with
OUE H-REIT which are solely for the purposes of funding OUE H-REITs business activities.
Upon OUE H-BT becoming active, the Trustee-Manager intends where appropriate to manage the
exposure arising from adverse market movements in interest rates and foreign exchange through
appropriate hedging strategies. The extent of the foreign exchange exposure would depend on the
jurisdictions in which OUE H-BT becomes active in and the extent of the interest rate exposure
would depend on the type of facilities to be taken up by OUE H-BT. OUE H-BT is currently dormant
but when it becomes active, appropriate internal controls would be put in place.
OUE H-REIT will not guarantee any debt of OUE H-BT, and vice versa. This will help shield each
entity from the others financial obligations because each entitys creditors will not have recourse
to the other.
Optimising assets and delivering operational excellence
The REIT Manager intends to leverage its relationship with the Sponsor, who has extensive
experience in the hospitality and real estate industry, to actively improve the operational
performance and maximise the cash flow and value of the Initial Portfolio.
Enhance operational performance to deliver disciplined growth: The REIT Manager will work
with the Hotel Manager and the Property Manager to maximise hotel and retail revenues and
returns through maintaining cost discipline in its operations, while achieving optimal occupancy
rates, high average room rates and improving rentals. The REIT Manager will seek to ensure that
the Hotel Manager and Property Manager leverage the expected increased demand from
economic and tourism growth in Singapore to improve occupancy, average room rates and
rentals.
Maximise revenues and returns through asset enhancements: The REIT Manager will identify,
evaluate and approve property improvement opportunities that will enhance the value of the Initial
Portfolio and will work closely with the Hotel Manager and the Property Manager to contribute to
higher revenues and profitability. These opportunities include upgrading and refurbishing existing
facilities, rooms or F&B outlets that could enhance pricing, or increase their service offering.
134
Capture growth opportunities through the Sponsors industry insight: The Master Lessee, in
consultation with the REIT Manager, will oversee the annual budgeting process for the Hotel and
be responsible for recommending strategies to increase revenue and profitability. This will include
drawing upon the Sponsors experience to provide strategic direction in areas such as room yield
management, optimising guest mix, access to global hospitality market intelligence, and
leveraging the Sponsors in-depth understanding of the latest hospitality industry trends to
implement innovative hotel and F&B concepts.
Effective collaboration with the Master Lessee: The Hotel Management Agreement between
the Master Lessee and the Hotel Manager allows the Master Lessee to closely monitor the
performance of the Hotel Manager. The Master Lessee will ensure that the Hotel Manager uses
its best efforts to optimise the performance of the Hotel. Close interaction and consultation
between the REIT Manager, the Master Lessee and the Hotel Manager will ensure that OUE
H-REITs asset management strategies are implemented.
Optimisation of the Mall through repositioning: The REIT Manager believes that there is
potential to further optimise the use of the Mall. This may possibly be done by improving tenant
mix, reconfiguration of space to achieve higher rentals, optimising the use of the Mall for other
income-generating opportunities and optimising leasing plans through a tailored approach to the
marketing of space, so as to potentially improve returns to Stapled Securityholders.
Active leasing strategy: The REIT Manager intends to improve the occupancy rates of Mandarin
Gallery by actively working with the Property Manager to pursue new leasing opportunities,
manage lease renewals through advance negotiations with tenants whose leases are about to
expire and by managing rental arrears. The REIT Manager and the Property Manager will also
work to foster close relationships with tenants in order to improve tenant retention. The REIT
Managers leasing strategy will target new retail tenants for Mandarin Gallery, while exploring the
expansion needs of existing tenants.
Cost management strategy
The REIT Manager, together with the Property Manager, will continue to foster close partnerships
with service providers to maintain low costs and control operation cost escalation. The REIT
Manager and the Property Manager will also constantly review workflow processes to improve the
efficiency of employees in order to reduce operational costs.
Growth through acquisitions
The REIT Manager will pursue opportunities for acquisitions that meet its investment criteria
including:
Yield requirements: The REIT Manager will seek to acquire only properties which are
value-enhancing after taking into account regulatory, commercial, political and other relevant
factors, with yields that are estimated to be above OUE H-REITs cost of capital and are expected
to maintain or enhance returns to Stapled Securityholders while balancing the various risks
associated with such an investment.
135
Geography and location: The REIT Manager will assess each propertys location and the
potential for business growth in its market, as well as its impact on the overall geographic
diversification of its property portfolio. Within Singapore, the REIT Manager will consider the
potential strategic benefits and synergies with Mandarin Orchard Singapore. For properties
beyond Singapore, the REIT Manager will assess opportunities in places with high growth
potential in visitors and room rates.
Strong fundamentals and organic growth potential: The REIT Manager will seek to acquire
high quality properties with good potential for increasing average room rates and occupancy rates
going forward.
Value-adding asset enhancement opportunities: The REIT Manager may also seek to acquire
properties which are under-managed and properties that have been poorly maintained but have
upgrading potential. The REIT Manager would assess the potential to add value through improved
hotel management, market repositioning or other enhancements. An example is the refurbishment
of 300 deluxe rooms of the Orchard Wing of Mandarin Orchard Singapore, undertaken in 2011 and
2012.
The REIT Managers acquisition strategy will be supported by:
OUE H-REITs relationship with the Sponsor: OUE H-REIT intends to leverage the Sponsors
experience, market reach and network of contacts in the Asia-Pacific hospitality and hospitality-
related sectors to source potentially yield-accretive deals. The Sponsor has the capacity to
support the portfolio growth of OUE H-REIT in the following ways:
offering a ROFR to OUE H-REIT which will provide OUE H-Trust with access to future
acquisition opportunities of income-producing properties which are used primarily for
hospitality and hospitality-related purposes (See Certain Agreements Relating to OUE
H-Trust, OUE H-REIT, OUE H-BT and the Properties Right of First Refusal Agreement for
further details.); and
lending its industry experience, network and expertise to the REIT Manager in assessing
potential acquisition opportunities.
136
The Sponsor has identified three Sponsor ROFR Properties which could potentially be offered to
OUE H-Trust. Selected details of the three Sponsor ROFR Properties are set out in the table
below:
Name of Sponsor ROFR Property/Ownership
(%) Location
Number of
Hotel Rooms
Valuation as at
31 December
2012
(S$ million)
Crowne Plaza Changi
Airport/100.0%
Singapore 320
(1)
291.0
Meritus Mandarin
Haikou/100.0%
Haikou,
the PRC
318 59.5
(2)
Meritus Shantou
China/80.0%
Shantou,
the PRC
318 62.5
(3)
Total Number of Hotel Rooms 956
(1)
413.0
Notes:
The following graph illustrates the potential for growth of OUE H-Trusts portfolio based on the
three Sponsor ROFR Properties:
Potential Doubling of Number of Hotel Rooms
1,051
2,033
1,077
(1)
956
1,156
(2)
Current Portfolio Sponsor ROFR Properties Enlarged Portfolio
88.8% 107.3%
growth
2,233
(2)
Notes:
(1) Including the addition of 26 new hotel rooms in FY2013.
(2) Including the proposed additional 200 hotel rooms expected to be developed on the plot of land adjacent to Crowne
137
Opportunities arising from trends in the hospitality industry: The REIT Manager believes that
hospitality service providers are increasingly looking to free up capital for business expansion,
which may increase the availability of assets for acquisition. In addition, OUE H-REIT can seek
partnership and co-operation opportunities with the Sponsor as it seeks to expand within and
beyond Singapore.
Active capital and risk management
The REIT Manager intends to use a combination of debt and equity to fund future acquisitions and
property enhancements such that it is within the Aggregate Leverage limit set out in the Property
Funds Appendix.
The objectives of the REIT Manager in relation to capital and risk management are to:
maintain a strong balance sheet and remain within the Aggregate Leverage limit set out in the
Property Funds Appendix;
manage the cost of debt financing, potential refinancing or repayment risks;
secure diversified funding sources from both financial institutions and capital markets as
OUE H-REIT grows in size and scale; and
manage the exposure arising from adverse market movements in interest rates and foreign
exchange through appropriate hedging strategies.
The REIT Manager will consider diversifying its sources of debt financing in the future, including
by way of accessing the public debt capital markets. The public debt capital markets may also
provide OUE H-REIT with the ability to secure longer-term funding options in a more cost efficient
manner. Nevertheless, the REIT Manager intends to maintain a prudent level of borrowings while
maximising returns to Stapled Securityholders.
The REIT Managers capital and risk management strategy includes managing risk of potential
interest rate and foreign exchange volatility through the use of hedging instruments. The REIT
Manager will regularly evaluate the feasibility of putting in place the appropriate level of interest
rate and foreign exchange hedges, after taking into account the prevailing market conditions.
In order to manage the currency risk involved in investing in assets beyond Singapore, the REIT
Manager may adopt currency risk management strategies that may include the use of foreign
currency denominated borrowings to match the currency of the asset investment as a natural
currency hedge.
138
BUSINESS AND PROPERTIES
OVERVIEW
The Managers principal objectives are to deliver regular and stable distributions to Stapled
Securityholders and to achieve long-term growth in distributions and in the NAV per Stapled
Security, while maintaining an appropriate capital structure.
INITIAL PROPERTY PORTFOLIO OF OUE H-TRUST
OUE H-Trusts Initial Portfolio will, on the Listing Date, comprise the following:
Mandarin Orchard Singapore: Mandarin Orchard Singapore is a renowned upscale hotel with
strong brand recognition given its relatively long history of operations in Singapore. An icon of
world class hospitality in Singapore since 1971, it features 1,051 rooms, five F&B outlets, and
approximately 25,511 sq ft of meeting and function space with a capacity of up to 1,840 people.
The Hotel is one of the top accommodation choices in Singapore for leisure and business
travellers globally, having won numerous internationally recognised awards including the 2012
World Luxury Hotel Awards for Singapore.
Mandarin Gallery: Mandarin Gallery is a retail mall which boasts a wide frontage of 152 metres
along Orchard Road, providing the Mall with a high degree of prominence. Featuring six duplexes
and six street front shop units facing Orchard Road, Mandarin Gallery is a choice location for
flagship stores of international brands. The ground floor of this high-end fashion mall benefits from
Mandarin Orchard Singapore. The Mall comprises four levels of high-end boutiques, shops and
restaurants, and is complemented by Mandarin Orchard Singapore to collectively provide an
integrated hospitality and retail experience for shoppers and hotel guests.
Master Lease of Mandarin Orchard Singapore
Mandarin Orchard Singapore will be leased to the Master Lessee. The Vendor of Mandarin
Orchard Singapore, which is also the Sponsor, will be the Master Lessee of the Hotel as at the
Listing Date. The Master Lessor will receive rental payments from the Master Lessee which will
comprise a Fixed Rent and a Variable Rent. The Master Lease Agreement will be entered into
between the Master Lessee and the REIT Trustee as trustee of OUE H-REIT on the Listing Date.
The term of the Master Lease Agreement for Mandarin Orchard Singapore is for a period of 15
years, with an option for the Master Lessee to obtain an additional lease for a further term of 15
years on the same terms and conditions, save for amendments required due to a change in law
and without any further option to renew.
directly, with the leases existing as at the Listing Date being assigned and/or novated to the REIT
Trustee on or prior to the Listing Date.
139
OUTLOOK FOR THE HOSPITALITY SECTOR IN SINGAPORE
The Managers believe that the Initial Portfolio and OUE H-Trusts investment strategy will benefit
from the strength of Singapores economy. Singapore remains one of the worlds most vibrant
business and tourism destinations, with multiple demand drivers and solid growth prospects.
The Managers believe that the three main drivers of growth for the hospitality market in Singapore
are:
(i) Business travel, given Singapores rising reputation as a key regional financial centre and its
increased profile as a global MICE destination;
(ii) The continued growth of the travel and tourism industry, which experienced a growth of
39.7% in tourist arrivals and a growth of 62.9% in tourism receipts between 2007 and 2012;
and
(iii) Medical tourism, which is one of the fastest-growing industries in Singapore and is expected
to attract 761,000 medical tourists by the end of 2015, representing a CAGR of 13.8% from
2010.
(See Appendix E, Independent Market Research Report for further details.)
Growth of business travellers and the MICE sector
According to STB, Singapore welcomed 2.5 million business travellers for the nine months ended
September 2012, which accounted for 23.3% of total visitor arrivals, an increase of 6.0% over the
same period in 2011.
Approximately 6,000 business events, including Biomedical Asia and ITB Asia also added to the
success in showcasing the Singapore brand as one that continues to attract a strong showing of
international and regional visitors. The opening of the two Integrated Resorts has reinforced
Singapores reputation as a leading MICE destination in Asia in terms of venue supply. Currently
there are six existing convention and exhibition venues in the market, namely Marina Bay Sands,
Resorts World Sentosa, Raffles City Convention Centre, Changi Exhibition Centre, Suntec
Singapore International Convention and Exhibition Centre and Singapore Expo. Singapore offers
first class infrastructure, excellent transportation access and a central location in Southeast Asia,
compared to other Asian convention cities.
Singapore, being a city-state with a strategic location and easy access to key Asian markets, has
become a truly premier convention destination in the world and this is reflected in the accolades
received in recent years including: Asias Top Convention City for the 11th time (International
Congress and Convention Association Global Rankings 2012), Top International Meeting City for
the fourth consecutive year, Asias Top Country and City for Meetings for 28 consecutive years
(Union of International Associations 2011). For FY2012, 71.5% of Mandarin Orchard Singapores
customers were transient and corporate customers, positioning the Hotel to capitalise on the
expected future growth in this segment.
140
The following diagram sets out the historical and forecast business traveller arrivals in Singapore
for 2008 to 2015E:
4.6 4.6
5.3
5.7
6.0
6.3
6.6
6.8
2008 2009 2010 2011 2012 2013E 2014E 2015E
Historical and Forecast Business Traveller Arrivals in Singapore (million)
Source: Euromonitor
1
.
Continued Development as a Premier Tourist Destination
The success of inaugural milestone events such as the Singapore Airshow, Singapore
International Water Week, the Summer Youth Olympic Games and the Formula One Singapore
Grand Prix in the last five years, as well as annual signature events such as the Great Singapore
Sale, Christmas in the Tropics and ZoukOut have marked a turning point for Singapore as a tourist
destination. According to the Independent Market Research Report, tourist arrivals in Singapore
are expected to increase from 14.4 million in 2012 to 18.3 million in 2017. Tourism receipts are
expected to increase from S$23.0 billion in 2012 to STBs target of S$30.0 billion in 2015.
In order to remain competitive, the Singapore government has been putting much effort into
diversifying its offering in terms of cultural and business events, attractions, medical facilities,
gaming facilities, shopping and exhibitions. In addition, Singapores tourism industry was granted
an additional S$905.0 million in funds in 2012 to promote growth over the next five years, of which
about one-third will be set aside to develop lifestyle events and the MICE sector through the
Tourism Events Development Scheme. Another one-third of the funds will be channelled to
develop new tourism products and concepts, while the remaining funds will be used primarily for
improving capabilities in tourism-related businesses.
For the nine months ended 30 September 2012, the top five countries by visitor arrivals, namely
Indonesia, PRC, Malaysia, Australia and India, contributed 55.1% of total visitor arrivals to
Singapore. In FY2012, 77.0% of Mandarin Orchard Singapores hotel customers originated from
Asian countries. The Managers believe that OUE H-Trust will be able to benefit from the expected
growth in arrivals from these regions.
1 Euromonitor has not provided its consent, for the purposes of section 249 (read with section 302(1)) of the SFA and
for the purposes of Section 282I of the SFA, to the inclusion of the information extracted from the relevant report
published by it, and is therefore not liable for such information under sections 253 and 254 (both read with section
302(1)) of the SFA and Sections 282N and 282O of the SFA. While the Managers have taken reasonable actions
to ensure that the information has been reproduced in its proper form and context, and that it has been extracted
accurately and fairly, neither the Managers, the Joint Global Coordinators, the Joint Bookrunners or any other party
has conducted an independent review of the information contained in such report or verified the accuracy of the
contents of the relevant information.
141
The following graphs show the growth in visitor arrivals for 2002 to 2017E and tourism receipts in
Singapore for 2002 to 2015E:
Historical and Forecast Visitor Arrivals in Singapore (million)
7.6
6.1
8.3
8.9
9.8
10.3 10.1
9.7
11.6
13.2
14.4
18.3
2002 2003 2004 2005 2006 2009 2010 2011 2012
2017E
2007 2008
Historical and Forecast Tourism Receipts (S$ billion)
8.8
6.9
9.8
10.9
12.4
14.1
15.2
12.8
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
2015E
18.9
22.3
23.0
30.0
Source: STB
1
.
Growth in Medical Tourism
Singapore is one of the leading medical tourism destinations in Southeast Asia for complex
treatment in the field of cardiology, ophthalmology, oncology, neurological surgery and organ
transplant. Singapore is ranked fourth out of 55 countries on Health Infrastructure rankings in the
International Institute for Management Developments World Competitiveness Yearbook in 2010.
Due to its reputation of having a high quality health care system and state of the art infrastructure,
many foreign patients travel to Singapore to seek medical treatment. Most of these tourists come
from countries such as Indonesia, as well as from South Asia and the Middle East. Indonesia,
Malaysia and Bangladesh accounted for more than 55.0% of total foreign patient arrivals.
1 STB has not provided its consent, for the purposes of section 249 (read with section 302(1)) of the SFA and for the
purposes of Section 282I of the SFA, to the inclusion of the information extracted from the relevant report published
by it, and is therefore not liable for such information under sections 253 and 254 (both read with section 302(1)) of
the SFA and Sections 282N and 282O of the SFA. While the Managers have taken reasonable actions to ensure that
the information has been reproduced in its proper form and context, and that it has been extracted accurately and
fairly, neither the Managers, the Joint Global Coordinators, the Joint Bookrunners or any other party has conducted
an independent review of the information contained in such report or verified the accuracy of the contents of the
relevant information.
142
Orchard Road, apart from being a prime shopping location, has gradually become a medical
centre, especially for private patients. Currently, there are approximately five medical providers
that operate in the Orchard Road area, including Orchard Medical Specialist Centre, Gleneagles
Hospital, Paragon Medical Centre, Healthway Screening & Wellness Centre, and Camden Medical
Centre. The Initial Portfolio is located next to a major medical cluster which includes leading
medical facilities such as the Paragon Medical Centre and Mount Elizabeth Hospital and hence
would benefit from the increasing arrival of medical travellers. According to the Independent
Market Research Report, 761,000 medical tourists are expected to visit Singapore in 2015,
representing a CAGR of 13.8% from 2010 and a CAGR of 12.6% over 2012 to 2015E.
The following diagram sets out the historical and forecast foreign patient arrivals in Singapore for
2008 to 2015E:
Historical and Forecast Medical Tourist Arrivals in Singapore (000)
370
342
399
461
533
604
681
761
2008 2009 2010 2011 2012 2013E 2014E 2015E
OUTLOOK FOR THE RETAIL SECTOR IN SINGAPORE
The Singapore retail property market performed well in 2012, with healthy and firm consumer
sentiments continuing into the first quarter of 2013. The planned supply for 2013 is expected to
continue being dominated by the suburban sub-market with new retail developments coming on
stream, while Orchard Road malls mainly undergo Asset Enhancement Initiatives (AEI) plans.
Increased Gap between Demand and Supply Increases Further Need for Retail Space
The significant injection of retail space in Orchard Road (in 2009 and 2010) as a result of the
commencement of operations of Mandarin Gallery, 313@Somerset, Knightsbridge, Scape, ION
Orchard and Orchard Central has increased the competitiveness of the retail industry, providing
shoppers with a greater choice of retail offering and changing the shopping behaviour of
consumers along Orchard Road.
The increase in retail space within Orchard Road corresponds with Singapores population
growth. The growing gap between population and retail space within Orchard Road from 2003 to
2008 sparked the need for more retail space, alongside growing tourism figures.
143
Historical and Forecast Orchard Road Retail Space and Population (million)
0
1
2
3
4
5
6
7
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E
Existing cumulative supply (sf) Population Ten year retail supply average (sf)
The total pipeline supply between 2013 and end-2016 is estimated to be approximately 5,168,100
sq ft, translating to an estimated annual average supply of 1,292,025 sq ft. Of this, only 16.0% of
the future supply is within Orchard Road and is expected to be completed over the course of 2013
and 2014:
Future Retail Supply by Planning Areas (000 sq ft of NLA)
0
500
1,000
1,500
2,000
2,500
2013E 2014E 2015E 2016E
Orchard Downtown Core Rest of Central Fringe Outside Central Region
Strong Demand for Orchard Road Retail
Since 2004, the strong demand for private retail property has generated an island-wide occupancy
rate of more than 90.0%. Private retail space within the Orchard Road micro-market achieved an
average occupancy rate of 95.0% as at the three months ended 31 December 2012 (4Q2012),
higher than the island-wide average of 93.6%.
144
Retail Occupancy Rate (%)
84%
86%
88%
90%
92%
94%
96%
98%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q2013
Island-wide Orchard Outside Central Region
Supported by strong domestic demand and tourism, the average rents for prime areas such as
Orchard Road and the suburban sub-markets remained stable at $32.20 per sq ft/month and
$29.75 per sq ft/month respectively as at 1Q2013. Beyond 2013, according to the Independent
Market Research Report, a 3.0% annual increase in rents is forecasted in view of the positive
outlook for retail sales.
Prime Orchard Road and Prime Suburban Rents
$0
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-12%
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Prime Orchard Prime Suburban
The Orchard Road area has been and will undergo rejuvenation from time to time through efforts
by both the public as well as the private sectors. The new facades and fresh concepts are likely
to inject continual excitement along Singapores prime shopping belt. Further, with the Singapore
governments announcement of plans to expand the rail network, island-wide connectivity will be
enhanced, effectively facilitating island-wide mobility and possibly further increasing Orchard
Roads accessibility.
145
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146
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147
INITIAL PORTFOLIO ANALYSIS
Certain Information about the Initial Portfolio
The table below sets out certain information with respect to Mandarin Orchard Singapore and
Mandarin Gallery as at the Latest Practicable Date, being 28 June 2013:
GFA (sq ft)
Number of
Available
Rooms Land Lease Expiry
Mandarin Orchard Singapore 990,277
(1)
1,051 99-year lease commencing
from 1 July 1957
Mandarin Gallery 196,336 N.A. 99-year lease commencing
from 1 July 1957
Note:
(1) Out of the 990,277 sq ft of GFA of Mandarin Orchard Singapore, 166,910 sq ft of GFA is for commercial use which
is not exclusively for hotel guests only.
Valuation
The valuations of the Initial Portfolio by C&W and Jones Lang LaSalle as at 31 March 2013 are
summarised below:
Valuation by
C&W
(S$ million)
Valuation by
Jones Lang
LaSalle
(S$ million)
Purchase
Price
(S$ million)
Mandarin Orchard Singapore 1,220 1,180 1,180
Mandarin Gallery 536 525 525
Total 1,756 1,705 1,705
The charts below provide a breakdown of the Initial Portfolio by valuation (as at 31 March 2013),
and by Gross Revenue and NPI for FY2014.
Breakdown of the Initial Portfolio by Valuation (as at 31 March 2013)
(1)
Mandarin Orchard
Singapore
S$1,220m
69%
Mandarin
Gallery
S$536m
31% Total:
S$1,756m
Note:
(1) Based on the independent valuations of Mandarin Orchard Singapore and Mandarin Gallery.
148
Breakdown of the Initial Portfolio by NPI
(1)
for Projection Year 2014
Mandarin Orchard
Singapore
S$75m
73%
Mandarin Orchard
Singapore
S$75m
73%
Total:
S$102m
Mandarin
Gallery
S$27m
27%
Note:
(1) Net Property Income or NPI means the gross revenue of the Initial Portfolio (comprising the gross rental
payments under the Master Lease Agreement, which comprises a Fixed Rent and a Variable Rent, and the Retail
Income (each as defined herein) from Mandarin Gallery) (Gross Revenue) less (i) property taxes; (ii) property
management fee; and (iii) other property operating expenses (collectively, Property Expenses).
COMPETITIVE STRENGTHS OF THE INITIAL PORTFOLIO
The REIT Manager is of the view that the Initial Portfolio enjoys the following competitive
strengths:
(1) Central location in Singapores prime shopping and tourism district
The Initial Portfolio comprises Mandarin Orchard Singapore and Mandarin Gallery which
offers a unique combination of upscale lodging and high-end retail in the heart of the Orchard
Road shopping district.
Orchard Road is Singapores premier shopping district, one of the most visited tourist
destinations and is host to a variety of popular lifestyle and entertainment events and festive
activities which both Mandarin Orchard Singapore and Mandarin Gallery are well-placed to
benefit from. Orchard Road is also located in the core central region of Singapore in close
proximity to key business districts, resulting in a strong flow of pedestrians, tourists and
business travellers.
Mandarin Orchard Singapore is located next to a major medical cluster which includes
leading medical facilities such as the Paragon Medical Centre and Mount Elizabeth Hospital
and hence would benefit from the increasing arrival of medical travellers.
(2) Excellent connectivity and accessibility
The Initial Portfolio is easily accessible via public transport and is well served by a network
of major roads. The Somerset and Orchard MRT stations are within walking distance, with
both stations being two to three stops away from the key interchange stations of Dhoby
Ghaut and City Hall, as well as the upcoming interchange station of Newton in 2015. This
allows shoppers to conveniently reach Mandarin Orchard Singapore and Mandarin Gallery
from all parts of Singapore by using the nationwide MRT network.
149
The Orchard Road area is generally well served by a network of major roads and bus routes,
facilitating easy access to other parts of Singapore. Popular tourist attractions such as
Marina Bay Sands and Gardens by the Bay, as well as key business districts such as the
CBD and the Marina Bay area, are approximately a 10- to 15- minute drive away.
(3) Beneficiary of the revitalisation of Orchard Road which will increase shopper traffic
and retail sales for retail malls located in Orchard Road
Orchard Road remains the most visited free-access attraction in Singapore according to the
Independent Market Research Report. It is also host to a variety of popular lifestyle and
entertainment events and festive activities such as the annual Great Singapore Sale,
Fashion Season Orchard and Christmas Light-up. STB has consistently undertaken
rejuvenation projects to significantly beautify and enhance the landscape of the area through
infrastructure and landscape additions. The Singapore government has been active in
implementing initiatives to make Orchard Road increasingly pedestrian-friendly over time by
linking buildings and shopping centres on the street by an underpass walkways. As such,
Mandarin Orchard Singapore and Mandarin Gallery are both expected to benefit from
infrastructure improvement and enhanced positioning.
(4) Large and reputable customer and tenant bases
The prominent and strong branding of Mandarin Orchard Singapore allows it to capture a
more diversified customer profile ranging from leisure to corporate customers. For FY2012,
71.5% of the Hotels customers were transient and corporate customers who are typically
more profitable given their preference and propensity to pay for executive-style hotel rooms
with higher room rates. Of the corporate customers, no single industry accounted for more
than 6.0% of the Hotels room revenues, which minimises industry concentration risk and
over-reliance on any single industry.
Mandarin Gallery is positioned as a high-end fashion mall and a tailored destination for its
specific target audience. Its unique positioning has attracted like-minded premium brands
such as Paul Smith, Y-3, Fred Perry Laurel Wreath and Bathing Ape. Mandarin Gallery has
a total of 86 local and international tenants occupying 97 shops as at 31 March 2013. The
leasing strategy to minimise brand duplication with neighbouring malls creates a distinct
identity which is a source of competitive advantage for the Mall. Being a fashion mall, fashion
apparel is a core focus and accounts for 45.7% of tenant mix by retail rental income for the
three months ended 31 March 2013. Mandarin Gallery also has other complementary retail
categories such as Living & Lifestyle, F&B, Accessories and Hair & Beauty to provide a
diversified and holistic retail offering to customers.
(5) Unique Strengths of Mandarin Orchard Singapore and Mandarin Gallery
Mandarin Orchard Singapore is a renowned upscale hotel with strong brand recognition
given its relatively long history of operations in Singapore. An icon of world class hospitality
in Singapore since 1971, it features 1,051 rooms, five F&B outlets, and approximately 25,511
sq ft of meeting and function space with a capacity of up to 1,840 people. The Hotel is one
of the top accommodation choices in Singapore for leisure and business travellers globally,
having won numerous internationally recognised awards including the 2012 World Luxury
Hotel Awards for Singapore.
Mandarin Orchard Singapore has won numerous internationally recognised awards and
accolades in recent years for both its excellent hospitality services and award-winning F&B
outlets, including the ASEAN Green Hotel Recognition Award (2012), Asia Pacific Hotel
150
Award 2012-2013, World Luxury Hotel Awards Country Winner (2012), Hospitality Asia
Platinum Awards Regional Series (2011-2013), 21st TTG Travel Awards Best City Hotel,
Singapore (2010) and Singapore Tatler: Singapore Best Restaurant Series (2010), which
further boosts its already established reputation in the local hospitality market.
Mandarin Orchard Singapore also actively seeks to cater to both transient and corporate
travellers and is therefore well-positioned to capture what the REIT Manager believes to be
the relatively more profitable segment of the hospitality market. 71.5% of its customers were
from the transient and corporate segment in FY2012. Focusing on this target market also
allows for more repeat business given that transient and corporate customers tend to be
repeat customers, and an estimated more than 20.0% of Mandarin Orchard Singapores
customers are repeat customers for FY2012.
According to the Independent Market Research Report, it is the largest hotel on Orchard
Road and the third largest hotel in Singapore by number of hotel rooms. With 1,051 rooms
and large banquet and conference rooms, Mandarin Orchard Singapore can benefit from
economies of scale through cost savings when purchasing in bulk or maximising the
utilisation of shared facilities for hotel guests.
Mandarin Orchard Singapore will also be able to leverage the Sponsors experience,
in-depth knowledge and understanding of the Hotel cultivated over the years, and the
owner-operator model further incentivises the Sponsor to continually improve the
performance of the Hotel. The synergistic pairing of Mandarin Orchard Singapore and
Mandarin Gallery also allows guests to revel in an all-encompassing hospitality and retail
experience, thereby generating significant cross-selling opportunities.
The following charts set out the weighted average occupancy rates and RevPAR trends for
Mandarin Orchard Singapore from 2010 to 2012.
Occupancy Rates of

RevPAR Trends for
(S$)
84.6%
85.8%
86.5%
2010 2011 2012
215.1
237.9
243.3
2010 2011 2012
Mandarin Gallery
Mandarin Gallery is a retail mall which boasts a wide frontage of 152 metres along Orchard
Road, providing the Mall with a high degree of prominence. Featuring six duplexes and six
street front shop units facing Orchard Road, Mandarin Gallery comprises four levels of
high-end boutiques, shops and restaurants and is a choice location for flagship stores of
international brands. The ground floor of this high-end fashion mall benefits from high street
visibility due to its direct access to Orchard Road and connection to the lobby of Mandarin
Orchard Singapore.
151
A heightened shopping experience is reflected through Mandarin Gallerys interior design,
undertaken exclusively by AIM Create, a member of the Marui Group. Each level of Mandarin
Gallery features a different ceiling design, creating an ambience which distinguishes the Mall
from other shopping malls. Areas surrounding the lift lobbies on upper floors have also been
converted into cosy rest areas for shoppers.
The Mall takes on a leasing approach of identifying tenants with exclusive brands and
concepts, thus resulting in a retail offering that has minimal brand duplication with
neighbouring malls and creating a distinct identity which is a source of competitive
advantage for the Mall.
The Mall also has the added and distinct competitive advantage of being connected to
Mandarin Orchard Singapore, thus benefiting from a ready catchment of hotel guests flowing
into the shopping gallerys premises.
The current earnings of Mandarin Gallery are underpinned by existing lease arrangements.
As at 31 March 2013, the weighted average lease term to expiry (by NLA) is 2.4 years, with
the leases in respect of only 0.9% and 19.8% of total tenants (by NLA) expected to expire in
Forecast Period 2013 and FY2014 respectively. The current lease expiry profile is expected
to provide earnings stability to OUE H-Trust, which will be further supplemented by the
backdrop of resilient rental rates for retail malls in the Orchard Road area.
The Mall has 86 tenants as at 31 March 2013. Mandarin Gallerys tenant base is broad, with
local and international tenants covering a wide variety of retail and food and beverage
sectors. The Malls tenants include retailers with well-established premium brands and
multi-label concept stores such as Paul Smith, Y-3, Fred Perry Laurel Wreath, Bathing Ape,
Marc by Marc Jacobs, Hugo BOSS, Mulberry and Bell & Ross. Reputable F&B tenants
include Ippudo Ramen, Ito-Kacho Restaurant, Antoinette and Suju Japanese Restaurant.
The following charts set out a breakdown of Mandarin Gallerys tenant mix by rental income
and by NLA.
(by Retail rental income)
1

(by NLA)
2
Fashion
Apparel
35%
F&B
15%
Living & Lifestyle
15%
Hair &
Beauty
13%
Accessories
9%
Watches &
Jewellery
7%
Services
3%
Travel
3%
Fashion
Apparel
46%
Accessories
14%
Watches &
Jewellery
13%
F&B
9%
Living &
Lifestyle
7%
Hair & Beauty
7%
Services
2%
Travel
2%
1 For the three months ended 31 March 2013.
2 Based on occupied NLA for the three months ended 31 March 2013. NLA is considered occupied when rental
income, whether wholly or partially, is received from the tenant for the particular month.
152
RECENT OR UPCOMING REFURBISHMENTS CARRIED OUT ON THE INITIAL PORTFOLIO
The Property Manager and the Hotel Manager intend to conduct refurbishment programs in a
staged manner in order to ensure income stability. The Sponsor periodically evaluates
refurbishment and repositioning works in its properties on a regular basis, in order to ensure that
they are in a good state of upkeep and are able to meet the changing demands of their target
markets. The refurbishments will be aimed at maintaining and improving the image and
attractiveness of the Initial Portfolio to increase patronage, optimising the Initial Portfolios
revenue-generating capabilities.
The Sponsor has committed S$23.1 million to fund refurbishment works which include the addition
of 26 new hotel rooms, refurbishment of 430 hotel rooms and relocation/renovation of the club
lounge and the Chinese restaurant. The works commenced in FY2013.
Upcoming refurbishments on the Initial Portfolio
refurbishment of 430 hotel rooms. This work commenced in FY2013 with the increase in hotel
rooms, the expected total number of hotel rooms is expected to increase to 1,077 rooms and the
RevPAR of the refurbished rooms is expected to improve.
The projected capital expenditure of the Master Lessee for FY2013 is budgeted to be in the region
of S$4.3 million, with an additional S$23.1 million expected to be spent on an additional upgrading
work. This sum of S$27.4 million will be funded by the Sponsor.
Mandarin Gallery
The projected capital expenditure for upcoming refurbishment works at Mandarin Gallery is
budgeted to be in the region of $2.0 million. Upcoming refurbishments include changing the floor
tiles for the first and second levels and upgrading the restroom finishing on all four levels. These
refurbishments are expected to be carried out in 2014 and mainly at night to enable the normal
operation of Mandarin Gallery.
COMPETITION
The hospitality sector in Singapore is highly competitive. Mandarin Orchard Singapore
experiences competition primarily from other hotels of similar grade in their immediate vicinities,
and also from other hotels in their geographical market. The level of competition in the Singapore
hospitality market is affected by various factors, including changes in population and economic
conditions locally, regionally and globally, and the supply and demand for hotel rooms and
changes in travel patterns and preferences. Competing hotels may offer more facilities and/or
amenities at their premises at similar or more competitive prices compared to the facilities and/or
amenities offered at the Hotel. Competing hotels may also significantly lower their rates or offer
greater convenience, services or amenities, to attract more guests. Mandarin Orchard Singapore
is also likely to face competition in attracting and retaining staff due to high demand in the
hospitality sector, as well as potential competition from the entry of new hotels into the market.
An estimated four new hotels on Orchard Road, with a net supply totalling approximately 1,484
hotel rooms, are expected to enter the market by the end of 2014. Net supply of approximately
4,238 rooms island-wide is expected to be completed in 2013, with 220 rooms in the Orchard
Road area in the vicinity of Mandarin Orchard Singapore.
153
The table below sets out the new supply of hotel rooms expected from FY2013 to FY2014.
Hotel room type 2013 2014
Luxury 182
Upscale 1,077 512
Mid-tier 1,492 943
Economy 1,669 652
Total 4,238 2,289
The hotel market is increasingly competitive with new hotel supply coming on stream. Mandarin
Orchard Singapore is located in the heart of the Orchard Road shopping district and has competed
successfully in the upscale segment.
The following table sets out some of the key competition faced by Mandarin Orchard Singapore,
which are all situated in the Orchard Road area (except for Swisso tel The Stamford, Singapore):
Number of Rooms Area
Grand Park Orchard Singapore 308 Orchard
Hilton Singapore Hotel 422 Orchard
Orchard Hotel 656 Orchard
Royal Plaza 511 Orchard
Singapore Marriott Hotel 393 Orchard
Swisso tel The Stamford, Singapore 1,261 Downtown core
There are other hotels which also compete with Mandarin Orchard Singapore, particularly in terms
of location, but this does not appear to have had an adverse impact on the Hotels status.
Other hotels will be added in the Orchard Road area over the next few years, which may add 2,154
rooms by 2017. However, most of these will not compete directly with Mandarin Orchard
Singapore on the basis of positioning.
Mandarin Gallery
Mandarin Gallerys competition is primarily retail malls on Orchard Road. Other retail malls such
as Raffles City and Marina Bay Shoppes also compete with Mandarin Gallery but the competition
is mitigated as these malls are located in another retail micro-market (Marina Centre/Marina Bay
cluster).
Given its seamless link to Mandarin Orchard Singapore, unique location, unprecedented street
level prominence and tenancy strategy, Mandarin Gallery has effectively limited its competition.
154
The following table sets out the key competition faced by Mandarin Gallery:
ION
Orchard Knightsbridge 313@Somerset
Wisma
Atria Paragon
Ngee
Ann City
Nearest MRT Orchard Orchard Somerset Orchard Orchard Orchard
Year Opened 2009 2010 2009 1986 1998 1993
Estimated
Retail NLA
(as at
31 December
2012) (sq ft) 663,000 83,000 291,129 127,056
(1)
483,700 798,973
(2)
Mall
Occupancy
rate
(as at
31 December
2012) (%) 99.0 100.0 100.0 99.5 99.5 100.0
Estimated
annual
shopper traffic
(million) 54 N.A. 37 27 20 NA
Notes:
(1) The retail NLA of Wisma Atria excludes Isetan.
(2) The retail NLA of Ngee Ann City includes the retail portion owned by Toshin Development Co. Ltd..
Future Competing Development
Hotel Developments
Net supply of approximately 4,238 rooms island-wide is expected to be completed in 2013, with
220 rooms in the Orchard Road area in the vicinity of Mandarin Orchard Singapore.
The table below sets out the new supply of hotel rooms island-wide by tier expected from 2013E
to 2017E:
Hotel room type Existing
Additional
supply by
2017E
Luxury 7,109 962
Upscale 16,167 3,665
Mid-tier 14,917 5,938
Economy 7,657 3,105
Total 45,850 13,670
155
RETAIL DEVELOPMENTS
Four proposed retail projects are expected to commence operations over the course of 2013 and
2014 in the Orchard Road area in the vicinity of Mandarin Gallery, with a total net floor area of
826,000 sq ft. As at 31 March 2013, there are no proposed retail developments in the Orchard
Road area planned for 2015 and 2016.
The table below sets out the proposed retail projects in the Orchard Area from 2013E to 2014E:
Expected Time of
Completion Proposed Retail Project Location
Net Floor Area
(sq ft)
3Q2013 The Heeren AEI Orchard Road 156,000
4Q2013 Orchard Gateway Orchard Road/
Somerset Road
180,000
1Q2014 Shaw Centre AEI Orchard Road 400,000
2014 268 Orchard Orchard Road 90,000
OUE H-BT
The Trustee-Manager expects OUE H-BT to be dormant as at the Listing Date. Save as disclosed
in this Prospectus and based on the prevailing market conditions as at the date of this Prospectus,
the Trustee-Manager is not aware of any event which may materially affect OUE H-BTs business
prospects in the current financial year.
156
MANDARIN ORCHARD SINGAPORE
333 Orchard Road
Singapore 238867
General Description
Mandarin Orchard Singapore is the Sponsor Groups flagship hotel. It is strategically located at
333 Orchard Road, Singapore 238867, next to the junction of Orchard Link and close to Mount
Elizabeth Hospital, in the heart of Orchard Road, and approximately three km from the city centre.
OUE H-REIT has a 100% ownership of Mandarin Orchard Singapore.
The property is held on a 99-year lease on the land from 1 July 1957, and comprises a total GFA
of 990,277 sq ft. Out of the 990,277 sq ft of GFA of Mandarin Orchard Singapore, 166,910 sq ft
of GFA is for commercial use which is not exclusively for hotel guests only. The Hotel contains
1,051 rooms and approximately 25,511 sq ft of meeting and function space, including a grand
ballroom. There are 441 car parking spaces operated by Mandarin Orchard Singapore, which are
located in the multi-level carpark and basement levels.
In November 2009, the Sponsor Group completed a major refurbishment of Mandarin Orchard
Singapore which included a new facade, new F&B outlets, a fitness centre, a business centre and
new meeting rooms. This refurbishment programme was undertaken to complement the launch of
the adjacent Mandarin Gallery to create an integrated hospitality and retail experience. Further
renovation works in common areas and hotel rooms were also carried out in 2011 and 2012.
Accessibility to other parts of Singapore is enhanced by the Hotels close proximity to main arterial
roads and the nearby Central Expressway, with the Somerset and Orchard MRT stations within
walking distance of the Hotel, with both stations being two to three stops away from the key
interchange stations of Dhoby Ghaut and City Hall, as well as the upcoming interchange station
of Newton in 2015. Key business districts such as the CBD and the Marina Bay area are
approximately a 10- to 15- minute drive away.
157
A summary of selected information on Mandarin Orchard Singapore is set out in the table below:
Completion Date 1971
Leasehold Tenure
(1)
99-year lease commencing from 1 July 1957
Market segment Upscale
Approximate GFA (sq ft) 990,277
(2)
Number of Available Rooms 1,051
Carpark Lots 441
(3)
RevPAR (FY2012) (S$) 243
Fixed Rent for Forecast Period 2013
(S$ million)
33.8
Variable Rent for Forecast Period 2013
(S$ million)
23.5
Proportion of Variable Rent to Lease
Income for Forecast Period 2013 (%)
41.0
Appraised Value by C&W
(as at 31 March 2013) (S$ million)
1,220
Appraised Value by Jones Lang LaSalle
1,180
Master Lessee The Sponsor
Notes:
(1) This refers to the length of leasehold title acquired directly or indirectly by OUE H-REIT under the Property Sale and
Purchase Agreement.
(3) It should be noted that the owner of the Adjoining Property (as defined herein) enjoys certain rights to use carparks
in the Initial Portfolio.
158
REVENUE STRUCTURE FOR MANDARIN ORCHARD SINGAPORE
The chart below provides a breakdown of the revenue structure for Mandarin Orchard Singapore
by the percentage of fixed and variable lease contribution to Lease Income. Going forward, the
percentage of variable rental contribution is expected to increase slightly, presenting further
growth upside to OUE H-Trust.
Fixed and Variable Rent Composition (S$ million)
70.3% 61.0% 60.0% 59.8% 57.3%
29.7%
39.0% 40.0% 40.2%
42.7%
64.0
73.8
75.1 75.3
78.6
2010 2011 2012 FY2013E
(1)
FY2014E
Fixed Rent Variable Rent
(1) FY2013E refers to the estimated results for FY2013. FY2013E figures are computed based on (i) unaudited pro
forma financials from 1 January 2013 to 31 March 2013, and (ii) forecast figures for Forecast Period 2013.
Operating Statistics
The weighted ADR, occupancy rate and RevPAR for Mandarin Orchard Singapore are as follows:
Weighted Average FY2010 FY2011 FY2012
ADR (S$) 254 277 281
Occupancy Rate (%) 84.6 85.8 86.5
RevPAR
(1)
(S$) 215 238 243
Note:
(1) Computed based on the total room revenue of Mandarin Orchard Singapore divided by the total number of Available
Rooms for the relevant period.
159
The following chart shows ADR, occupancy rate and RevPAR for Mandarin Orchard Singapore for
FY2010, FY2011 and FY2012. ADR has increased by 10.6% from S$254 in 2010 to S$281 in
2012, while RevPAR has increased by 13.0% from S$215 in 2010 and S$243 in 2012. Occupancy
has remained at a reasonably high level of approximately 85%.
254
277
281
215
238
243
84.6%
85.8%
86.5%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
0
50
100
150
200
250
300
350
400
FY2010 FY2011 FY2012
ADR RevPAR Occupancy Rate (%)
Hotel Guest Profile
The following table sets out a breakdown of the guest profile of Mandarin Orchard Singapore by
country of origin and hotel guest type for FY2012:
Southeast
Asia
(1)
, 53%
North Asia
(2)
,
19%
Europe
(3)
, 8%
South Asia
(4)
,
5%
Oceania
(5)
, 4%
North
America
(6)
, 5%
Others
(7)
, 6%
Geographic Breakdown by Room Nights for FY2012
Notes:
(1) Southeast Asia includes Malaysia, Indonesia, Cambodia, Laos, Myanmar, Vietnam, Brunei, Thailand and the
Philippines.
(2) North Asia includes PRC, Taiwan, Hong Kong and Japan.
(3) Europe includes Germany, France, Finland, Great Britain, Belgium, Italy, Netherlands, Greece, Russia, Spain,
Sweden, Switzerland, Austria and Norway.
(4) South Asia includes India, Pakistan, Bangladesh, Sri Lanka and Maldives.
(5) Oceania includes Australia, Papua New Guinea and New Zealand.
(6) North America includes the United States and Canada.
(7) Others include Africa, Middle East and others.
160
FY2012 Customer Profile for Mandarin Orchard Singapore (By Room Revenue)
Transient
(1)
45%
Corporate
(2)

26%
Wholesale
(3)
29%
Notes:
(1) Transient refers to revenue derived from rental of rooms and suites to individuals or groups occupying less than
10 rooms per night and who do not have contracted annual rates with the Hotel.
(2) Corporate refers to revenue derived from the rental of rooms and suites booked via a corporate or government
entity that has contracted annual rates with the Hotel.
(3) Wholesale refers to revenue derived primarily from the rental of rooms and suites booked via a third party travel
agent on a wholesale contracted rate basis.
Hotel Rooms
The Hotel has a total of 1,051 rooms. All of the rooms in the Orchard Wing (except the presidential
suites) were renovated in five phases between 2000 and 2002. Additional renovations took place
in the first half of 2006 during which the room count was reduced and a new club lounge was
added and the Meritus Club rooms and Premier rooms were renovated.
Room Type Size (sq m)
Room
Count
(1)
Deluxe Room 28.4 33.6 540
Premier Room 28.4 33.6 294
Meritus Club 28.4 33.6 157
Executive Room 48.8 24
Regency Suite 69.6 97.6 21
Executive Suite 56.1 67.2 13
Presidential Suite 153.7 2
Total 1,051
Note:
(1) Excludes 26 new hotel rooms which will be added in 2013.
161
Meeting and Function Rooms
The Hotel has a variety of meeting and function rooms to cater to events of up to 1,840 persons.
The meeting and function rooms are located in both the Orchard Wing and the Main Tower.
Meeting and Function Rooms Size (sq ft) Capacity
(1)
Status
Grange Ballroom 2,615 140 Operating
Grand Mandarin Ballroom 11,000 1,100 Operating
Mandarin Meeting Rooms 5,180 350 Operating
Imperial Ballroom 6,716 250 Operating
Total 25,511 1,840
Note:
(1) Based on theatre layout.
F&B Facilities
The Hotel features a diverse selection of F&B options from its F&B outlets.
Outlet Concept Capacity Status
Chinese restaurant Chinese cuisine 180 Operating
Chatterbox Restaurant serving
local and international
fare
139 Operating
Triple Three International buffet
restaurant
286 Operating
Coffee & Crust Cafe 18 Operating
Bar on 5 Bar lounge 225 Operating
Total 848
Recreational and Other Facilities
The recreational and other facilities in the Hotel include:
Outdoor swimming pool;
Fitness centre;
Tennis court;
Business centre; and
Medical clinic.
162
Awards and Accolades
Listed below are some of the numerous awards and accolades that Mandarin Orchard Singapore
and its F&B outlets have received in recent years:
2013 Hospitality Asia Platinum Awards Regional Series 2011-2013
2012 ASEAN Green Hotel Recognition Award 2012
International Hotel Awards 2012 (Asia Pacific)
Asia Pacific Hotel Awards 2012-2013 5 star award winner of Best Hotel Singapore
World Luxury Hotel Awards (Country Winner Singapore) Mandarin Orchard
Singapore Luxury Hotel
Singapore National Employers Federation Enabling Employers Awards Token of
Recognition
Standards, Productivity and Innovation Board (SPRING) Singapore Service Class
Ministry of Defence (Singapore) Meritorious Defence Partner Award
Singapore Hotel Association Hotel Security Excellence Award 2012
Singapore Prestige Brand Award 2012 Heritage Brands Chatterbox
Health Promotion Board Singapore Health Award (Bronze)
Spring Singapore Business Excellence Certified Organisation
2011 Singapore Hotel Association Singapore Green Hotel Award 2011
Ministry of Defence (Singapore) Meritorious Defence Partner Award
Singapore Hotel Association Hotel Security Excellence Award 2011
Singapore Hotel Association Fire Safety Award 2011
Singapore Hotel Association EXSA (Excellent Service Award) 264 Silver, Gold and
Star recipients
Pacific Asia Travel Association (PATA) Our Productivity Story 2011 Competition Winner
Hotel category
2010 Most Transparent Company Award (Runner Up) SIAS Investors Choice Awards 2010
21st TTG Travel Awards 2010 (Best City Hotel Singapore)
Customer Satisfaction Index Survey for Tourism, Hotels and Accommodation Services
Top 5, Mandarin Orchard Singapore
SHA (Singapore Hotel Association) Excellence Hotel Security Award 2010
Singapore Tatler Singapore Best Restaurant Series 2010
2009 DP Information Group 2009 Singapore 1000 Net Profit Excellence Award in
Hospitality/F&B
163
MANDARIN GALLERY
333A Orchard Road,
Singapore 238897
General Description
Mandarin Gallery is a high-end retail mall situated within four levels of Mandarin Orchard
Singapore at 333A Orchard Road, Singapore 238897. Mandarin Gallery features upscale
international fashion, lifestyle, services and food and beverage tenants. The property is situated
along Orchard Road between the intersections of Orchard Link and Grange Road, in the heart of
Singapores premier hotel, shopping and entertainment district. Mandarin Gallery comprises a
total GFA of 196,336 sq ft with an NLA of 125,293 sq ft and has a wide main frontage of 152 metres
along Orchard Road, providing a high degree of visibility. Car parking spaces are located in the
multi-level carpark and basement levels, and are shared with and operated by Mandarin Orchard
Singapore. Mandarin Gallery commenced operations in November 2009 after undergoing
renovation at a cost of approximately S$200 million to transform it into a high-end shopping and
lifestyle destination. It officially opened on 28 January 2010.
As at 31 March 2013, Mandarin Gallery is fully leased and has 101 committed tenancies. The REIT
Manager negotiates leases individually with each tenant, using its standard set of lease terms as
the starting point. Generally, the typical lease terms range from two to five years, and incorporate
annual rent revisions and renewal option periods. Typical leases provide for payment of basic rent,
service charge and advertising and promotion charges. In addition, most tenancies include
payment of Turnover Rent based on gross sales turnover.
164
A summary of selected information on Mandarin Gallery is set out in the table below:
Completion Date 2009
(1)
Leasehold Tenure
(2)
99-year lease commencing from 1 July 1957
Property Type Retail mall with high-end fashion, lifestyle,
services and F&B tenants
Number of committed tenancies 101
(3)
Approximate GFA (sq ft) 196,336
Approximate NLA (sq ft) 125,293
Carpark Lots N.A.
Weighted average lease expiry by retail
rental income (for the three months
ended 31 March 2013) (years)
2.2
Weighted average lease expiry by NLA
(as at 31 March 2013) (years)
2.4
Appraised Value by C&W (as at 31 March
2013) (S$ million)
536
Appraised Value by Jones Lang LaSalle
525
Zoning Hotel with a gross plot ratio of 4.9+
Notes:
(1) This refers to the year of completion of the refurbishment of Mandarin Gallery.
(2) This refers to the length of leasehold title acquired directly or indirectly by OUE H-REIT under the Property Sale and
Purchase Agreement.
(3) This includes licence agreements for, amongst others, signage and the ATM.
Tenant Information
As at 31 March 2013, Mandarin Gallery has 86 tenants. The major tenants in Mandarin Gallery
include Club 21 Pte Ltd, Richemont Luxury (Singapore) Pte. Ltd. and VGO Corporation Limited,
amongst others. Premium retail brands represented in Mandarin Gallery include Paul Smith, Y-3,
Fred Perry Laurel Wreath, Mauboussin, Bathing Ape, Vertu and Hugo BOSS. Mandarin Gallery
also boasts a variety of F&B tenants, including Ippudo Ramen, Ito-Kacho Restaurant, Antoinette
and Suju Japanese Restaurant. The top 10 tenants contributed to 58.7% of Mandarin Gallerys
retail rental income for the three months ended 31 March 2013. All but one of the top 10 tenants
(Defred Jewellers Pte. Ltd.) are contracted till 2015 or 2016, thereby ensuring stability of Mandarin
Gallerys portfolio.
165
The following table sets out selected information about the top 10 tenants of Mandarin Gallery by
retail rental income for the three months ended 31 March 2013:
No. Tenant
(1)
Trade Sector
Lease
Expiry Date
Percentage
of Occupied
Net Lettable
Area (%)
(3)
Percentage
of retail
rental
income (%)
1 Club 21 Pte
Ltd
(2)
Fashion apparel 2015 and
2016
13.6 24.1
2 Richemont
Luxury
(Singapore)
Pte. Ltd.
Shoes, leather
goods and
accessories
2016 4.3 7.3
3 VGO
Corporation
Limited
Fashion apparel 2015 2.7 5.0
4 Vertu
(Singapore)
Pte. Ltd.
Shoes, leather
goods and
accessories
2015 1.9 4.6
5 Kwang Sia
Pte. Ltd.
6 Lawrys The
Prime Rib
Singapore
Pte. Ltd.
F&B 2015 5.1 3.2
7 Frank Global
Jewellery Co.
Pte. Ltd.
Watches and
jewellery
2015 1.2 2.8
8 Mauboussin
Singapour
Pte Ltd
Watches and
jewellery
2015 1.2 2.7
9 Kwang Sia
Ausway Pte. Ltd.
10 Defred Jewellers
Pte. Ltd.
Watches and
jewellery
2014 1.4 2.4
Top 10 Tenants 35.5 58.7
Other Tenants 64.5 41.3
Total 100.0 100.0
Notes:
(1) In descending order based on the percentage of retail rental income accounted by each tenant.
(2) Club 21 Pte Ltd has signed more than one tenancy agreement for shops which includes various brands in the fashion
apparel trade sector and has resulted in more than one tenancy expiry date.
(3) Based on occupied NLA for the three months ended 31 March 2013. NLA is considered occupied when rental
166
Trade Sector Analysis
The chart below provides a breakdown by retail rental income of Mandarin Gallery for the three
months ended 31 March 2013.
Fashion
Apparel
46%
Accessories
14%
Watches &
Jewellery
13%
F&B
9%
Living &
Lifestyle
7%
Hair & Beauty
7%
Services
2%
Travel
2%
The chart below provides a breakdown by NLA
1
of Mandarin Gallery.
Fashion
Apparel
35%
F&B
15%
Living & Lifestyle
15%
Hair &
Beauty
13%
Accessories
9%
Watches &
Jewellery
7%
Services
3%
Travel
3%
1 Based on occupied NLA for the three months ended 31 March 2013. NLA is considered occupied when rental
167
Lease Expiry Profile
The following table sets out information on leases that have expired and those that have been
renewed by existing tenants during the period indicated:
Total
number of
expiring
leases
NLA of
expiring
leases
(sq ft)
Expiring
leases as a
percentage
of NLA
(%)
Total NLA
of leases
renewed
(sq ft)
Renewal
rate by
number of
leases
(%)
Renewal
rate by
NLA
(%)
FY2012 59 63,193 50.4 42,903 62.7 67.9
FY2011 3 1,345 1.1
FY2010
(1)

Total/Average 62 64,538 51.5 42,903 62.7 67.9
Note:
(1) No leases expired in FY2010 as all leases for Mandarin Gallery only commenced from November 2009 onwards.
The weighted average lease expiry by NLA of Mandarin Gallery as at 31 March 2013 is 2.4 years,
and the weighted average lease expiry by retail rental income for the three months ended 31
March 2013 is 2.2 years.
Due to Mandarin Gallerys commencement of operations in 2009, majority of the Malls leases are
expected to expire in FY2015E and FY2016E, after finishing their second lease term. In order to
mitigate the concentration risk, early renewals and replacement of poor performing tenants were
undertaken to stagger the leases expiring. As at 31 March 2013, approximately 50.1% and 29.2%
of its leases by NLA are expected to expire in FY2015 and FY2016, respectively, while
approximately 50.9% and 22.7% of its leases by retail rental income for the first 3 months ended
31 March 2013 are expected to expire in FY2015E and FY2016E, respectively. The graphs below
illustrate the lease expiry profile of Mandarin Gallery by NLA and retail rental income as at 31
March 2013 and for the three months ended 31 March 2013, respectively.
0.9%
19.8%
50.1%
29.2%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
FY2013E FY2014E FY2015E FY2016E
Lease Expiry Profile by NLA (as at 31 March 2013)
168
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Lease Expiry Profile by Retail rental income (for the three months ended 31 March 2013)
11.5%
FY2013E FY2014E FY2015E
FY2016E
14.9%
50.9%
22.7%
SPONSOR ROFR PROPERTIES
The Sponsor ROFR Properties include Crowne Plaza Changi Airport, Meritus Mandarin Haikou
and Meritus Shantou China, which the Sponsor would be obliged to offer to OUE H-Trust should
the Sponsor decide to divest
1
.
Crowne Plaza Changi Airport
Crowne Plaza Changi Airport is a business hotel located at 75 Airport Boulevard, Singapore
819664.
The global brand name hotel is the first and only hotel situated within the vicinity of the passenger
terminals of Singapores Changi Airport. Crowne Plaza Changi Airport is seamlessly connected to
Terminal 3 on both the arrival and departure levels and easily accessible from Terminals 1 and 2
by the airport Skytrain. It is within a short distance to Changi Business Park and Singapore Expo
and is connected to the city by expressway and MRT.
Crowne Plaza Changi Airport comprises a total GFA of 336,943 sq ft. The building, designed by
award-winning architectural firm WOHA, contains 320 hotel rooms
2
, including 27 suites. It also
has eight meeting rooms and a ballroom, its location being particularly suited for business
travellers. Construction commenced in December 2006 and the hotel officially opened in May
2008. The Sponsor Group completed its acquisition of Crowne Plaza Changi Airport in July 2011.
Crowne Plaza Changi Airport was voted one of the Worlds Best Airport Hotels at the Skytrax
World Airport Awards 2011, and one of the Best Airport Hotels in Asia Pacific at the Business
Traveller Asia-Pacific Awards 2010.
1 Marina Mandarin was not included as a Sponsor ROFR Property as the Sponsor only has an effective stake of 30.0%
in Marina Mandarin and does not have majority control over the property. Currently, 6 Shenton Way Towers One and
Two is not a Sponsor ROFR Property as it does not fall within OUE H-REITs investment mandate under the category
of hospitality-related purposes, because 6 Shenton Way Towers One and Two is not an asset which is either
complementary to or adjoining hospitality assets which are owned by OUE H-REIT or which OUE H-REIT has
committed to buy.
2 Excludes the proposed additional 200 hotel rooms expected to be developed on the plot of land adjacent to Crowne
169
Meritus Mandarin Haikou
Meritus Mandarin Haikou is an upscale hotel located at 18 Wenhua Road, Haikou, Hainan
Province, PRC.
Meritus Mandarin Haikou comprises a total GFA of 578,748 sq ft, and comprises a 23-storey tower
with two basement levels. The hotel has 318 rooms, 128 car parking spaces, four F&B outlets and
six meeting rooms, as well as recreational facilities such as the Meritus Lifestyle Club. It also
contains the largest column-free ballroom in Haikou. Construction commenced in 1994, and the
hotel officially opened on 1 August 1997.
Meritus Mandarin Haikou is in the heart of Haikous financial district, and its eastern front faces
Binhai Avenue, Haikous main thoroughfare. The leasehold tenure for the hotel expires on 30
March 2059. Meritus Mandarin Haikou is wholly-owned by the Sponsor Group.
Meritus Shantou China
Meritus Shantou China is an upscale hotel located at 97 Jinsha East Road, Shantou, Guangdong
Province, PRC.
The upscale hotel is near Shantous financial district and comprises a total GFA of 711,845 sq ft.
Construction commenced in 1997 and the hotel opened in August 2001. It comprises a 21-storey
tower encompassing 318 rooms, four F&B outlets, five meeting rooms, a ballroom and
recreational facilities, including an indoor swimming pool, the Meritus Lifestyle Club and the
Meritus Recreational Club.
The leasehold tenure for the hotel expires on 23 September 2047. The Sponsor Group has an
80.0% interest in the ownership of Meritus Shantou China.
OTHER GENERAL INFORMATION ABOUT THE INITIAL PORTFOLIO
Fire protection
The fire protection and security measures for each of Mandarin Orchard Singapore and Mandarin
Gallery are manned on a 24-hour basis. Each of the fire protection systems comprises automatic
sprinklers, smoke detectors, dry and wet riser systems, fire alarm systems, hose reel systems and
portable fire extinguishers.
Capital expenditure
The cost of FF&E at Mandarin Orchard Singapore will be borne by the Master Lessee under the
Master Lease Agreement, while other capital expenditures with respect to Mandarin Gallery will
be borne by OUE H-REIT. Expenditure that is capital in nature will be borne by OUE H-REIT as
provided in the Master Lease Agreement.
In respect of each fiscal year, the Master Lessee of Mandarin Orchard Singapore will submit an
FF&E plan to the REIT Manager for review and approval listing out the existing FF&E items and
the anticipated FF&E works proposed for the year (Agreed FF&E Plan), including acquisitions,
replacements and estimated costs.
The Master Lessee of Mandarin Orchard Singapore will also set aside, in an FF&E reserve, an
amount equal to 3.0% of the anticipated revenue as set out in the agreed budget for that fiscal
year (FF&E Reserve). The FF&E Reserve will be used and disbursed only in accordance with
the Agreed FF&E Plan. Any unused amount in the FF&E Reserve at the end of a fiscal year will
be carried forward to the next fiscal year, but does not reduce the required contribution to the
170
FF&E Reserve for that fiscal year. All unutilised amounts standing to the credit of the FF&E
Reserve (i) at the end of the first 10 years of each term, (ii) at the end of each term, and (iii) at
the end or earlier termination of the Master Lease, will be the property of OUE H-REIT and shall
be paid in cash by the Master Lessee to the OUE H-REIT or as otherwise directed by OUE H-REIT.
Insurance
The Initial Portfolio is insured in accordance with industry practice in Singapore. Currently, the
Initial Portfolio is insured by the Sponsor. With effect from the Listing Date, the REIT Trustee will
take out and maintain, at OUE H-REITs cost, property all risks policy, terrorism policy, public
liability policy, and business interruption insurance for the respective rights and interests of the
Master Lessor and the Master Lessee. The Master Lessee is required to pay the insurance
premium in respect of the business interruption policy attributable to the insurance coverage for
the Master Lessees interest. Going forward the Master Lessee must, at their own cost, take up
and maintain public liability insurance, insurance related to workers compensation and contract
works insurance (in respect of any works undertaken or carried out by the Master Lessee).
Legal Proceedings
None of OUE H-Trust, OUE H-REIT, OUE H-BT, the REIT Manager, the Trustee-Manager, the
Property Manager or the Master Lessee is currently involved in any material litigation nor, to the
best of the knowledge of the Managers, is any material litigation currently contemplated or
threatened against OUE H-Trust, OUE H-REIT, OUE H-BT, the REIT Manager, the Trustee-
Manager, the Property Manager or the Master Lessee.
Easement Rights
The land on which Mandarin Orchard Singapore and Mandarin Gallery are situated, and its
neighbouring land, each enjoys and is subject to easement rights over and against the other. Such
easement rights were granted by the original lessee of the land and the said neighbouring land.
Historically the rights of use have not been strictly adhered to by all parties. OUE does not rule
out any proceedings arising in connection with the easement rights and is of the view that any
claim would likely be for damages.
Encumbrances
As at the Listing Date, Mandarin Orchard Singapore and Mandarin Gallery will be encumbered by
a registered first legal mortgage in connection with the Term Loan Facilities and Revolving Credit
Facility.
The Term Loan Facilities and the Revolving Credit Facility are also secured by:
deposits/proceeds in respect of Mandarin Gallery; and
an assignment of all rights, titles, benefits and interests in connection with any master lease
master lease in respect of Mandarin Orchard Singapore;
171
Gallery.
Seasonality
Generally, the Singapore hospitality sector experiences higher activity levels and better
performance in the second half of the year as compared to the first half. Different seasonality
trends impact different segments of Singapores hospitality sector. For Mandarin Orchard
Singapore, typically the months of May, June, October, and November experience the highest
demand from corporate hotel guests, while the highest demand from leisure guests occurs during
the Christmas and New Year festive season, as well as during Hari Raya, the holiday that marks
the end of Ramadan. Hotel demand is also driven by major MICE events such as the annual
Formula One Singapore Grand Prix in September, the bi-annual Singapore Airshow which
typically takes place in February, the annual CommunicAsia which typically takes place in June,
and the bi-annual Food & Hotel Asia which typically takes place in April.
Marketing and Leasing Activities
The Hotel Manager of Mandarin Orchard Singapore will engage in sales and marketing activities
targeted at Mandarin Orchard Singapores main sources of bookings as broken down by industry
segment and channel, including corporate procurement and human resource departments,
corporate secretaries, travel agents, relocation agents, housing agents and customers.
Examples of marketing activities undertaken by the Hotel Manager include:
(i) channel management on online travel agents, by approving tactical campaigns, promotions
with partners and channel marketing;
(ii) corporate marketing activities, which help to retain loyal customers through entertainment
and joint calls for key accounts for rapport building; and
(iii) through travel agents and other related agencies, via tactical promotions, tie-ups with key
partners and rapport building.
Mandarin Gallery will be actively marketed by the Property Manager to prospective tenants in
desired target groups through direct contact with the prospective tenants and liaising with property
agents. Viewings of the premises will be conducted regularly with prospective tenants. The REIT
Manager will also explore opportunities for joint marketing efforts and other mutually beneficial
opportunities with the Sponsor. The REIT Manager believes that such a proactive leasing
approach and strategy will assist OUE H-REIT to attract high quality tenants to Mandarin Gallery.
172
MANAGEMENT AND CORPORATE GOVERNANCE
OUE H-TRUST
OUE H-Trust comprises OUE H-REIT, a Singapore-based REIT, and OUE H-BT, a Singapore-
based business trust registered under the BTA. The REIT Manager and the Trustee-Manager,
being the responsible entities of OUE H-REIT and OUE H-BT, respectively, each have their own
board of directors and their own set of procedures in relation to corporate governance.
Due to the different legislative and regulatory requirements in relation to a REIT as compared with
a business trust, the corporate governance procedures and disclosure requirements in relation to
the REIT Manager are different from those in relation to the Trustee-Manager.
The REIT Manager
The REIT Manager, OUE Hospitality REIT Management Pte. Ltd., was incorporated in Singapore
under the Companies Act on 17 April 2013. The REIT Manager has an issued and paid-up share
capital of S$1,000,000. Its registered office is at 333 Orchard Road #33-00, Singapore 238867
and its telephone and fax numbers are +65 6831 6000 and +65 6880 2422 respectively. The REIT
Manager is a wholly-owned subsidiary of the Sponsor.
The REIT Manager has been issued a CMS Licence for REIT management pursuant to the SFA
on 2 July 2013.
The REIT Trustee
The REIT Trustee, RBC Investor Services Trust Singapore Limited, is a company incorporated in
Singapore and registered as a trust company under the Trust Companies Act, Chapter 336 of
Singapore (the Trust Companies Act). It is approved to act as a trustee for authorised collective
investment schemes under Section 289(1) of the SFA. As at the date of this Prospectus, the REIT
Trustee has an issued and paid-up capital of S$6,000,000. The REIT Trustees registered office
is located at 20 Cecil Street, #28-01 Equity Plaza, Singapore 049705.
The Trustee-Manager
The Trustee-Manager of OUE H-BT is OUE Hospitality Trust Management Pte. Ltd., and is a
wholly-owned subsidiary of the Sponsor.
The Trustee-Manager was incorporated in Singapore under the Companies Act on 17 April 2013.
It has an issued and paid-up capital of S$1.00 and its registered office is located at 333 Orchard
Road #33-00, Singapore 238867. The telephone and facsimile numbers of the Trustee-Manager
are +65 6831 6000 and +65 6880 2422 respectively.
Under Section 10(2)(a) of the BTA, the Trustee-Manager is required to act in the best interests of
all the holders of OUE H-BT Units as a whole. Further, under Section 11(1)(a) of the BTA, a
Director of the Trustee-Manager is required to act honestly and exercise reasonable diligence in
the discharge of the duties of his office and, in particular, shall take all reasonable steps to ensure
that the Trustee-Manager discharges its duties under, among other things, Section 10(2)(a) of the
BTA.
173
The MAS has granted the Trustee-Manager an exemption from compliance with Sections 10(2)(a)
and 11(1)(a) of the BTA to the extent that Sections 10(2)(a) and 11(1)(a) of the BTA require the
Trustee-Manager and the Trustee-Manager Directors to act in the best interests of the holders of
OUE H-BT Units only, subject to the conditions that (a) the Trustee-Manager shall ensure that the
OUE H-BT Units remain stapled to the OUE H-REIT Units, and (b) the Trustee-Manager and the
Trustee-Manager Directors shall act in the best interests of all Stapled Securityholders as a whole.
In the event that OUE H-BT becomes active and engages in development contracts which carry
a substantially different risk as compared with OUE H-REIT, such transactions (including
contracts) should be subject to the threshold set out in Rule 1006 of the Listing Manual.
Board of Directors of the Managers
The Board of Directors of the Managers is entrusted with the responsibility for the overall
management of the Managers.
While OUE H-REIT remains stapled to OUE H-BT, in order to avoid any conflict between OUE
H-REIT and OUE H-BT, each of the directors of the REIT Manager Board will also be a director
of the Trustee-Manager Board and vice versa.
The following table sets forth information regarding the Directors of the Managers:
Name Age Address Position
Mr Christopher James
Williams
54 c/o 333 Orchard Road
#33-00,
Singapore 238867
Chairman and
Non-Executive Director
Professor Neo Boon Siong 55 c/o 333 Orchard Road
#33-00,
Singapore 238867
Independent Director
Mr Sanjiv Misra 53 c/o 333 Orchard Road
#33-00,
Singapore 238867
Mr Liu Chee Ming 62 c/o 333 Orchard Road
#33-00,
Singapore 238867
Mr Ong Kian Min 52 c/o 333 Orchard Road
#33-00,
Singapore 238867
Mr Chong Kee Hiong 47 c/o 333 Orchard Road
#33-00,
Singapore 238867
Executive Director and
Chief Executive Officer
As at the Latest Practicable Date, being 28 June 2013, none of the Directors of the Managers has
any family relationship with or is related to one another, with any Executive Officers of the REIT
Manager, or with any employee of the REIT Manager upon whose work OUE H-Trust is dependent
on.
In addition, as at the Latest Practicable Date, being 28 June 2013, save as disclosed in this
Prospectus, none of the Directors of the Managers are related to any person with an interest in
not less than 5.0% of the shares in issue (Substantial shareholder) of the Managers or any
174
Stapled Securityholder with an interest in one or more Stapled Securities constituting not less than
5.0% of all the Stapled Securities in issue (Substantial Stapled Securityholder) as at the
Listing Date.
None of the independent directors of the Managers sits on the boards of the principal subsidiaries
of OUE H-REIT and OUE H-BT that are based in Singapore or other jurisdictions.
Each of the independent directors of the Managers confirms that they are able to devote sufficient
time to discharge their duties as an independent director of the Managers. Based on the
considerations that: (a) Mr Ong will be independent as the companies which he is a director of are
not in the same real estate sector as OUE H-Trust; (b) Mr Ong will have sufficient time to
discharge his duties as a director of the Managers as he is currently not employed as a full-time
executive with any company
1
; (c) for the boards of the listed companies which Mr Ong currently
sits on, he is an independent non-executive director, and for the board of the private companies,
Mr Ong sits on these boards either as non-executive director or as a director representing his
shareholding interests; and (d) Mr Ong has a good track record of attending the board meetings
of the listed companies (as indicated in their latest published annual reports), nothing has come
to the attention of the Directors (excluding Mr Ong) that causes them to believe that Mr Ong does
not have sufficient time to discharge his responsibilities as an independent director on the Board
of the Managers.
Experience and Expertise of the Board of Directors of the Managers
Information on the business and working experience of the Directors of the Managers are set out
below.
Mr Christopher James Williams is the Chairman and Non-Executive Director of the Board of
Directors of the Managers.
Mr Williams is a founding partner of Howse Williams Bowers, Hong Kong and was previously a
partner of Richards Butler, Hong Kong from May 1994 to December 2007, a partner of Richards
Butler in Association with Reed Smith from January 2008 to December 2010 and a partner of Reed
Smith Richards Butler from January 2011 to December 2011. He is the Deputy Chairman of the
Sponsor and has been the non-Executive Chairman of Food Junction Holdings Limited since
2009.
Mr Williams specialises in corporate finance, mergers and acquisitions, direct investment and
corporate restructurings and reorganisations. He also advises on corporate governance and
compliance. His practice encompasses Hong Kong and the Asia Pacific region, particularly
Indonesia and Singapore. He has been named in the Guide to the Worlds Leading Mergers and
Acquisitions Lawyers as well as the International Whos Who of Merger and Acquisition Lawyers
as one of the worlds top mergers and acquisitions lawyers.
Mr Williams qualified as a solicitor in England and Wales in 1986 and was admitted as a solicitor
in Hong Kong in 1991. He holds a Bachelor of Arts (Honours) in International Relations and
Economics from the University of Reading, United Kingdom.
1 Mr Ong is the Chief Executive Officer of Kanesaka Sushi Private Limited although this is not on a full-time basis as
his role is to oversee the major strategic and financial issues. The day-to-day operations of Kanesaka Sushi Private
Limited are managed by a dedicated managing director with full complement of a restaurant service manager, chefs,
waitresses and other staff.
175
Professor Neo Boon Siong is an Independent Director of the Board of Directors of the Managers.
He is also a Professor and formerly served as Dean of the Nanyang Business School of Nanyang
Technological University, Singapore from 1998 to 2004.
After his appointment as Dean, Professor Neo remained a Professor at the Nanyang Business
School from 2004 to 2005 before accepting an appointment as the Director of Asia
Competitiveness Institute at the Lee Kuan Yew School of Public Policy in the National University
of Singapore from 2005 to 2010. He returned to the Nanyang Business School as Professor in
2011. During these appointments, his duties covered areas of education, research and
consultancy.
He currently serves as a non-executive director of Oversea-Chinese Banking Corporation Limited,
k1 Ventures Limited, Keppel Telecommunications & Transportation Ltd, and J. Lauritzen
Singapore Pte. Ltd..
Professor Neo holds a Bachelor of Accountancy with Honours from the National University of
Singapore and a Master of Business Administration and Ph.D from University of Pittsburgh. He is
a Certified Public Accountant (Singapore).
Mr Sanjiv Misra is an Independent Director of the Board of Directors of the Managers.
Mr Misra is the President of Phoenix Advisers Pte Ltd, a boutique advisory and principal investing
business, which he established in March 2009. He is also Chairman of the Asia Pacific Advisory
Board for Apollo Management, the global private equity and alternative asset management firm.
Mr Misra is a member of the Board of Trustees of Singapore Management University (SMU), the
SMU Enterprise Board, the Board of Directors of the National University Health System and the
Investment Committee of SMU. He is a member of the Board of Directors of Edelweiss Financial
Services Limited, a Bombay Stock Exchange-listed company, and Invenio Financial Services Pte
Ltd, a subsidiary of Olam International Ltd.
Prior to establishing Phoenix Advisers Pte Ltd, Mr Misra spent 11 years at Citigroup from February
1997 to May 2008, most recently as Head of the Asia Pacific Corporate Bank from June 2004 to
May 2008. Prior to his appointment to this position, Mr Misra was the Chief Executive Officer of
Citigroups Global Corporate and Investment Banking Group in Singapore and Brunei and
Citigroup Country Officer for Singapore. From 1999 to 2003, he was Head of Asia Pacific
Investment Banking, based in Hong Kong. From January 1997 to March 1999, he served as Head
of Equity Capital Markets for Asia-Pacific.
Between 1986 and 1997, Mr Misra worked in the Investment Banking Division at Goldman Sachs
& Co, in New York, Hong Kong and Singapore.
Mr Misra holds a Bachelor of Arts degree in economics from St. Stephens College, Delhi
University, a post-graduate diploma in management from the Indian Institute of Management,
Ahmedabad, and a Master of Management from the J.L. Kellogg Graduate School of Management
at Northwestern University, Evanston, Illinois, USA.
Mr Liu Chee Ming is an Independent Director of the Board of Directors of the Managers.
Mr Liu has been a member of the Takeovers Appeal Committee under the Hong Kong Securities
and Futures Commission since May 1995, and the Deputy Chairman of the Takeovers and
Mergers Panel since April 2008, where his duties include reviewing mergers and acquisition cases
and dealing with the relevant appeals.
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Mr Liu is currently the Managing Director of Platinum Holdings Company Limited, which he
established in March 1996, and oversees its stock broking, corporate finance and asset
management business. He has been an independent non-executive director of Kader Holdings
Company Limited (a company listed on the Hong Kong Stock Exchange) since June 1998 and an
independent non-executive director of StarHub Ltd. (a company listed on the SGX-ST) since
August 2004. He has been an independent non-executive director of Haitong Securities Company
Ltd. (a company listed on the Hong Kong and Shanghai stock exchanges) since November 2011.
Mr Liu holds a Bachelors degree in Business Administration from the former University of
Singapore.
Mr Ong Kian Min is an Independent Director of the Board of Directors of the Managers.
Mr Ong is an advocate and solicitor practising as a consultant with Singapore law firm Drew &
Napier LLC, which he joined in October 2000. He was called to the Bar of England and Wales in
1988 and to the Singapore Bar the following year. In his more than 20 years of legal practice, he
focused on corporate and commercial law such as mergers and acquisitions, joint ventures,
restructuring and corporate finance. In addition to his legal practice, he is a senior adviser of Alpha
Advisory Pte. Ltd., a boutique financial and corporate advisory firm, which he joined in January
2010, and the Chief Executive Officer of Kanesaka Sushi Private Limited, which owns and operates
two fine dining Japanese restaurants in Singapore, which he also joined in January 2010.
He is currently the non-executive chairman of HUPSteel Limited and an independent non-
executive director of several other companies listed on the SGX-ST, namely BreadTalk Group
Limited, China Energy Limited, Food Empire Holdings Ltd, GMG Global Ltd, Jaya Holdings
Limited, Penguin International Ltd and Silverlake Axis Ltd. He chairs the audit committee of a
number of these listed companies (namely BreadTalk Group Limited, Food Empire Holdings Ltd,
Jaya Holdings Limited, Penguin International Ltd and Silverlake Axis Ltd) and is the lead
independent director of BreadTalk Group Limited, China Energy Limited and Penguin International
Ltd.
Mr Ong was an elected Member of Parliament in Singapore from January 1997 to April 2011. In
1979, he was awarded the Presidents Scholarship and Singapore Police Force Scholarship. He
holds a Bachelor of Laws (Honours) external degree from the University of London in England and
a Bachelor of Science (Honours) degree from the Imperial College of Science & Technology,
England.
Mr Chong Kee Hiong is the Chief Executive Officer of the REIT Manager and an Executive
Director of the Board of Directors of the Managers.
Mr Chong has over 20 years of financial and REIT management experience.
Prior to joining the REIT Manager, Mr Chong was the Chief Executive Officer of The Ascott Limited
from February 2012 to May 2013 where he was responsible for determining the overall business,
investment and operational strategies for The Ascott Limited. He was the Chief Executive Officer
of Ascott Residence Trust Management Limited from 2005 to February 2012. From May 2001 to
September 2004, he was with Raffles Holdings Limited (Raffles Holdings) as their Chief
Financial Officer where he was a member of the Management Committee responsible for charting
the companys growth and development strategies. Raffles Holdings was a leading international
hotel chain headquartered in Singapore, which owned and managed a chain of luxury and
business hotels within and beyond Singapore.
Mr Chong is currently the President of the Orchid Country Club General Committee and is a
member of the audit committee of Sentosa Development Corporation.
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Mr Chong holds a Bachelor of Accountancy degree from the National University of Singapore and
completed Harvard Business Schools Advanced Management Program in 2008. He is a member
of the Institute of Certified Public Accountants of Singapore.
Each of the Directors of the Managers has served as a director of a public-listed company and/or
manager of a publicly-listed REIT or business trust and has appropriate experience to act as
Directors of the Managers and are familiar with the rules and responsibilities of a director of a
publicly-listed company and/or manager or trustee-manager of a publicly-listed REIT or business
trust.
List of Present and Past Principal Directorships of the Directors
A list of the present and past directorships of each Director of the Managers over the last five
years preceding the Latest Practicable Date, being 28 June 2013, is set out in Appendix H, List
of Present and Past Principal Directorships of Directors and Executive Officers of the REIT
Manager and the Trustee-Manager.
OUE H-REIT
Management Reporting Structure of the REIT Manager

Asset and
Investment Manager
Mr Jeffrey Wong Yew Cheong
Assistant Investment
Manager
Mr Chen Yi Chung
Board of Directors
Mr Christopher James Williams (Chairman and Non-Executive Director)
Professor Neo Boon Siong (Independent Director)
Mr Sanjiv Misra (Independent Director)
Mr Liu Chee Ming (Independent Director)
Mr Ong Kian Min (Independent Director)
Mr Chong Kee Hiong (Executive Director)
Mr Chong Kee Hiong
Chief Financial Officer/
Investor Relations
Manager
Mr Rudi Chuan Hwee Hiow
Audit and Risk Committee
Mr Sanjiv Misra (Chairman)
Professor Neo Boon Siong
Mr Liu Chee Ming
Mr Ong Kian Min
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The REIT Manager Executive Officers
The REIT Manager Executive Officers are entrusted with the responsibility for the daily operations
of the REIT Manager. The following table sets forth information regarding the REIT Manager
Executive Officers:
Mr Chong Kee Hiong 47 c/o 333 Orchard Road
#33-00,
Singapore 238867
Chief Executive
Officer
Mr Rudi Chuan Hwee Hiow 56 c/o 333 Orchard Road
#33-00,
Singapore 238867
Chief Financial Officer
/ Investor Relations
Manager
Mr Jeffrey Wong Yew Cheong 51 c/o 333 Orchard Road
#33-00,
Singapore 238867
Asset and Investment
Manager
Mr Chen Yi Chung 41 c/o 333 Orchard Road
#33-00,
Singapore 238867
Assistant Investment
Manager
Roles and Responsibilities of the REIT Manager Executive Officers
The Chief Executive Officer of the REIT Manager is responsible for working with the REIT
Manager Board to determine the overall business, investment and operational strategies for OUE
H-REIT. The Chief Executive Officer will also work with the other members of the management
team of the REIT Manager and the Master Lessee to ensure that the business, investment and
operational strategies of OUE H-REIT are carried out as planned. In addition, the Chief Executive
Officer is responsible for the overall management and planning of the strategic direction of OUE
H-REIT, including overseeing the acquisition of hospitality and hospitality-related assets and asset
and property management strategies for OUE H-REIT.
The Chief Financial Officer/Investor Relations Manager of the REIT Manager is responsible for
the finances of OUE H-REIT. A key role of the Chief Financial Officer is to focus, monitor and
report on the financial performance of OUE H-REIT. The Chief Financial Officer is also responsible
for the preparation of statutory accounts, co-ordination with external auditors, managing tax affairs
and treasury matters, and preparation of performance reports for investors and regulators. In the
area of investor relations, he is responsible for facilitating communications and liaising with
The Asset and Investment Manager of the REIT Manager is responsible for two integrated
functions investments and asset management. With respect to investments, he is responsible
for identifying, researching and evaluating potential acquisitions and related investments with a
view to enhancing OUE H-REITs portfolio and is concurrently responsible for divestments where
a property is no longer strategic or if it fails to enhance the value of OUE H-REITs portfolio or fails
to be yield accretive. He will also recommend and analyse potential asset enhancement initiatives.
In order to support these various initiatives, he and the assistant investment manager will develop
financial models to test the financial impact of different courses of action. These findings will be
research-driven to help develop and implement the proposed initiatives.
With respect to asset management, he is responsible for formulating the business plans in relation
to OUE H-REITs properties with short, medium and long term objectives, and with a view to
maximising the rental income of OUE H-REIT via proactive asset management. He will work
closely with the Property Manager to implement OUE H-REITs strategies so as to ensure that the
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Initial Portfolio maximise their income generation potential and minimise their expense base
without compromising their marketability. He will also focus on the operations of OUE H-REITs
properties and the implementation of the short to medium term objectives of OUE H-REITs
portfolio.
The Assistant Investment Manager is responsible for providing investment and analytical
support to the Asset and Investment Manager in relation to identifying, researching and evaluating
potential acquisitions and related investments. He will assist in developing financial models and
project financial analysis to test the financial impact of different courses of action. The Assistant
Investment Manager will also help to prepare presentations and press releases, board papers
(management reporting, operations report, aging report, etc.) and other reports to management
and the Directors.
Experience and Expertise of the REIT Manager Executive Officers
Information on the working experience of the REIT Manager Executive Officers is set out below.
Mr Chong Kee Hiong is the Chief Executive Officer of the REIT Manager. Details of his working
experience are set out in the section Management and Corporate Governance OUT H-Trust
Board of Directors of the Managers Experience and Expertise of the Boards of the Managers.
Mr Rudi Chuan Hwee Hiow is the Chief Financial Officer and Investor Relations Manager of the
REIT Manager.
Mr Chuan has over 20 years of financial and REIT management experience, with his most recent
position being the Chief Financial Officer of OUE, where he was responsible for the OUE Groups
corporate finance and planning. During his tenure at the Sponsor Group, he executed the S$870
million acquisition of the DBS Building Towers One and Two (presently known as 6 Shenton Way
Towers One and Two) in September 2010 and secured the S$800 million debt financing for the
acquisition. He also executed the acquisition of Crowne Plaza Changi Airport in June 2011.
Prior to joining the OUE Group in July 2009, Mr Chuan was the Chief Financial Officer at
Lippo-Mapletree Indonesia Retail Trust Management Ltd (presently known as LMIRT
Management Ltd). From 2005 to 2007, he was the Senior Vice President, Finance & Accounting,
of Macquarie Pacific Star Prime REIT Management Limited (presently known as Starhill Global
REIT Management Limited). From 2000 to 2005, he was the Financial Controller of Suntec City
Development Pte Ltd.
Mr Chuan holds a Bachelor of Commerce degree from the University of Otago, New Zealand, and
a Masters degree in Business Administration from the State University of New York. He is a
member of the Institute of Certified Public Accountants of Singapore.
After making all reasonable enquiries, and to the best of their knowledge and belief, nothing has
come to the attention of the members of the Audit and Risk Committee to cause them to believe
that Mr Chuan does not have the competence, character and integrity expected of a Chief
Financial Officer of the REIT Manager. The Audit and Risk Committee considers that Mr Chuans
chartered accountant qualification coupled with his extensive experience of over 20 years of
financial and REIT management experience makes him a suitable candidate to be the Chief
Financial Officer of the REIT Manager. On this basis, the Audit and Risk Committee is of the
opinion that Mr Chuan is suitable as the Chief Financial Officer on the basis of his qualifications
and relevant past experience.
Mr Jeffrey Wong Yew Cheong is the Asset and Investment Manager of the REIT Manager.
Mr Wong has more than 25 years of experience in the hospitality management industry.
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Prior to joining the REIT Manager, Mr Wong was with the Sponsor from November 2012, where his
last held position was Head Organisational Development where he was responsible for the
strategic review and alignment of organisational systems and processes within the Sponsor. From
October 2011 to September 2012, Mr Wong was with Grand Park Wuxi in Jiangsu Province, PRC,
where his last held position was General Manager. From April 2010 to September 2011, Mr Wong
was with Frasers Centrepoint, a subsidiary of F&N, where his last held position was Head of Service
Quality. He was principally engaged in mall management, which involved among others, providing
an understanding of customer segmentation from feedback, putting in place a monitoring
mechanism to track shopping experiences, developing service competencies and service
standards, developing a rewards/recognition programme for the service staff of the mall and its
tenants, and developing shopper engagement programmes and a communication programme
between tenants, shoppers and staff.
From January 1997 to March 2010, Mr Wong was with Frasers Hospitality, also a subsidiary of
F&N, where his last held position was Regional Director. He was principally engaged in serviced
apartment management, which involved, among others, providing supporting operations for
Frasers properties, spear-heading technical services and pre-opening efforts overseas and
setting up operations of Frasers new brand of serviced apartments in China.
Mr Wong holds a Bachelors degree in hotel administration from the University of Nevada, Las
Vegas and a post graduate diploma in business administration from the University of Surrey.
Mr Chen Yi Chung is the Assistant Investment Manager of the REIT Manager.
Mr Chen has more than 10 years of experience in the investment and consultancy industries.
Prior to joining the REIT Manager, Mr Chen was with the Sponsor from November 2008, where his
last held position was Vice President, Investments. From February 2008 to October 2008, Mr
Chen was with Lippo Malls Real Estate Investment Trust Management Ltd, the manager for LMIR
Trust, where his last held position was Manager, Projects.
From June 2006 to January 2008, Mr Chen was with Nokia Pte Ltd, where his last held position
was Manager of Customer and Market Operation and, among others, he oversaw the
implementation of a sales intelligence system in Southeast Asian countries and analysed the
marketing efficiency on products of different categories. From June 2005 to August 2005, Mr Chen
was a Consultant with Bain & Company in Shanghai, PRC, where he was involved in projects
involving a China market entry strategy for a software company and a private equity buyout,
among others. From September 2001 to August 2004, he was with Deloitte & Touche LLP in Texas,
USA, where his last held position was Senior Software Engineer and he analysed the development
needs for the firms product suite and led a development team to convert a legacy tax planning
software to an internet-enabled product, among others. Mr Chen began his career with Cap
Gemini Ernst & Young LLP in Texas, USA in October 2000, where his last held position was Senior
Consultant. Among others, he led a development team to design and co-develop a Credit Reserve
financial software application for a Fortune 100 energy company and established and organised
several technology labs, training materials and information sessions.
Mr Chen holds a Bachelors degree in business administration from Fu Jen Catholic University in
Taiwan, a Masters degree in computer science from the University of Texas at Arlington and a
Masters degree in business administration from the University of Chicago, Booth School of
Business.
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List of Present and Past Principal Directorships of the REIT Manager Executive Officers
A list of the present and past directorships of each REIT Manager Executive Officer over the last
five years preceding the Latest Practicable Date, being 28 June 2013, is set out in Appendix H,
List of Present and Past Principal Directorships of Directors and Executive Officers of the REIT
Manager and the Trustee-Manager.
Property Manager
Executive Officers of the Property Manager
The Property Manager of Mandarin Gallery and the Excluded Commercial Premises is OUE
Property Management Pte. Ltd. The Property Manager is incorporated in Singapore under the
Companies Act and is a wholly-owned subsidiary of the Sponsor.
Under the Individual Property Management Agreement, the Property Manager is, subject to the
overall management and supervision of the REIT Manager, responsible for providing property
management, lease management and marketing services for Mandarin Gallery and the Excluded
Commercial Premises.
As at the Listing Date, the Property Manager will not have its own employees. The services of the
Property Manager will be performed by staff seconded from the Sponsor on a part-time basis,
including the executive officers of the Property Manager (the Property Manager Executive
Officers). The staff of the Property Manager also includes concierge staff who manage Mandarin
Gallery and the Excluded Commercial Premises exclusively.
The REIT Manager is of the view that the Property Manager will be able to perform its duties
satisfactorily as the staff seconded to the Property Manager will be from the Sponsors
experienced pool of staff. Whilst seconded to the Property Manager, there will be appropriate
chinese walls in place from the retail leasing team of the Sponsor.
Experience and Expertise of the Property Manager Executive Officers
Information on the working experience of the Property Manager Executive Officers is set out
below.
Mrs Patrina Tan is the General Manager of the Property Manager.
Mrs Tan has more than 20 years of experience in the retail, marketing and leasing industry.
Mrs Tan is currently the Senior Vice President Retail, Marketing & Leasing at the Sponsor, where
she is responsible for conceptualising and operating Mandarin Gallery and all other retail projects
in the Sponsor Group. Prior to joining the Sponsor in March 2008, Mrs Tan was with Orchard 290
Ltd, a retail property management company and wholly-owned subsidiary of Singapore Press
Holdings Limited appointed to manage Paragon, a shopping mall on Orchard Road, from 2001 to
2008, where her last held position was Deputy General Manager. She was in charge of handling
the day-to-day operations and management of Paragon and the Paragon extension.
Ms Jessica Lim Suan Sim is the Senior Manager of the Property Manager.
Ms Lim has more than 20 years of experience in the retail, marketing and leasing industry.
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Ms Lim is currently Assistant Vice President Retail, Marketing & Leasing at the Sponsor. Prior
to joining the Sponsor in December 2007, Ms Lim was with NUS Co-operative Society Ltd from
1999 to 2007, where her last held position was General Manager. She was overall in charge of the
organisations three retail businesses, leading a team of 40 staff members.
From 1992 to 1998, Ms Lim joined Takashimaya Singapore Ltd and assisted in setting up the
ladies wear department. From 1989 to 1992, Ms Lim was with Metro Singapore Ltd as a buyer for
ladies apparel.
Ms Lim holds a Bachelor of Science (Economics) in Management Studies from the University of
London.
Mr Desmond Ng Choon Hong is the Operations Manager of the Property Manager.
Mr Ng has more than 25 years of experience in the property management and maintenance field.
Mr Ng is currently Operations Manager at the Sponsor, where he is in charge of leading the
operations team to ensure the smooth day-to-day operations of Mandarin Gallery, OUE Bayfront and
the upcoming 6 Shenton Way. Prior to joining the Sponsor in April 2010, Mr Ng was with CapitaMalls
Asia Limited from October 2004 to April 2010, where his last held position was Operations Manager.
He was responsible for leading the operations department of the organisation.
From October 2000 to September 2004, Mr Ng was with the Singapore National Eye Centre,
Singapore General Hospital, where his last held position was Senior Operations Executive. From
August 1998 to September 2000, he was with Waterbanks Properties Pte Ltd, where his last held
position was Senior Property Officer. Prior to that, Mr Ng was with Far East Organization from
June 1993 to July 1998, where his last held position was Maintenance Executive. He began his
career at the Lands & Estates Organisation in March 1986.
Mr Ng holds a Bachelor of Science in Facilities Management from Heriot-Watt University, and also
has a Diploma in Building Maintenance and Conservation from the Singapore Institute of
Engineering Technology and a Certificate in Property Management and Maintenance from the
Singapore Institute of Surveyors & Valuers.
Compliance Officer
The REIT Manager has outsourced the role of the Compliance Officer to the Sponsor
1
. The
Compliance Officer will report to the Chief Executive Officer of the REIT Manager and the REIT
Manager Board and his duties include:
assisting the REIT Manager in putting in place suitable compliance processes to ensure that
the REIT Manager fulfils the compliance requirements under the SFA, the CIS Code
(including the Property Funds Appendix), the Listing Manual, the CMS Licence, and all
applicable laws, regulations and guidelines, as well as updating the Directors, the Chief
Executive Officer, the Executive Officers and the employees of the REIT Manager on such
compliance requirements; and
assisting in any other matters concerning compliance with the SFA, the CIS Code (including
the Property Funds Appendix), the Listing Manual, the CMS Licence and all applicable laws,
regulations and guidelines.
1 The cost of such outsourcing of the role of Compliance Officer will be borne by the REIT Manager.
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Company Secretary of the REIT Manager
The company secretary of the REIT Manager (the Company Secretary) is Mr Ng Ngai. Mr Ng
is a member of the Singapore Association of the Institute of Chartered Secretaries and
Administrators and is also Company Secretary of the Trustee-Manager.
The roles of the Company Secretary include the following:
ensuring that board procedures of the REIT Manager Board are followed;
ensuring, under the direction of the Chairman, good information flows within the REIT
Manager Board and its board committees and between the management and the non-
executive Directors;
assisting the REIT Manager with corporate secretarial administration matters for the REIT
Manager, both in its personal capacity and in its capacity as manager of OUE H-REIT,
including attending all board meetings;
assisting in the application process for the appointment of new directors to the REIT Manager
Board and Trustee-Manager Board; and
assisting the REIT Manager in preparing the announcements and notifications to be
uploaded on the SGXNET as required under the Listing Manual.
Shared Services Arrangements
The REIT Manager will discharge its duties as a manager of OUE H-REIT diligently and may, in
its personal capacity, enter into shared services arrangements with the Sponsor for the provision
of corporate administrative and support services required by the REIT Manager from time to time,
subject to such laws, regulations and guidelines, as may be applicable. Such services may include
information technology support, tax, human resources, legal, regulatory compliance and corporate
secretarial services, internal audit, accounting and book-keeping, risk management, insurance,
corporate communications, information technology and systems management, administration
support, business continuity management as well as data collation to be used by the REIT
Manager to make decisions.
The Key Roles of the REIT Manager Board
The key roles of the REIT Manager Board are to:
guide the corporate strategy and directions of the REIT Manager;
ensure that senior management discharges business leadership and demonstrates the
highest quality of management skills with integrity and enterprise;
oversee the proper conduct of the REIT Manager; and
ensure that measures relating to corporate governance, financial regulations and other
required policies are in place and enforced.
The REIT Manager Board will meet to review the key activities and business strategies of OUE
H-REIT. The REIT Manager Board intends to meet regularly, at least once every three months, to
deliberate the strategic policies of OUE H-REIT, including acquisitions and disposals, approval of
the annual budget and review of the performance of OUE H-Trust.
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Each Director of the REIT Manager has been appointed on the basis of his professional
experience and his potential to contribute to the proper guidance of OUE H-REIT. The Directors
of the REIT Manager will contribute in different ways to further the interests of OUE H-REIT.
The REIT Manager Board will have in place a set of internal controls which sets out approved
limits for capital expenditure, investments and divestments, and borrowings as well as
arrangements in relation to cheque signatories. In addition, sub-limits are also delegated to
various management levels to facilitate operational efficiency.
Taking into account the fact that OUE H-REIT is constituted only on 10 July 2013 and will only
acquire its portfolio on the Listing Date, the Board of Directors of the Managers, with the
concurrence of the REIT Manager Audit and Risk Committee, are of the opinion that the internal
controls as further described in:
Management and Corporate Governance OUE H-REIT The Key Roles of the REIT
Manager Board;
Management and Corporate Governance OUE H-REIT Compliance Officer;
Management and Corporate Governance OUE H-REIT Corporate Governance of the
REIT Manager The REIT Manager Board;
REIT Manager The REIT Manager Audit and Risk Committee;
REIT Manager Dealings in Stapled Securities or, as the case may be, OUE H-REIT Units;
REIT Manager Management of Business Risk;
REIT Manager Conflicts of Interest;
Management and Corporate Governance OUE H-REIT Related Party Transactions The
REIT Managers Internal Control System;
Management and Corporate Governance OUE H-REIT Related Party Transactions
Role of the REIT Manager Audit and Risk Committee for Related Party Transactions;
Related Party Transactions in Connection with the Setting Up of OUE H-REIT and the
Offering;
Other Related Party Transactions;
Exempted Agreements; and
Future Related Party Transactions,
are adequate in addressing financial, operational and compliance risks faced by OUE H-REIT.
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Changes to regulations and accounting standards are monitored closely by the members of the
REIT Manager Audit and Risk Committee. (See Management and Corporate Governance OUE
H-REIT The REIT Manager Audit and Risk Committee for further details.) To keep pace with
regulatory changes, where these changes have an important bearing on the disclosure obligations
of the REIT Manager or its Directors, the REIT Manager Directors will be briefed either during the
meetings of the REIT Manager Board or at specially convened sessions involving the relevant
professionals. The management will also provide the REIT Manager Board with complete and
adequate information in a timely manner through regular updates on financial results, market
trends and business developments.
Four REIT Manager Directors comprising a majority of the REIT Manager Board of six REIT
Manager Directors are non-executive and independent of the management. This enables the
management to benefit from their external, diverse and objective perspectives on issues that are
brought before the REIT Manager Board. It would also enable the REIT Manager Board to interact
and work with the management through a robust exchange of ideas and views to help shape the
strategic process.
The positions of Chairman of the REIT Manager Board and Chief Executive Officer of the REIT
Manager are held by two different individuals in order to maintain effective checks and balances.
The Chairman of the REIT Manager Board is Mr Christopher James Williams, while the Chief
Executive Officer is Mr Chong Kee Hiong.
There is a clear separation of the roles and responsibilities between the Chairman and the Chief
Executive Officer of the REIT Manager. The Chairman is responsible for the overall management
of the REIT Manager Board as well as ensuring that the members of the REIT Manager Board and
the management work together with integrity and competency, and that the REIT Manager Board
engages the management in constructive debate on strategy, business operations, enterprise risk
and other plans. The Chief Executive Officer has full executive responsibilities over the business
directions and operational decisions in the day-to-day management of the REIT Manager.
The REIT Manager Board has separate and independent access to senior management and the
Company Secretary at all times. The Company Secretary attends to corporate secretarial
administration matters and attends all Board meetings. The Board of Directors of the Managers
also have access to independent professional advice where appropriate and whenever requested.
(See Management and Corporate Governance OUE H-REIT Company Secretary of the REIT
Manager for details of the Company Secretary and his qualifications.)
Roles and Responsibilities of the REIT Manager in relation to the management of OUE
H-REIT
The REIT Manager has general powers of management over the assets of OUE H-REIT. The REIT
Managers main responsibility is to manage OUE H-REITs assets and liabilities for the benefit of
the holders of OUE H-REIT Units.
The REIT Manager is responsible for formulating the business plans in relation to OUE H-REITs
properties. The REIT Manager will work closely with the Hotel Manager through the Master Lessee
to implement OUE H-REITs strategies. Further, the REIT Manager will set the strategic direction
of OUE H-REIT and give recommendations to the REIT Trustee on the acquisition, divestment or
enhancement of assets of OUE H-REIT in accordance with its stated investment strategy.
OUE H-REIT is required under the OUE H-REIT Trust Deed to hold an annual general meeting
once in every calendar year and not more than 15 months after the holding of the last preceding
annual general meeting, but so long as OUE H-REIT holds its first annual general meeting within
18 months of its constitution, it need not hold it in the year of its constitution or in the following
year.
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The REIT Manager has covenanted in the OUE H-REIT Trust Deed to use its best endeavours to
carry on and conduct its business in a proper and efficient manner, to ensure that OUE H-REIT
is carried on and conducted in a proper and efficient manner and to conduct all transactions with
or for OUE H-REIT at arms length and on normal commercial terms.
The REIT Manager will also be responsible for ensuring that OUE H-REIT complies with the
applicable provisions of the SFA and all other relevant legislation, the Listing Manual, the CIS
Code (including the Property Funds Appendix), the OUE H-REIT Trust Deed, the Stapling Deed,
the CMS Licence, the Tax Ruling and all relevant contracts.
The REIT Manager may require the REIT Trustee to:
while the OUE H-REIT Units and OUE H-BT Units are stapled together, lend monies to OUE
H-BT out of the OUE H-REIT Deposited Property whenever the REIT Manager considers,
among other things, that such lending is necessary or desirable in order to further the
interests of the Stapled Securityholders as a whole; and
borrow on behalf of OUE H-REIT (upon such terms and conditions as the REIT Manager
deems fit, including the charging or mortgaging of all or any part of the OUE H-REIT
Deposited Property) whenever the REIT Manager considers, among other things, that such
borrowings are necessary or desirable in order to enable the REIT Trustee to meet any
liabilities or whenever the REIT Manager considers it desirable that monies be borrowed or
raised to:
- finance the acquisition of any Authorised Investments, directly or indirectly, through
SPVs;
- finance the repurchase and/or redemption of OUE H-REIT Units by the REIT Manager;
- finance the distributions of OUE H-REIT; or
- finance the on-lending of monies to OUE H-BT for the purpose of furthering the interests
of Stapled Securityholders as a whole.
However, the REIT Manager must not direct the REIT Trustee to incur a borrowing, if to do so,
would mean that OUE H-REITs total borrowings exceed the Aggregate Leverage limit of 35.0%
of the value of the OUE H-REIT Deposited Property at the time the borrowing is incurred. The
Aggregate Leverage of OUE H-REIT may exceed 35.0% (up to a maximum of 60.0%) only if a
credit rating from Fitch Inc., Moodys or Standard and Poors is obtained and disclosed to the
public. OUE H-REIT will continue to maintain and disclose a credit rating so long as its Aggregate
Leverage exceeds 35.0% of the OUE H-REIT Deposited Property.
In the absence of fraud, gross negligence, wilful default or breach of the OUE H-REIT Trust Deed
or the Stapling Deed by the REIT Manager, it shall not incur any liability by reason of any error of
law or any matter or thing done or suffered to be done or omitted to be done by it in good faith
under the OUE H-REIT Trust Deed. In addition, the REIT Manager shall be entitled, for the
purpose of indemnity against any actions, costs, claims, damages, expenses or demands to which
it may be put as manager of OUE H-REIT, to have recourse to the OUE H-REIT Deposited
Property or any part thereof save where such action, cost, claim, damage, expense or demand is
occasioned by the fraud, gross negligence, wilful default or breach of the OUE H-REIT Trust Deed
by the REIT Manager. The REIT Manager may, in managing OUE H-REIT and in carrying out and
performing its duties and obligations under the OUE H-REIT Trust Deed, with the written consent
of the REIT Trustee, appoint such persons to exercise any or all of its powers and discretions and
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to perform all or any of its obligations under the OUE H-REIT Trust Deed, provided always that the
REIT Manager shall be liable for all acts and omissions of such persons as if such acts and
omissions were its own.
Fees Payable to the REIT Manager
Management fees payable to the REIT Manager
The REIT Manager is entitled under the OUE H-REIT Trust Deed to the following management
fees:
a Base Fee of 0.3% per annum of the value of the OUE H-REIT Deposited Property; and
a Performance Fee of 4.0% per annum of the Net Property Income of OUE H-REIT in the
relevant financial year.
For the purpose of calculating the Base Fee and the Performance Fee, if OUE H-REIT holds only
a partial interest in (i) any OUE H-REIT Deposited Property, or (ii) any investment from which any
Net Property Income of OUE H-REIT is derived, such OUE H-REIT Deposited Property or Net
Property Income of OUE H-REIT shall be pro-rated in proportion to the partial interest held.
100.0% of the Base Fee and Performance Fee will be paid in Stapled Securities or, as the case
may be, OUE H-REIT Units (where Unstapling has taken place) for the period from the Listing
Date to the end of Projection Year 2014, and thereafter the REIT Manager may elect to receive
the Base Fee and the Performance Fee in cash or Stapled Securities or, as the case may be, OUE
H-REIT Units or a combination of cash and Stapled Securities or, as the case may be, OUE
H-REIT Units (as it may in its sole discretion determine). Any portion of management fees payable
in the form of Stapled Securities or, as the case may be, OUE H-REIT Units shall be payable
quarterly in arrears and any portion of management fees payable in cash shall be payable within
30 days of the last day of every calendar month in arrears.
For so long as the Stapled Securities or, as the case may be, OUE H-REIT Units are listed, when
management fees are payable in the form of Stapled Securities or, as the case may be, OUE
H-REIT Units, the REIT Manager shall be entitled to receive such number of Stapled Securities or,
as the case may be, OUE H-REIT Units as may be purchased with the relevant amount of the
management fees attributable to the relevant period at an issue price equivalent to the market
price, i.e. (i) (subject to (ii) below) the volume weighted average price per Stapled Security or, as
the case may be, OUE H-REIT Units for all trades on the SGX-ST, in the ordinary course of
trading, for the last 10 Business Days
1
of the relevant period in which the management fees
accrue; or (ii) if the REIT Manager believes that the foregoing calculation does not provide a fair
reflection of the market price of a OUE H-REIT Unit or a Stapled Security (which may include,
among others, instances where the trades on the OUE H-REIT Units or Stapled Securities are very
low or where there is disorderly trading activity in the OUE H-REIT Units or Stapled Securities),
means an amount as determined by the REIT Manager (after consultation with a stockbroker
approved by the REIT Trustee), and as approved by the REIT Trustee, as being the fair market
price and this will be announced on the SGXNET for so long as the OUE H-REIT is listed on the
SGX-ST.
Any increase in the rate or any change in the structure of the REIT Managers management fees
must be approved by an Extraordinary Resolution at a meeting of the holders of OUE H-REIT
Units duly convened and held in accordance with the provisions of the OUE H-REIT Trust Deed.
For the avoidance of doubt, the REIT Managers change in its election to receive cash or Stapled
1 Business Day refers to any day (other than a Saturday, Sunday or gazetted public holiday) on which commercial
banks are open for business in Singapore and the SGX-ST is open for trading.
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Securities or, as the case may be, OUE H-REIT Units or a combination of cash and Stapled
Securities or, as the case may be, OUE H-REIT Units is not considered as a change in structure
of the REIT Managers management fees.
Acquisition fee and divestment fee payable to the REIT Manager
The REIT Manager is also entitled to:
an acquisition fee
1
of 0.75% for acquisitions from Related Parties and 1.0% for all other
cases (or such lower percentage as may be determined by the REIT Manager in its absolute
discretion) of any of the following as is applicable (subject to there being no
double-counting):
(i) the acquisition price of any real estate purchased by OUE H-REIT, whether directly or
indirectly through a holding of shares, units or any other interests in one or more SPVs,
plus any other payments
2
in addition to the acquisition price made by OUE H-REIT or
its SPV to the vendor in connection with the purchase of the real estate (pro-rated if
applicable to the proportion of OUE H-REITs interest);
3
of any real estate which is taken into account when computing the
acquisition price payable for the equity interests of any vehicle holding directly or
indirectly the real estate, purchased by OUE H-REIT, whether directly or indirectly
through a holding of shares, units or any other interests in one or more SPVs, plus any
other payments
6
made by OUE H-REIT (pro-rated, if applicable to the proportion of
OUE H-REITs interest); or
(iii) the acquisition price of any investment purchased by OUE H-REIT, whether directly or
indirectly through one or more SPVs, in any debt securities of any property corporation
or other SPV owning or acquiring real estate or any debt securities which are secured
whether directly or indirectly by the rental income from real estate.
a divestment fee
4
of 0.5%
5
of any of the following as is applicable (subject to there being no
double-counting):
(i) the sale price of any real estate sold or divested by OUE H-REIT, whether directly or
indirectly through one or more SPVs, plus any other payments
6
in addition to the sale
price received by OUE H-REIT or its SPVs from the purchaser in connection with the
sale or divestment of the real estate (pro-rated if applicable to the proportion of OUE
H-REITs interest);
1 No acquisition fee is payable for the transfer of assets from OUE H-BT.
2 other payments refer to additional payments to the vendor of the real estate, for example, where the vendor has
already made certain payments for enhancements to the real estate, and the value of the asset enhancements are
not reflected in the acquisition price as the asset enhancements are not completed, but other payments do not
include stamp duty or other payments to third party agents and brokers.
3 For example, if OUE H-REIT acquires a special purpose company which holds real estate, such underlying value
would be the value of the real estate derived from the amount of equity paid by OUE H-REIT as purchase price and
4 No divestment fee is payable for the transfer of assets to OUE H-BT.
5 There will not be two-tiers of divestment fees payable. The divestment fees payable by OUE H-REIT will be 0.5%
regardless of whether the divestment of assets by OUE-H-REIT is to a Related Party or otherwise.
6 other payments refer to additional payments to OUE H-REIT or its SPVs for the sale of the real estate, for
example, where OUE H-REIT or its SPVs have already made certain payments for enhancements to the real estate,
and the value of the asset enhancements are not reflected in the sale price as the asset enhancements are not
completed, but other payments do not include stamp duty or other payments to third party agents and brokers.
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1
sale price for the equity interests in any vehicle holding directly or indirectly the real
estate, sold or divested by OUE H-REIT, whether directly or indirectly through one or
more SPVs, plus any other payments
2
received by OUE H-REIT or its SPVs from the
purchaser in connection with the sale or divestment of such equity interests (pro-rated
if applicable to the proportion of OUE H-REITs interest); or
(iii) the sale price of the investment sold or divested by OUE H-REIT, whether directly or
Any payment to third party agents or brokers in connection with the acquisition or divestment of
any real estate of OUE H-REIT shall be paid out of the OUE H-REIT Deposited Property and not
by the REIT Manager to such persons.
No acquisition fee is payable for the acquisition of the Initial Portfolio. The acquisition fee and
divestment fee are payable to the REIT Manager in the form of cash and/or Stapled Securities or,
as the case may be, OUE H-REIT Units (where Unstapling has taken place) (as the REIT Manager
may elect) provided that in respect of any acquisition and sale or divestment of real estate assets
from/to Related Parties, such a fee should be in the form of Stapled Securities or, as the case may
be, OUE H-REIT Units at prevailing market price(s) instead of cash. The Stapled Securities or, as
the case may be, OUE H-REIT Units issued to the REIT Manager as its acquisition or divestment
fee should not be sold within one year from the date of their issuance.
Any increase in the maximum permitted level of the acquisition fee or divestment fee must be
approved by an Extraordinary Resolution passed at a meeting of holders of OUE H-REIT Units
duly convened and held in accordance with the provisions of the OUE H-REIT Trust Deed.
Development management fee payable to the REIT Manager
The REIT Manager is also entitled to receive development management fees
3
equivalent to 3.0%
of the Total Project Costs incurred in a Development Project undertaken by the REIT Manager on
behalf of OUE H-REIT. OUE H-REIT will only undertake development activities within the limits of
the Property Funds Appendix (which currently allows a REIT to commit no more than 10.0% of its
deposited property to property development activities and investments in uncompleted property
developments).
Total Project Costs means the sum of the following (where applicable):
(i) construction cost based on the project final account prepared by the project quantity
surveyor;
1 For example, if OUE H-REIT sells or divests a special purpose company which holds real estate, such underlying
value would be the value of the real estate derived from the amount of equity received by OUE H-REIT as sale price
and any debt of the special purpose company.
2 other payments refer to additional payments to OUE H-REIT or its SPVs for the sale of the real estate, for
example, where OUE H-REIT or its SPVs have already made certain payments for enhancements to the real estate,
and the value of the asset enhancements are not reflected in the sale price as the asset enhancements are not
completed, but other payments do not include stamp duty or other payments to third party agents and brokers.
3 The services that the REIT Manager may provide in relation to the development management fee would include the
provision of services (a) from the design (pre-construction) phase, such as working with the relevant consultants in
respect of the design and to finalise the details in respect of the work to be carried out, (b) to the construction phase,
such as monitoring the performance of the contractors, consultants and other service providers in respect of the
delivery of the project and (c) up to the completion phase, such as supervising and assisting in the finalisation of
accounts with the quantity surveyors and other consultants.
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(ii) principal consultants fees, including payments to the projects architect, civil and structural
engineer, mechanical and electrical engineer, quantity surveyor and project manager;
(iii) the cost of obtaining all approvals for the project;
(iv) site staff costs;
(v) interest costs on borrowings used to finance project cashflows that are capitalised to the
project in line with generally accepted accounting practices in Singapore; and
(vi) any other costs including contingency expenses which meet the definition of Total Project
Costs and can be capitalised to the project in accordance with generally accepted accounting
practices in Singapore.
When the estimated Total Project Costs are greater than S$100.0 million, the REIT Trustee and
the REIT Managers independent directors will first review and approve the quantum of the
development management fee, whereupon the REIT Manager may be directed to reduce the
development management fee. Further, in cases where the market pricing for comparable
services is, in the REIT Managers view, materially lower than the development management fee,
the REIT Manager will have the discretion to accept a development management fee which is less
than 3.0% of the Total Project Costs incurred in a Development Project undertaken by the REIT
Manager on behalf of OUE H-REIT.
For the avoidance of doubt, in respect of the same Development Project, the REIT Manager will
not be entitled to concurrently receive both the Development Management Fee as well as the
Acquisition Fee.
Any increase in the percentage of the development management fee or any change in the
structure of the development management fee must be approved by an Extraordinary Resolution
passed at a meeting of holders of OUE H-REIT Units duly convened and held in accordance with
the provisions of the OUE H-REIT Trust Deed. (See Overview The Structure of OUE H-Trust
Certain Fees and Charges for further details.)
Retirement or Removal of the REIT Manager
The REIT Manager shall have the power to retire in favour of a corporation approved by the REIT
Trustee to act as the manager of OUE H-REIT.
Also, the REIT Manager may be removed by notice given in writing by the REIT Trustee if:
the REIT Manager goes into liquidation (except a voluntary liquidation for the purpose of
reconstruction or amalgamation upon terms previously approved in writing by the REIT
Trustee) or a receiver is appointed over its assets or a judicial manager is appointed in
respect of the REIT Manager;
the REIT Manager ceases to carry on business;
the REIT Manager fails or neglects after reasonable notice from the REIT Trustee to carry out
or satisfy any material obligation imposed on the REIT Manager by the OUE H-REIT Trust
Deed;
the holders of OUE H-REIT Units, by a resolution duly passed by a majority greater than
50.0% of the total number of votes cast for and against such resolution with no participants
being disenfranchised at a meeting of holders of OUE H-REIT Units duly convened and held
in accordance with the provisions of the OUE H-REIT Trust Deed, shall so decide;
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for good and sufficient reason, the REIT Trustee is of the opinion, and so states in writing,
that a change of the REIT Manager is desirable in the interests of the holders of OUE H-REIT
Units provided that where the REIT Manager is removed on the basis that a change of the
REIT Manager is desirable in the interests of the holders of OUE H-REIT Units, the REIT
Manager has a right under the OUE H-REIT Trust Deed to refer the matter to arbitration. Any
decision made pursuant to such arbitration proceedings is binding upon the REIT Manager,
the REIT Trustee and all the holders of OUE H-REIT Units; or
the MAS directs the REIT Trustee to remove the REIT Manager.
Corporate Governance of the REIT Manager
The following outlines the main corporate governance practices of the REIT Manager.
The REIT Manager Board
The REIT Manager Board is responsible for the overall corporate governance of the REIT
Manager including establishing goals for management and monitoring the achievement of these
goals. The REIT Manager is also responsible for the strategic business direction and risk
management of OUE H-REIT. All the REIT Manager Board members participate in matters relating
to corporate governance, business operations and risks, financial performance and the
nomination and review of performance of directors.
The REIT Manager Board has established a framework for the management of the REIT Manager
and OUE H-REIT, including a system of internal controls and a business risk management
process. The REIT Manager Board consists of six members, four of whom are independent
1
directors.
The composition of the REIT Manager Board is determined using the following principles:
the Chairman of the REIT Manager Board should be a non-executive director of the REIT
Manager; and
the REIT Manager Board should comprise directors with a broad range of commercial
experience including expertise in property development, investment, management,
marketing and leasing and/or finance.
Under paragraph 2.1 of the Code of Corporate Governance 2012, at least one-third of the REIT
Manager Board is required to comprise independent directors. However, at least half of the REIT
Manager Board should comprise independent directors where:
the Chairman and the Chief Executive Officer is the same person;
the Chairman and the Chief Executive Officer are immediate family members;
the Chairman is part of the management team; or
the Chairman is not an independent director.
The composition of the REIT Manager Board will be reviewed regularly to ensure that the REIT
Manager Board has the appropriate mix of expertise and experience.
1 The independence of the directors in this context refers to their independence from management and business
relationships with the REIT Manager.
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The REIT Manager Audit and Risk Committee
The REIT Manager Audit and Risk Committee is appointed by the REIT Manager Board from
among the REIT Manager Directors and is composed of four non-executive members, a majority
of whom (including the Chairman of the REIT Manager Audit and Risk Committee) are required to
be directors independent from management and business relationships with the REIT Manager.
As at the date of this Prospectus, the members of the REIT Manager Audit and Risk Committee
are Mr Sanjiv Misra, Professor Neo Boon Siong, Mr Liu Chee Ming and Mr Ong Kian Min, all of
whom are independent directors. Mr Sanjiv Misra has been appointed as the Chairman of the
REIT Manager Audit and Risk Committee.
The role of the REIT Manager Audit and Risk Committee is to monitor and evaluate the
effectiveness of the REIT Managers internal controls. The REIT Manager Audit and Risk
Committee will review the quality and reliability of information prepared for inclusion in financial
reports, and will be responsible for the nomination of external auditors and reviewing the
adequacy of external audits in respect of cost, scope and performance.
The REIT Manager Audit and Risk Committees responsibilities include:
monitoring the procedures established to regulate Related Party Transactions, including
ensuring compliance with the provisions of the Listing Manual relating to Interested Person
Transactions (as defined in the Listing Manual) and the provisions of the Property Funds
Appendix relating to Interested Party Transactions (as defined in the Property Funds
Appendix) (both such types of transactions constituting Related Party Transactions);
reviewing transactions constituting Related Party Transactions;
deliberating on resolutions relating to conflicts of interest involving OUE H-REIT;
monitoring the procedures in place to ensure compliance with applicable legislation, the
Listing Manual and the Property Funds Appendix;
reviewing the arrangements by which employees of OUE H-REIT may, in confidence, raise
concerns about possible improprieties in matters of financial reporting or other matters and
ensuring that arrangements are in place for the independent investigation of such matters
and for appropriate follow-up action;
examining the effectiveness of financial, operating and compliance controls and risk
management policies and systems at least annually;
reviewing external audit reports to ensure that where deficiencies in internal controls have
been identified, appropriate and prompt remedial action is taken by the management;
reviewing the adequacy of external audits in respect of cost, scope and performance;
reviewing the nature and extent of non-audit services performed by external auditors;
making recommendations to the REIT Manager Board on the appointment, reappointment
and removal of external auditors and approving the remuneration and terms of engagement
of external auditors;
reviewing, on an annual basis, the independence and objectivity of the external auditors and
where the external auditors also provide a substantial volume of non-audit services to OUE
H-REIT, keeping the nature and extent of such services under review, seeking to balance the
maintenance of objectivity and value for money;
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reviewing internal audit reports at least twice a year to ascertain that the guidelines and
procedures established to monitor Related Party Transactions have been complied with;
ensuring that the internal audit function is independent from the management, will report to
the chairman of the Audit and Risk Committee and is adequately qualified to perform an
effective role;
ensuring, at least annually, the adequacy of the internal audit function;
meeting with external and internal auditors, without the presence of the executive officers of
the REIT Manager, at least on an annual basis;
reviewing the financial statements of OUE H-REIT;
reviewing the significant financial reporting issues and judgments so as to ensure the
integrity of the financial statements of OUE H-REIT and any formal announcements relating
to OUE H-REITs financial performance;
investigating any matters within the REIT Manager Audit and Risk Committees terms of
reference, whenever it deems necessary; and
reporting to the REIT Manager Board on material matters, findings and recommendations.
Dealings in Stapled Securities or, as the case may be, OUE H-REIT Units
Each REIT Manager Director and the CEO of the REIT Manager is to give notice to the REIT
Manager of his acquisition of Stapled Securities or (in the event that Unstapling has taken place)
OUE H-REIT Units or of changes in the number of Stapled Securities or, as the case may be, OUE
H-REIT Units which he holds or in which he has an interest, within two Business Days after such
acquisition or the occurrence of the event giving rise to changes in the number of the Stapled
Securities or, as the case may be, OUE H-REIT Units which he holds or in which he has an
interest. (See The Formation and Structure of OUE H-Trust, OUE H-REIT and OUE H-BT The
Formation and Structure of OUE H-REIT The REIT Manager Boards Declaration of Holdings of
OUE H-REIT Units for further details).
All dealings in the Stapled Securities or, as the case may be, OUE H-REIT Units by the REIT
Manager Directors will be announced via SGXNET, with the announcement to be posted on the
internet at the SGX-ST website http://www.sgx.com.
The directors and employees of the REIT Manager are prohibited from dealing in the Stapled
Securities or, as the case may be, OUE H-REIT Units:
in the period commencing one month before the public announcement of the annual results
and (where applicable) property valuations, and two weeks before the public announcement
of the quarterly results of OUE H-Trust or (in the event that Unstapling has taken place) OUE
H-REIT, and ending on the date of announcement of the relevant results or, as the case may
be, property valuations; and
at any time while in possession of price sensitive information.
The directors and employees of the REIT Manager are also prohibited from communicating price
sensitive information to any person.
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Pursuant to Section 137ZC of the SFA, the REIT Manager will be required to, inter alia, announce
to the SGX-ST the particulars of any acquisition or disposal of interest in OUE H-REIT Units by
the REIT Manager as soon as practicable, and in any case no later than the end of the Business
Day following the day on which the REIT Manager became aware of the acquisition or disposal.
In addition, all dealings in OUE H-REIT Units by the Chief Executive Officer will also need to be
announced by the REIT Manager via SGXNET, with the announcement to be posted on the
internet at the SGX-ST website http://www.sgx.com and in such form and manner as the Authority
may prescribe.
Management of Business Risk
The REIT Manager Board will meet quarterly or more frequently if necessary and will review the
financial performance of OUE H-REIT against a previously approved budget. The REIT Manager
Board will also review the business risks of OUE H-REIT, examine liability management and will
act upon any comments from both the internal and external auditors of OUE H-REIT.
The REIT Manager has appointed experienced and well-qualified management personnel to
handle the day-to-day operations of OUE H-REIT. In assessing business risks, the REIT Manager
Board will consider the economic environment and risks relevant to the hospitality and
hospitality-related industries. It will review management reports and feasibility studies on
individual development projects prior to approving major transactions. The management will meet
regularly to review the operations of the REIT Manager and OUE H-REIT and discuss any
disclosure issues.
Conflicts of Interest
The REIT Manager has instituted the following procedures to deal with conflicts of interest issues:
The REIT Manager will not manage any other REIT which invests in the same type of
properties as OUE H-REIT;
All executive officers will be employed by the REIT Manager and will not hold executive
positions in any other entities (except where applicable, in the Trustee-Manager);
All resolutions in writing of the REIT Manager Directors in relation to matters concerning OUE
H-REIT must be approved by a majority of the directors, including at least one director
independent from management and business relationships with the REIT Manager;
At least a majority of the REIT Manager Board shall comprise such independent directors;
In respect of matters in which a REIT Manager Director or his associates (as defined in the
Listing Manual) has an interest, direct or indirect, such interested director will abstain from
voting. In such matters, the quorum must comprise a majority of the REIT Manager Directors
and must exclude such interested director;
In respect of matters in which the Sponsor has an interest, direct or indirect, for example, in
matters relating to:
potential acquisitions of additional properties or property-related investments by OUE
H-REIT in competition with the Sponsor; and
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competition for tenants between properties owned by OUE H-REIT and properties
owned by the Sponsor
1
,
any nominees appointed by the Sponsor to the REIT Manager Board to represent its interests
will abstain from deliberations and voting on such matters. In such matters, the quorum must
comprise a majority of the REIT Manager Directors independent from management and
business relationships with the REIT Manager and must exclude nominee directors of the
Sponsor;
Save as to resolutions relating to the removal of the REIT Manager, the REIT Manager and
its associates are prohibited from voting or being counted as part of a quorum for any
meeting of the holders of OUE H-REIT Units convened to approve any matter in which the
REIT Manager and/or any of its associates has an interest; and
It is also provided in the OUE H-REIT Trust Deed that if the REIT Manager is required to
decide whether or not to take any action against any person in relation to any breach of any
agreement entered into by the REIT Trustee for and on behalf of OUE H-REIT with an
Interested Person (as defined in the Listing Manual) and/or, as the case may be, an
Interested Party (as defined in the Property Funds Appendix) (collectively, a Related Party)
of the REIT Manager, the REIT Manager shall be obliged to consult with a reputable law firm
(acceptable to the REIT Trustee) which shall provide legal advice on the matter. If the said
law firm is of the opinion that the REIT Trustee, on behalf of OUE H-REIT, has a prima facie
case against the party allegedly in breach under such agreement, the REIT Manager shall be
obliged to take appropriate action in relation to such agreement. The REIT Manager
Directors will have a duty to ensure that the REIT Manager so complies. Notwithstanding the
foregoing, the REIT Manager shall inform the REIT Trustee as soon as it becomes aware of
any breach of any agreement entered into by the REIT Trustee for and on behalf of OUE
H-REIT with a Related Party of the REIT Manager and the REIT Trustee may take such
action as it deems necessary to protect the rights of the holders of OUE H-REIT Units and/or
which is in the interests of the holders of OUE H-REIT Units. Any decision by the REIT
Manager not to take action against a Related Party of the REIT Manager shall not constitute
a waiver of the REIT Trustees right to take such action as it deems fit against such Related
Party.
1 There may be conflicts of interest where the Sponsor Group owns properties in Singapore which may be in
competition with the Initial Portfolio for customers and tenants. These properties are Crowne Plaza Changi Airport,
Marina Mandarin and 6 Shenton Way Towers One and Two, which will not be included in the Initial Portfolio.
Crowne Plaza Changi Airport was not included in the Initial Portfolio as the Sponsor has undertaken to the
landowner, Changi Airport Group (Singapore) Pte. Ltd., to carry out substantial development of an adjacent site with
a proposed additional 200 hotel rooms such that with the existing 320 hotel rooms of Crowne Plaza Changi Airport,
the integrated complex will offer a total of 520 hotel rooms. Crowne Plaza Changi Airport is a ROFR Property and
is not managed by the Sponsor Group.
Marina Mandarin was not included in the Initial Portfolio as the Sponsor only has an effective stake of 30.0% in
Marina Mandarin and does not have majority control over this property.
6 Shenton Way Towers One and Two was not included in the Initial Portfolio and is currently not a Sponsor ROFR
Property as it does not fall within OUE H-REITs investment mandate under the category of hospitality related
purposes, because 6 Shenton Way Towers One and Two is not an asset which is either complementary to or
adjoining hospitality assets which are owned by OUE H-REIT or which OUE H-REIT has committed to buy.
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Related Party Transactions
The REIT Managers Internal Control System
The REIT Manager has established an internal control system to ensure that all future Related
Party Transactions:
will be undertaken on normal commercial terms; and
will not be prejudicial to the interests of OUE H-REIT and the holders of OUE H-REIT Units.
As a general rule, the REIT Manager must demonstrate to the REIT Manager Audit and Risk
Committee that such transactions satisfy the foregoing criteria, which may entail:
obtaining (where practicable) quotations from parties unrelated to the REIT Manager; or
obtaining valuations from independent professional valuers (in accordance with the Property
Funds Appendix).
The REIT Manager will maintain a register to record all Related Party Transactions which are
entered into by OUE H-REIT and the bases, including any quotations from unrelated parties and
independent valuations obtained to support such bases, on which they are entered into.
The REIT Manager will also incorporate into its internal audit plan a review of all Related Party
Transactions entered into by OUE H-REIT. The REIT Manager Audit and Risk Committee shall
review the internal audit reports at least twice a year to ascertain that the guidelines and
procedures established to monitor Related Party Transactions have been complied with. In
addition, the REIT Trustee will also have the right to review such audit reports to ascertain that the
Property Funds Appendix has been complied with. The review will include the examination of the
nature of the transaction and its supporting documents or such other data deemed necessary to
the REIT Manager Audit and Risk Committee. If a member of the REIT Manager Audit and Risk
Committee has an interest in a transaction, he or she is to abstain from participating in the review
and approval process in relation to that transaction.
Further, the following procedures will be undertaken:
any transaction (either individually or as part of a series or if aggregated with other
transactions involving the same Related Party during the same financial year) equal to or
exceeding S$100,000 in value but less than 3.0% of the value of OUE H-REITs net tangible
assets (based on the latest audited accounts) will be subject to review by the REIT Manager
Audit and Risk Committee at regular intervals;
exceeding 3.0% but below 5.0% of the value of OUE H-REITs net tangible assets (based on
the latest audited accounts) will be subject to the review and prior approval of the REIT
Manager Audit and Risk Committee. Such approval shall only be given if such transaction is
on normal commercial terms and is consistent with similar types of transactions made by the
REIT Trustee with third parties which are unrelated to the REIT Manager; and
exceeding 5.0% of the value of OUE H-REITs net tangible assets (based on the latest
audited accounts) will be reviewed and approved prior to such transaction being entered into,
on the basis described in the preceding paragraph, by the REIT Manager Audit and Risk
197
Committee which may, as it deems fit, request advice on the transaction from independent
sources or advisers, including the obtaining of valuations from independent professional
valuers. Further, under the Listing Manual and the Property Funds Appendix, such
transaction would have to be approved by the holders of OUE H-REIT Units at a meeting duly
convened.
Pursuant to the Listing Manual, transactions with a value below S$100,000 are disregarded on the
ground that they do not put OUE H-REIT at risk. Accordingly, such transactions are excluded from
aggregation with other transactions involving the same Related Parties.
Where matters concerning OUE H-REIT relate to transactions entered into or to be entered into by
the REIT Trustee for and on behalf of OUE H-REIT with a Related Party of the REIT Manager (which
would include relevant associates as defined under the Listing Manual) or OUE H-REIT, the REIT
Trustee is required to consider the terms of such transactions to satisfy itself that such transactions
are conducted on normal commercial terms, are not prejudicial to the interests of OUE H-REIT and
the holders of OUE H-REIT Units, and in accordance with all applicable requirements of the Property
Funds Appendix and/or the Listing Manual relating to the transaction in question.
Further, the REIT Trustee has the ultimate discretion under the OUE H-REIT Trust Deed to decide
whether or not to enter into a transaction involving a Related Party of the REIT Manager or OUE
H-REIT. If the REIT Trustee is to sign any contract with a Related Party of the REIT Manager or
OUE H-REIT, the REIT Trustee will review the contract to ensure that it complies with the relevant
requirements relating to Related Party Transactions (as may be amended from time to time) as
well as such other guidelines as may from time to time be prescribed by the MAS and the SGX-ST
to apply to REITs.
Save for the transactions described under the sections Management and Corporate Governance
OUE H-REIT Related Party Transactions Related Party Transactions in connection with the
Setting Up of OUE H-REIT and Management and Corporate Governance OUE H-REIT
Related Party Transactions Future Related Party Transactions, OUE H-REIT will comply with
Rule 905 of the Listing Manual by announcing any Interested Person Transaction in accordance
with the Listing Manual if such transaction, by itself or when aggregated with other Interested
Person Transactions entered into with the same Interested Person (as defined in the Listing
Manual) during the same financial year, is 3.0% or more of the value of OUE H-REITs latest
audited net tangible assets.
The aggregate value of all Interested Person Transactions in accordance with the Listing Manual
in a particular year, each of at least S$100,000 in value and which are subject to Rules 905 and
906 of the Listing Manual, will be disclosed in OUE H-Trusts annual report, or (if Unstapling has
occurred), OUE H-REITs annual report for the relevant financial year.
Role of the REIT Manager Audit and Risk Committee for Related Party Transactions
The REIT Manager Audit and Risk Committee will monitor the procedures established to regulate
Related Party Transactions, including reviewing any Related Party Transactions entered into from
time to time and the internal audit reports to ensure compliance with the relevant provisions of the
Listing Manual and the Property Funds Appendix.
If a member of the REIT Manager Audit and Risk Committee has an interest in a transaction, he
or she is to abstain from participating in the review and approval process in relation to that
transaction.
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Related Party Transactions in Connection with the Setting Up of OUE H-REIT and the
Offering
The REIT Trustee, on behalf of OUE H-REIT, has entered into a number of transactions with the
REIT Manager and certain Related Parties of the REIT Manager in connection with the setting up
of OUE H-REIT and the Offering. These Related Party Transactions are as follows:
The REIT Trustee has on 10 July 2013 entered into the OUE H-REIT Trust Deed with the
REIT Manager.
The REIT Trustee has also on 10 July 2013 entered into the Stapling Deed with the
Managers. The terms of the OUE H-REIT Trust Deed and Stapling Deed are generally
described in The Formation and Structure of OUE H-Trust, OUE H-REIT and OUE H-BT.
The REIT Trustee has entered into the Property Sale and Purchase Agreement with the
Vendor for the sale of the Initial Portfolio. The terms of the Property Sale and Purchase
Agreement are generally described in Certain Agreements Relating to OUE H-Trust, OUE
H-REIT and OUE H-BT and the Properties Property Sale and Purchase Agreement.
The REIT Trustee and the REIT Manager will enter into the Master Lease Agreement with the
Master Lessee for the lease of the Hotel by the Listing Date. The terms of the Master Lease
Agreement are more particularly described in Certain Agreements Relating to OUE H-Trust,
OUE H-REIT and OUE H-BT and the Properties Master Lease Agreement.
The REIT Trustee has entered into the Master Property Management Agreement with the
Property Manager for the management of specific commercial areas in the properties in OUE
H-REITs portfolio, subject to the terms of the relevant individual property management
agreements. In accordance with the terms of the Master Property Management Agreement,
the REIT Trustee and the REIT Manager will enter into the Individual Property Management
Agreement for the management of Mandarin Gallery and the Excluded Commercial
Premises. The terms of the Master Property Management Agreement and the Individual
Property Management Agreement are more particularly described in Certain Agreements
relating to OUE H-Trust, OUE H-REIT, OUE H-BT and the Properties.
The Property Manager has staff members who possess relevant experience and expertise
and therefore the REIT Manager considers that the Property Manager has the necessary
expertise and resources to perform the property management, lease management and
marketing services for Mandarin Gallery and the Excluded Commercial Premises.
The REIT Manager believes that the Master Property Management Agreement and the
Individual Property Management Agreement are made on normal commercial terms and are
not prejudicial to the interests of OUE H-REIT and the Stapled Securityholders.
The REIT Trustee and the Master Lessee will enter into the Shared Services Agreement in
respect of Mandarin Orchard Singapore for the provision of certain services to Mandarin
Gallery. For the avoidance of doubt, there will be no mark-up on the cost charged by the
Master Lessee to OUE H-REIT. The terms of the Shared Services Agreement are more
particularly described in Certain Agreements Relating to OUE H-Trust, OUE H-REIT, OUE
H-BT and the Properties Shared Services Agreement.
The REIT Trustee and the Master Lessee will enter into the Shared Electricity Services
Agreement in respect of Mandarin Orchard Singapore and Mandarin Gallery for the provision
of certain services to Mandarin Gallery. The terms of the Shared Electricity Services
OUE H-REIT, OUE H-BT and the Properties Shared Electricity Services Agreement.
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The Managers and the Sponsor have on 10 July 2013 entered into the Licence Agreement
(as defined herein). The terms of the Licence Agreement are more particularly described in
Certain Agreements Relating to OUE H-Trust, OUE H-REIT, OUE H-BT and the Properties
Licence Agreement.
The Sponsor and the REIT Trustee have on 10 July 2013 entered into the Mandarin Gallery
Licence Agreement (as defined herein). The terms of the Mandarin Gallery Licence
OUE H-REIT, OUE H-BT and the Properties Mandarin Gallery Licence Agreement.
The REIT Manager considers that the Master Lessee and the Property Manager have the
necessary expertise and resources to provide the aforesaid services. Based on its experience,
expertise and knowledge of contracts, the REIT Manager believes that the Master Property
Management Agreement, the Individual Property Management Agreement, the Master Lease
Agreement, the Property Sale and Purchase Agreement, the Shared Services Agreement and the
Shared Electricity Services Agreement are on normal commercial terms and are not prejudicial to
the interests of OUE H-REIT and Stapled Securityholders.
Save as disclosed in this Prospectus, the REIT Trustee has not entered into any other transactions
with the REIT Manager or any Related Party of the REIT Manager in connection with the setting
up of OUE H-REIT.
Other Related Party Transactions
In line with the rules set out in Chapter 9 of the Listing Manual, a transaction the value of which
is less than S$100,000 is not considered material in the context of the Offering and is not set out
as a Related Party Transaction in this section.
Related Party Leases
Certain related corporations of the REIT Manager have entered into the following lease
agreements (the Related Party Leases) in relation to leases of premises at Mandarin Orchard
Singapore:
Related Party Unit NLA (sq ft)
Lease
Expiry Date
Gross Rent
(S$ per sq ft
per month)
Meritus International Pte. Ltd. Level 19 1,952.4 31 July 2013 S$5.50
Meritus International Pte. Ltd. Level 31 540.3 31 July 2013 S$5.50
OUE Hospitality REIT
Management Pte. Ltd.
Level 33 9,599.1 30 June 2016 S$6.77
Meritus International Pte. Ltd. Level 37 2,907.5 31 July 2013 S$5.50
The REIT Manager believes that the Related Party Leases were each made on normal commercial
terms, negotiated on an arms length basis and are not prejudicial to the interests of OUE H-REIT
and the holders of the OUE H-REIT Units.
Exempted Agreements
The entry into and the fees and charges payable by OUE H-REIT under the OUE H-REIT
Trust Deed, the Stapling Deed, the Property Sale and Purchase Agreement, the Master
Lease Agreement (including, for the avoidance of doubt, the option term), the Master
Property Management Agreement, the Individual Property Management Agreement, the
Shared Services Agreement, the Shared Electricity Services Agreement, the Licence
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Agreement, the Mandarin Gallery Licence Agreement and the leases set out in the section
Other Related Party Transactions, to the extent that details of these have been
specifically disclosed (collectively, the Exempted Agreements), which each constitutes
an Interested Person Transaction, are deemed to have been specifically approved by
Stapled Securityholders upon purchase of the Stapled Securities and are therefore not
subject to Rules 905 and 906 of the Listing Manual to the extent that there is no subsequent
change to the rates and/or bases (as the case may be) of the fees charged thereunder which
will adversely affect OUE H-REIT.
(See Overview Certain Fees and Charges for the fees and charges payable by OUE H-REIT
in connection with the establishment and on-going management and operation of OUE H-REIT.)
However, any renewal of such agreements or amendments thereof will be subject to Rules 905
and 906 of the Listing Manual. For the avoidance of doubt, any renewal of the Master Property
Management Agreement will be subject to Rules 905 and 906 of the Listing Manual.
(See Related Party Transactions The REIT Managers Internal Control System for further
details.)
Future Related Party Transactions
As a REIT listed on the SGX-ST, OUE H-REIT is regulated by the Property Funds Appendix and
the Listing Manual. The Property Funds Appendix regulates, among other things, transactions
entered into by the REIT Trustee (for and on behalf of OUE H-REIT) with an Interested Party
relating to OUE H-REITs acquisition of assets from or sale of assets to an Interested Party and
OUE H-REITs investment in securities of or issued by an Interested Party.
Depending on the materiality of transactions entered into by OUE H-REIT for the acquisition of
assets from, the sale of assets to or the investment in securities of or issued by an Interested
Party, the Property Funds Appendix may require that an immediate announcement to the SGX-ST
be made, and may also require that the approval of the holders of OUE H-REIT Units be obtained.
The Listing Manual regulates all Interested Person Transactions, including transactions already
governed by the Property Funds Appendix. Depending on the materiality of the transaction, OUE
H-REIT may be required to make a public announcement of the transaction (Rule 905 of the
Listing Manual), or to make a public announcement of and to obtain the prior approval of the
holders of OUE H-REIT Units for the transaction (Rule 906 of the Listing Manual). The OUE
H-REIT Trust Deed requires the REIT Trustee and the REIT Manager to comply with the provisions
of the Listing Manual relating to Interested Person Transactions as well as such other guidelines
relating to Interested Person Transactions as may be prescribed by the SGX-ST to apply to REITs.
The REIT Manager may at any time in the future seek a general annual mandate from the holders
of OUE H-REIT Units pursuant to Rule 920(1) of the Listing Manual for recurrent transactions of
a revenue or trading nature or those necessary for its day-to-day operations, including a general
mandate in relation to leases and/or license agreements (including any Master Lease Agreement
entered into by the REIT Trustee with an Interested Party) to be entered into with Interested
Persons, and all transactions conducted under such general mandate for the relevant financial
year will not be subject to the requirements of Rules 905 and 906 of the Listing Manual. In seeking
such a general annual mandate, the REIT Trustee will appoint an independent financial adviser
(without being required to consult the REIT Manager) pursuant to Rule 920(1)(b)(v) of the Listing
Manual to render an opinion as to whether the methods or procedures for determining the
transaction prices of the transactions contemplated under the annual general mandate are
sufficient to ensure that such transactions will be carried out on normal commercial terms and will
not be prejudicial to the interests of OUE H-REIT and the holders of OUE H-REIT Units.
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Both the Property Funds Appendix and the Listing Manual requirements would have to be
complied with in respect of a proposed transaction which is prima facie governed by both sets of
rules. Where matters concerning OUE H-REIT relate to transactions entered or to be entered into
by the REIT Trustee for and on behalf of OUE H-REIT with a Related Party of OUE H-REIT or the
REIT Manager, the REIT Trustee is required to ensure that such transactions are conducted in
accordance with applicable requirements of the Property Funds Appendix and/or the Listing
Manual relating to the transaction in question.
The REIT Manager is not prohibited by either the Property Funds Appendix or the Listing Manual
from contracting or entering into any financial, banking or any other type of transaction with the
REIT Trustee (when acting other than in its capacity as trustee of OUE H-REIT) or from being
interested in any such contract or transaction, provided that any such transaction shall be on
normal commercial terms and is not prejudicial to the interests of OUE H-REIT and the holders of
OUE H-REIT Units. The REIT Manager shall not be liable to account to the REIT Trustee or to the
holders of OUE H-REIT Units for any profits or benefits or other commissions made or derived
from or in connection with any such transaction. The REIT Trustee shall not be liable to account
to the REIT Manager or to the holders of OUE H-REIT Units for any profits or benefits or other
commission made or derived from or in connection with any such transaction.
Generally, under the Listing Manual, the REIT Manager, its connected persons (as defined in the
Listing Manual) and any director of the REIT Manager are prohibited from voting their respective
own OUE H-REIT Units at, or being part of a quorum for, any meeting to approve any matter in
which it has a material interest.
OUE H-BT
OUE H-BT will be dormant on the Listing Date. For as long as OUE H-BT is dormant, the primary
role of the Trustee-Manager Board will be to ensure that the Trustee-Manager complies with the
requirements under the Listing Manual, the BTA and the Business Trust Regulations (BTR)
(except where waivers have been obtained) as well as the OUE H-BT Trust Deed and the Stapling
Deed.
The Trustee-Manager Board
As at the Listing Date, the Trustee-Manager Directors will be the same as the REIT Manager
Directors. (See Management and Corporate Governance OUE H-Trust Board of Directors of
the Managers for further details.) As OUE H-BT will be dormant as at the Listing Date, no
compensation is payable to the Directors of the Trustee-Manager.
Executive Officers of the Trustee-Manager
As at the Listing Date, the executive officers of the Trustee-Manager comprise the Chief Executive
Officer and Chief Financial Officer, who are also the Chief Executive Officer and Chief Financial
Officer/Head Investor Relations Manager of the REIT Manager respectively.
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The following table sets forth information regarding the executive officers of the Trustee-Manager:
Mr Chong Kee Hiong 47 c/o 333 Orchard Road #33-00,
Singapore 238867
Mr Rudi Chuan Hwee Hiow 56 c/o 333 Orchard Road #33-00,
Singapore 238867
Chief Financial Officer
(See OUE H-REIT The REIT Manager Executive Officers and Appendix H List of Present
and Past Principal Directorships of the Directors and Executive Officers of the Managers for
further details.)
Employees of the Trustee-Manager
There are two employees employed by the Trustee-Manager, being the Chief Executive Officer, Mr
Chong Kee Hiong, with the Chief Financial Officer, Mr Rudi Chuan Hwee Hiow, being responsible
for the finances of OUE H-BT. As at the date of this Prospectus, the two employees are based in
Singapore and are not unionised.
Service Agreements
None of the members of the Trustee-Manager Board has entered or proposes to enter into service
agreements with the Trustee-Manager.
Company Secretary of the Trustee-Manager
The Company Secretary of the Trustee-Manager is Mr Ng Ngai, who is also the Company
Secretary of the REIT Manager. Mr Ng is a member of the Singapore Association of the Institute
of Chartered Secretaries and Administrators.
The roles of the Company Secretary include the following:
ensuring that board procedures of the Trustee-Manager Board are followed;
assisting the Trustee-Manager with corporate secretarial administration matters for the
Trustee-Manager, both in its personal capacity and in its capacity as manager of OUE H-BT,
including attending all board meetings; and
assisting the Trustee-Manager in preparing the announcements and notifications to be
uploaded on the SGXNET as required under the Listing Manual.
Key Roles of the Trustee-Manager Board when OUE H-BT becomes active
When OUE H-BT becomes active, the key roles of the Trustee-Manager Board will be to:
guide the corporate strategy and directions of the Trustee-Manager;
ensure that senior management discharges business leadership and demonstrates the
highest quality of management skills with integrity and enterprise;
oversee the proper conduct of the Trustee-Manager; and
ensure that measures relating to corporate governance, financial regulations and other
required policies are in place and enforced.
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When OUE H-BT becomes active, the Trustee-Manager Board will meet to review the key
activities and business strategies of the Trustee-Manager. The Trustee-Manager Board intends to
meet regularly, at least once every three months, to deliberate the strategic policies of OUE H-BT,
including acquisitions and disposals, approval of the annual budget and review of the performance
of OUE H-BT.
Each Director of the Trustee-Manager has been appointed on the basis of his professional
experience and his potential to contribute to the proper guidance of OUE H-BT. The Directors of
the Trustee-Manager will contribute in different ways to further the interests of OUE H-BT.
The MAS has granted an exemption from compliance with Section 15(1) of the BTA to the extent
that Section 15(1) requires an audit committee to be constituted when OUE H-BT is dormant,
subject to certain conditions. (See General Information Waivers from the MASParagraph (16)
for further details on the exemption granted and the conditions imposed by the MAS). When OUE
H-BT becomes active, the Trustee-Manager Board will put in place appropriate internal control
systems.
A majority of the Trustee-Manager Board (namely four out of six Directors) are non-executive and
independent
1
, subject to the exemption granted by the MAS from Regulation 12(1)(a) of the BTR
for the Trustee-Manager Directors to be independent from management and business
relationships with the Trustee-Manager as well as from Regulation 12(1)(b) of the BTR for the
Trustee-Manager Directors to be independent from management and business relationships with
the Trustee-Manager and from every Substantial shareholder of the Trustee-Manager while OUE
H-REIT is stapled to OUE H-BT (See General Information Waivers from the MAS Paragraph
(17) for further details on the exemption granted and the conditions imposed by the MAS).
The positions of Chairman of the Trustee-Manager Board and Chief Executive Officer of the
Trustee-Manager are held by two different individuals in order to maintain effective checks and
balances. The Chairman of the Trustee-Manager Board is Mr Christopher James Williams, while
the Chief Executive Officer of the Trustee-Manager is Mr Chong Kee Hiong. Mr Williams is also
the Chairman of the REIT Manager Board. The Chairman is responsible for the overall
management of the Trustee-Manager Board, while the Chief Executive Officer has full executive
responsibilities over the business directions of the Trustee-Manager.
The Trustee-Manager Board has access to the Company Secretary at all times. The Company
Secretary attends to corporate secretarial administration matters and attends all Board meetings.
The Trustee-Manager also has access to independent professional advice where appropriate and
whenever requested. (See Management and Corporate Governance OUE H-REIT Company
Secretary of the Trustee-Manager for details of the Company Secretary and his qualifications.)
Roles and Responsibilities of the Trustee-Manager in relation to the management of OUE
H-BT
The Trustee-Manager has the dual responsibilities of safeguarding the interests of the holders of
OUE H-BT Units, and managing the business conducted by OUE H-BT. The Trustee-Manager has
general powers of management over the business and assets of OUE H-BT and its main
responsibility is to manage OUE H-BTs assets and liabilities for the benefit of the holders of OUE
H-BT Units as a whole.
1 For the purposes of the BTA and the BTR, an independent director means a director who is independent from (a)
management and business relationships with the Trustee-Manager; (b) management and business relationships
with the Trustee-Manager and from every Substantial shareholder of the Trustee-Manager; and (c) any single
Substantial shareholder of the Trustee-Manager.
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The Trustee-Manager will set the strategic direction of OUE H-BT. The Trustee-Manager is also
responsible for ensuring that OUE H-BT complies with the applicable provisions of all relevant
laws, regulations and guidelines including the BTA, the SFA, the Listing Manual, the OUE H-BT
Trust Deed and the Stapling Deed.
The Trustee-Manager is also obliged to exercise the degree of care and diligence required of a
Trustee-Manager of a registered business trust under the BTA (Due Care) to comply with the
applicable provisions of all relevant legislation, as well as the Listing Manual, and is responsible
for ensuring compliance with the Trust Deed and all relevant contracts entered into by the
Trustee-Manager on behalf of OUE H-BT.
The Trustee-Manager, in exercising its powers and carrying out its duties as OUE H-BTs
Trustee-Manager, is required to:
treat the holders of OUE H-BT Units who hold OUE H-BT Units in the same class fairly and
equally and holders of OUE H-BT Units who hold OUE H-BT Units in different classes (if any)
fairly;
ensure that all payments out of the OUE H-BT Trust Property are made in accordance with
the BTA, the OUE H-BT Trust Deed and the Stapling Deed;
report to the Authority any contravention of the BTA or the Securities and Futures (Offers of
Investments) (Business Trusts) (No. 2) Regulations 2005 (SFR(BT)) by any other person that:
relates to OUE H-BT; and
has had, has or is likely to have, a material adverse effect on the interests of all the
holders of OUE H-BT Units, or any class of holders of OUE H-BT Units,
as a whole, as soon as practicable after the Trustee-Manager becomes aware of the
contravention;
ensure that the OUE H-BT Trust Property is properly accounted for; and
ensure that the OUE H-BT Trust Property is kept distinct from the property held in its own
capacity.
The Trustee-Manager may:
while the OUE H-REIT Units and OUE H-BT Units are stapled together, lend monies to OUE
H-REIT out of OUE H-BTs property whenever the Trustee-Manager considers, among other
things, that such lending is necessary or desirable in order to further the interests of the
investors of the Stapled Securities as a whole; and
borrow on behalf of OUE H-BT (upon such terms and conditions as it deems fit, including the
charging or mortgaging of all or any part of OUE H-BTs property) whenever the Trustee-
Manager considers, among other things, that such borrowings are necessary or desirable in
order to enable the Trustee-Manager to meet any contractual obligations or liabilities or
whenever the Trustee-Manager considers it desirable that monies be borrowed or raised to:
finance the acquisition of any Authorised Investments;
finance the repurchase and/or redemption of OUE H-BT Units by the Trustee-Manager;
finance any distributions of OUE H-BT;
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finance for any other purpose deemed desirable by the Trustee-Manager in connection
with any Authorised Investment undertaken by OUE H-BT or any Trust Asset (as defined
under the OUE H-BT Trust Deed); or
while the OUE H-REIT Units and OUE H-BT Units are stapled together, on-lend monies
to OUE H-REIT in order to further the interests of the investors of the Stapled Securities
as a whole.
OUE H-BT will not guarantee the financial obligations, debts or any other liabilities of OUE H-REIT
and vice versa.
The Trustee-Manager also has the following statutory duties under the BTA:
at all times act honestly and exercise reasonable diligence in the discharge of its duties as
OUE H-BTs Trustee-Manager in accordance with the BTA and the OUE H-BT Trust Deed;
act in the best interests of all holders of OUE H-BT Units as a whole and give priority to the
interests of all holders of OUE H-BT Units as a whole over its own interests in the event of
a conflict between the interests of all holders of OUE H-BT Units as a whole and its own
interests;
not make improper use of any information acquired by virtue of its position as OUE H-BTs
Trustee-Manager to gain, directly or indirectly, an advantage for itself or for any other person
to the detriment of the holders of OUE H-BT Units; and
hold the OUE H-BT Trust Property on trust for all holders of OUE H-BT Units as a whole in
accordance with the terms of the OUE H-BT Trust Deed.
Should the Trustee-Manager contravene any of the provisions setting out the aforesaid duties, it
shall be:
liable to all holders of OUE H-BT Units as a whole for any profit or financial gain directly or
indirectly made by it or any of its related corporations or for any damage suffered by all
holders of OUE H-BT Units as a whole as a result of the contravention; and
guilty of an offence and shall be liable on conviction to a fine not exceeding S$100,000.
While the Trustee-Manager is required to be dedicated to the conduct of the business of OUE
H-BT, it is not prohibited from delegating its duties and obligations to third parties. Save for an
instance of fraud, gross negligence, wilful default or breach of trust or breach of the OUE H-BT
Trust Deed or the Stapling Deed by the Trustee-Manager or where the Trustee-Manager fails to
exercise Due Care, it shall not incur any liability by reason of any error of law or any matter or thing
done or suffered to be done or omitted to be done by it in good faith under the OUE H-BT Trust
Deed. In addition, the Trustee-Manager shall be entitled, for the purpose of indemnity against any
actions, costs, claims, damages, expenses or demands to which it may be subject to as
Trustee-Manager, to have recourse to the Trust Property of OUE H-BT or any part thereof save
where such action, cost, claim, damage, expense or demand is occasioned by the fraud, wilful
default or breach of trust by the Trustee-Manager or by the failure of the Trustee-Manager to
exercise Due Care. The Trustee-Manager may, in managing OUE H-BT and in carrying out and
performing its duties and obligations under the OUE H-BT Trust Deed, appoint such persons to
exercise any or all of its powers and discretions and to perform all or any of its obligations under
the Trust Deed, and shall not be liable for all acts and omissions of such persons provided that
the Trustee-Manager had exercised Due Care in selecting as well as monitoring such persons.
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Constituent Documents of the Trustee-Manager
Certain key provisions of the Memorandum and Articles of Association of the Trustee-Manager are
set out below.
A Trustee-Manager Director shall not vote on any proposal, arrangement or contract in
which he is interested
A Trustee-Manager Director shall not vote in respect of any proposal, arrangement or contract in
which he has any personal material interest, directly or indirectly and a Trustee-Manager Director
shall not be counted in the quorum at a meeting in relation to any resolution on which he is
disbarred from voting.
The borrowing powers exercisable by the Trustee-Manager and how such borrowing
powers may be varied
The Trustee-Manager has full rights, powers and privileges to carry on or undertake any business
or activity, do any act or enter into any transaction subject to the provisions of the Companies Act,
the BTA and any other written law and the Memorandum of Association of the Trustee-Manager.
In this case, the business is that of acting as Trustee-Manager of OUE H-BT.
Section 28(4) of the BTA prohibits the Trustee-Manager from borrowing on behalf of OUE H-BT
unless the power of borrowing is conferred upon it by the OUE H-BT Trust Deed. The OUE H-BT
Trust Deed empowers the Trustee-Manager to borrow on behalf of OUE H-BT for the purpose of
enabling the Trustee-Manager to meet any liabilities under or in connection with the trusts of the
OUE H-BT Trust Deed or with any investment of OUE H-BT, for the purpose of financing any
acquisition of any Authorised Investment on behalf of OUE H-BT, or financing the repurchase
and/or redemption of OUE H-BT Units by the Trustee-Manager, or financing any distributions of
OUE H-BT, or for any other purpose deemed desirable by the Trustee-Manager in connection with
any Authorised Investment undertaken by OUE H-BT or any Trust Asset (as defined under the
OUE H-BT Trust Deed), or while the OUE H-REIT Units and OUE H-BT Units are stapled together,
on-lend monies to OUE H-REIT in order to further the interests of the investors of the Stapled
Securities as a whole upon such terms and conditions as it thinks fit and, in particular, by charging
or mortgaging all or any of the investments of OUE H-BT or by issuing debentures and other
securities, whether outright or as collateral security for any debt, liability or obligation of the
Trustee-Manager, as Trustee-Manager of OUE H-BT, provided that the Trustee-Manager shall not
be required to execute any instrument, lien, charge, pledge, hypothecation, mortgage or
agreement in respect of the borrowing or raising of monies which (in its opinion) cause the
Trustee-Managers liability to extend beyond the limits of the OUE H-BT Trust Property
1
.
Any variation of the borrowing powers as contained in the OUE H-BT Trust Deed would require the
approval of the holders of OUE H-BT Units by way of an Extraordinary Resolution passed at a
meeting of holders of OUE H-BT Units duly convened and held in accordance with the OUE H-BT
Trust Deed and such other regulatory approvals as may be required to vary the terms of the OUE
H-BT Trust Deed.
The retirement or non-retirement of a Trustee-Manager Director under an age limit
requirement
The Memorandum and Articles of Association of the Trustee-Manager do not specify an age limit
beyond which a Trustee-Manager Director shall retire.
1 The on-lending of monies from OUE H-BT to OUE H-REIT will count towards the borrowings of OUE H-REIT for the
purposes of calculating OUE H-REITs Aggregate Leverage.
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The number of units in the business trust, if any, required for the qualification of a
Trustee-Manager Director
A Trustee-Manager Director is not required to hold any OUE H-BT Units to qualify as a
Trustee-Manager Director.
Retirement of Trustee-Manager Directors
The appointment of the directors on the Trustee-Manager Board shall continue until such time as
they resign or become prohibited from being a director by reason of any order made under the
Companies Act or the BTA, or cease to be a director by virtue of any of the provisions of the
Companies Act or the BTA or the Articles of Association of the Trustee-Manager, or has a receiving
order made against him or suspends payments or compounds with his creditors generally, or is
found lunatic or becomes of unsound mind or is otherwise removed by way of an Ordinary
Resolution passed at a meeting of the shareholder(s) of the Trustee-Manager duly convened and
held.
Fees Payable to the Trustee-Manager
Management fee
The Trustee-Manager shall be entitled under the OUE H-BT Trust Deed to a management fee
comprising 10.0% of the profit of OUE H-BT before interest and tax in the relevant financial year
(calculated before accounting for this management fee in that financial year) payable in the event
that OUE H-BT becomes active. For the purpose of calculating the management fee, if OUE H-BT
holds only a partial interest in an investment from which such profit is derived, such profit shall be
pro-rated in proportion to the partial interest held.
The management fee is payable to the Trustee-Manager or to any person which the Trustee-
Manager may designate or nominate, in the form of cash and/or Stapled Securities or, as the case
may be, OUE H-BT Units (where Unstapling has taken place) as the Trustee-Manager may elect.
Any portion of management fees payable in the form of Stapled Securities or, as the case may be,
OUE H-BT Units shall be payable quarterly in arrears and any portion of management fees
payable in cash shall be payable monthly in arrears. On the basis that the Stapled Securities or,
as the case may be, OUE H-BT Units are listed, when management fees are payable in the form
of Stapled Securities or, as the case may be, OUE H-BT Units, the Trustee-Manager shall be
entitled to receive such number of Stapled Securities or, as the case may be, OUE H-BT Units as
may be purchased with the relevant amount of the management fees at an issue price equivalent
to the market price, i.e. (i) (subject to (ii) below) the volume weighted average price per Stapled
Security or, as the case may be, OUE H-BT Units for all trades on the SGX-ST, in the ordinary
course of trading, for the last 10 Business Days
1
of the relevant period in which the management
fees accrue or, if the Trustee-Manager believes that the foregoing calculation does not provide a
fair reflection of the market price of a Stapled Security or, as the case may be, a OUE H-BT Unit
(which may include, among others, instances where the trades on the OUE H-BT Units or Stapled
Securities are very low or where there is disorderly trading activity in the OUE H-BT Units or
Stapled Securities), an amount as determined by the Trustee-Manager (after consultation with a
stockbroker approved by the Trustee-Manager), as being the fair market price and this will be
announced on the SGXNET for so long as the OUE H-BT is listed on the SGX-ST.
Any increase in the rate or any change in the structure of the Trustee-Managers management
fees must be approved by an Extraordinary Resolution at a meeting of the holders of OUE H-BT
Units duly convened and held in accordance with the provisions of the OUE H-BT Trust Deed.
1 Business Day refers to any day (other than a Saturday, Sunday or gazetted public holiday) on which commercial
banks are open for business in Singapore and the SGX-ST is open for trading.
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For the avoidance of doubt, the Trustee-Managers change in its election to receive cash or OUE
H-BT Units or a combination of cash and OUE H-BT Units is not considered as a change in
structure of the Trustee-Managers management fees.
Trustee fee
Under the OUE H-BT Trust Deed, if the value of the OUE H-BT Deposited Property is at least
S$50.0 million, a maximum of 0.1% per annum of the value of OUE H-BT Deposited Property (if
any), excluding out-of-pocket expenses and GST, is payable to the Trustee-Manager as the
trustee fee. For the purpose of calculating the trustee fee, if OUE H-BT holds only a partial interest
in any of its Deposited Property, such Deposited Property shall be pro-rated in proportion to the
partial interest held.
The trustee fee shall be payable in arrears on a monthly basis in the form of cash.
No fees are payable during the period that OUE H-BT is dormant and any out-of-pocket expenses
incurred when OUE H-BT is dormant (such as auditing and legal expenses) may be funded by
OUE H-BTs working capital funded from the Offering or by loans granted by OUE H-REIT.
Acquisition fee and divestment fee payable to the Trustee-Manager
The Trustee-Manager is entitled to:
an acquisition fee
1
of 0.75% for acquisitions from Related Parties and 1.0% for all other cases
(or such lower percentage as may be determined by the Trustee-Manager in its absolute
discretion) of any of the following as is applicable (subject to there being no double counting):
(i) in the case of an acquisition of real estate, the acquisition price of any real estate
purchased by OUE H-BT, whether directly or indirectly through one or more SPVs, plus
any other payments
2
in addition to the acquisition price made by OUE H-BT or its SPVs
to the vendor in connection with the purchase of the real estate (pro-rated if applicable
to the proportion of OUE H-BTs 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
3
of any real estate which is taken into
account when computing the acquisition price payable for the equity interests of any
vehicle holding directly or indirectly the real estate, purchased by OUE H-BT, whether
directly or indirectly through one or more SPVs, plus any other payments
2
made by OUE
H-BT or its SPVs to the vendor in connection with the purchase of such equity interests
(pro-rated if applicable to the proportion of OUE H-BTs interest); or
(iii) the acquisition price of any investment purchased by OUE H-BT, whether directly or
1 No acquisition fee is payable for transfers of assets from OUE H-REIT.
2 other payments refer to additional payments to the vendor of the real estate, for example, where the vendor has
already made certain payments for enhancements to the real estate, and the value of the asset enhancements is
not reflected in the acquisition price as the asset enhancements are not completed, but other payments do not
include stamp duty or other payments to third party agents and brokers.
3 For example, if OUE H-BT acquires a special purpose company which holds real estate, such underlying value
would be the value of the real estate derived from the amount of equity paid by OUE H-BT as purchase consideration
and any debt of the special purpose company.
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a divestment fee
1
of 0.5%
2
of any of the following as is applicable (subject to there being no
double-counting):
(i) the sale price of any real estate sold or divested, whether directly or indirectly through
one or more SPVs, by OUE H-BT, plus any other payments
4
in connection with the sale
or divestment of the real estate (pro-rated if applicable to the proportion of OUE H-BTs
interest);
3
sale price for the equity interests in any vehicle holding directly or indirectly the real
estate, sold or divested by OUE H-BT, whether directly or indirectly through one or more
SPVs, plus any other payments
4
received by the OUE H-BT or its SPVs from the
purchaser in connection with the sale or divestment of such equity interests (pro-rated
if applicable to the proportion of OUE H-BTs interest); or
(iii) the sale price of the investment sold or divested by OUE H-BT, whether directly or
The acquisition fee and divestment fee are payable to the Trustee-Manager or to any person which
the Trustee-Manager may designate or nominate, in the form of cash and/or Stapled Securities or,
as the case may be, OUE H-BT Units as the Trustee-Manager may elect, and in such proportion
as may be determined by the Trustee-Manager.
The acquisition fee or, as the case may be, the divestment fee is payable as soon as practicable
after the completion of the acquisition of the Authorised Investment or, as the case may be, the
completion of the sale or disposal. For so long as the Stapled Securities or, as the case may be,
OUE H-BT Units are listed, when the acquisition fee or, as the case may be, the divestment fee
is payable in the form of Stapled Securities or, as the case may be, OUE H-BT Units, the
Trustee-Manager shall be entitled to receive such number of Stapled Securities or, as the case
may be, OUE H-BT Units as may be purchased with the relevant amount of the acquisition fee or,
as the case may be, the divestment fee at an issue price equivalent to the market price, i.e. the
volume weighted average price per Stapled Security or, as the case may be, OUE H-BT Units for
all trades on the SGX-ST, in the ordinary course of trading, for the last 10 Business Days of the
relevant period in which the acquisition fees accrue.
Any increase in the rate or any change in the structure of the Trustee-Managers management fee
and trustee fee, or in the maximum permitted level of the acquisition fee or divestment fee, must
be approved by an Extraordinary Resolution passed at a meeting of holders of OUE H-BT Units
duly convened and held in accordance with the provisions of the OUE H-BT Trust Deed.
1 No divestment fee is payable for the transfer of assets to OUE H-REIT.
2 There will not be two-tiers of divestment fees payable. The divestment fee payable by OUE H-BT will be 0.5%
regardless of whether the divestment of assets by OUE H-BT is to a Related Party of otherwise.
3 For example, if OUE H-BT sells or divests a special purpose company which holds real estate, such underlying value
would be the value of the real estate derived from the amount of equity received by OUE H-BT as sale price and
4 other payments refer to additional payments to OUE H-BT or its SPVs for the sale of the real estate, for example,
where OUE H-BT or its SPVs have already made certain payments for enhancements to the real estate, and the
value of the asset enhancements are not reflected in the sale price as the asset enhancements are not completed,
but other payments do not include stamp duty or other payments to third party agents and brokers.
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Development management fee payable to the Trustee-Manager
The Trustee-Manager is also entitled to receive development management fees
1
equivalent to
3.0% of the Total Project Costs incurred in a Development Project undertaken by the Trustee-
Manager on behalf of OUE H-BT.
When the estimated Total Project Costs are greater than S$100.0 million, the Trustee-Managers
independent directors will first review and approve the quantum of the development management
fee, whereupon the Trustee-Manager may be directed to reduce the development management
fee. Further, in cases where the market pricing for comparable services is, in the Trustee-
Managers view, materially lower than the development management fee, the Trustee-Manager
will have the discretion to accept a development management fee which is less than 3.0% of the
Total Project Costs incurred in a Development Project undertaken by the Trustee-Manager on
behalf of OUE H-BT.
For the avoidance of doubt, in respect of the same Development Project, the Trustee-Manager will
not be entitled to concurrently receive both the Development Management Fee as well as the
Acquisition Fee.
Any increase in the percentage of the development management fee or any change in the
structure of the development management fee must be approved by an Extraordinary Resolution
passed at a meeting of holders of OUE H-BT Units duly convened and held in accordance with the
provisions of the OUE H-BT Trust Deed. (See Overview The Structure of OUE H-Trust Certain
Fees and Charges for further details.)
Retirement or Removal of the Trustee-Manager
Under the BTA, the Trustee-Manager may only be removed, as Trustee-Manager of OUE H-BT, if a
resolution to remove the Trustee-Manager is approved by holders of OUE H-BT Units holding in the
aggregate not less than three-fourths of the voting rights of all the holders of the OUE H-BT Units
who, being entitled to do so, vote in person or where proxies are allowed, by proxy present at a
meeting of the holders of OUE H-BT Units or the Trustee-Manager may resign as Trustee-Manager.
Any removal or resignation of the Trustee-Manager must be made in accordance with such
procedures as the MAS may prescribe. Any purported change of the Trustee-Manager of a
registered business trust is ineffective unless it is made in accordance with the BTA.
The Trustee-Manager will remain the Trustee-Manager of OUE H-BT until another person is
appointed by:
the holders of OUE H-BT Units to be the Trustee-Manager of OUE H-BT; or
the court under Section 21(1) of the BTA to be the temporary Trustee-Manager of OUE H-BT,
and such appointment shall be effective from the date stated in the resolution of the holders of
OUE H-BT Units or court order as the effective date of the appointment of the Trustee-Manager
or temporary Trustee-Manager, as the case may be.
1 The services that the Trustee-Manager may provide in relation to the development management fee would include
the provision of services (a) from the design (pre-construction) phase, such as working with the relevant consultants
in respect of the design and to finalise the details in respect of the work to be carried out, (b) to the construction
phase, such as monitoring the performance of the contractors, consultants and other service providers in respect
of the delivery of the project and (c) up to the completion phase, such as supervising and assisting in the finalisation
of accounts with the quantity surveyors and other consultants.
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Pursuant to Section 21(1) of the BTA, upon application by the MAS or the Trustee-Manager or a
holder of OUE H-BT Units, the court may, by order, appoint a company that has consented in
writing to serve as a temporary Trustee-Manager to be the temporary Trustee-Manager of OUE
H-BT for a period of three months if the court is satisfied that the appointment is in the interest of
the holders of OUE H-BT Units.
The temporary Trustee-Manager of OUE H-BT is required, within such time and in accordance
with such requirements as may be prescribed by the MAS, to take such steps to enable the
holders of OUE H-BT Units to appoint another person as the Trustee-Manager (not being a
temporary Trustee-Manager) of OUE H-BT.
Corporate Governance of the Trustee-Manager
The BTA stipulates requirements and obligations in respect of corporate governance that are more
stringent than those for companies and collective investment schemes. Corporate governance of
companies and collective investment schemes are governed by the Code of Corporate Governance
2012 and, in the case of collective investment schemes, the CIS Code. The Code of Corporate
Governance 2012 and the CIS Code only set out broad principles for guidance while the regime
under the BTA sets out the requirements for, among other things, board composition of a
Trustee-Manager and independence of directors of a Trustee-Manager. The following is a summary
of the material provisions of the BTA insofar as they relate to the Trustee-Manager Board.
Composition of the Trustee-Manager Board
Under Regulation 12(1) of the BTR, the Trustee-Manager Board is required to comprise:
at least a majority of Trustee-Manager Directors who are independent from management and
business relationships with the Trustee-Manager;
at least one-third of Trustee-Manager Directors who are independent from management and
business relationships with the Trustee-Manager and from every Substantial shareholder of
the Trustee-Manager; and
at least a majority of Trustee-Manager Directors who are independent from any single
Substantial shareholder of the Trustee-Manager.
The Trustee-Manager Board consists of six members, four of whom are independent directors for
the purposes of the BTA, subject to the exemption granted by the MAS from Regulation 12(1)(a)
of the BTR for the Trustee-Manager Directors to be independent from management and business
relationships with the Trustee-Manager as well as from Regulation 12(1)(b) of the BTR for the
Trustee-Manager Directors to be independent from management and business relationships with
the Trustee-Manager and from every Substantial shareholder of the Trustee-Manager while OUE
H-REIT is stapled to OUE H-BT (See General Information Waivers from the MAS Paragraph
(17) for further details on the exemption granted and the conditions imposed by the MAS).
In addition to compliance with requirements under the BTA, the composition of the Trustee-
Manager Board is determined using the following principles:
the Chairman of the Trustee-Manager Board should be a non-executive Director; and
the Trustee-Manager Board should consist of Directors with a broad range of commercial
experience.
The composition of the Trustee-Manager Board will be reviewed regularly to ensure that the
Trustee-Manager Board has the appropriate mix of expertise and experience.
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Independence of the Trustee-Manager Directors
A majority of the Trustee-Manager Directors must be independent from management and business
relationships with the Trustee-Manager.
(i) Independence from management and business relationships
To be considered to be independent from management and business relationships with the
Trustee-Manager (whether or not the Trustee-Manager is acting for or on behalf of OUE H-BT
or OUE H-Trust), a Trustee-Manager Director must not have any:
management relationships with the Trustee-Manager or with any of its subsidiaries; and
business relationships with the Trustee-Manager or with any of its related corporations,
or with any officer of the Trustee-Manager or any of its related corporations,
that could interfere with the exercise of his independent judgment with regard to the interests
of all the holders of OUE H-BT Units as a whole.
(ii) Independence from management relationships
A Trustee-Manager Director is not considered to be independent from management
relationships with the Trustee-Manager if:
he is employed by the Trustee-Manager or by any of its subsidiaries, or has been so
employed, at any time during the current financial year or any of the preceding three
financial years of the Trustee-Manager;
any member of his immediate family:
is being employed by the Trustee-Manager or by any of its subsidiaries as an
executive officer whose compensation is determined by the Trustee-Manager
Board or the subsidiary, as the case may be; or
has been so employed at any time during the current financial year or any of the
preceding three financial years of the Trustee-Manager; or
he is accustomed or under an obligation, whether formal or informal, to act in
accordance with the directions, instructions or wishes of the management of the
Trustee-Manager or any of its subsidiaries.
(iii) Independence from business relationships
A Trustee-Manager Director is not considered to be independent from business relationships
with the Trustee-Manager or with any of its related corporations, or with any officer of the
Trustee-Manager or any of its related corporations, if:
he is a Substantial shareholder, a director or an executive officer of any corporation, or
a sole proprietor or partner of any firm, where such corporation, sole proprietorship or
firm carries on business for purposes of profit to which the Trustee-Manager or any of
its related corporations has made, or from which the Trustee-Manager or any of its
related corporations has received, payments (whether or not the Trustee-Manager is
acting for or on behalf of OUE H-BT or OUE H-Trust) at any time during the current or
immediately preceding financial year of the Trustee-Manager; or
213
he is receiving or has received compensation from the Trustee-Manager or any of its
related corporations, other than remuneration received for his service as a Trustee-
Manager Director or as an employee of the Trustee-Manager or any of its related
corporations, at any time during the current or immediately preceding financial year of
the Trustee-Manager.
(iv) Independence from Substantial shareholders of the Trustee-Manager
A Trustee-Manager Director is considered to be independent from a Substantial shareholder
of the Trustee-Manager if he is not that Substantial shareholder or is not connected to that
Substantial shareholder.
The Trustee-Manager Director is connected to the Substantial shareholder if:
in the case where the Substantial shareholder is an individual, the Trustee-Manager
Director is:
a member of the immediate family of the Substantial shareholder;
a partner of a firm of which the Substantial shareholder is also a partner; or
accustomed or under an obligation, whether formal or informal, to act in
accordance with the directions, instructions or wishes of the Substantial
shareholder; or
in the case where the Substantial shareholder is a corporation, the Trustee-Manager
Director is:
employed by the Substantial shareholder;
employed by a subsidiary or an associated company (as defined in the BTA) of the
Substantial shareholder;
a director of the Substantial shareholder;
an executive director of a subsidiary or an associated company of the Substantial
shareholder;
a non-executive director of a subsidiary or an associated company of the
Substantial shareholder, where the subsidiary or associated company is not the
Trustee-Manager;
a partner of a firm of which the Substantial shareholder is also a partner; or
accustomed or under an obligation, whether formal or informal, to act in
accordance with the directions, instructions or wishes of the Substantial
shareholder.
None of the Trustee-Manager Directors would, by definition under the BTR, be independent from
a Substantial shareholder as the Managers are both wholly-owned by the Sponsor.
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However, due to the structure of OUE H-Trust, appointing a Trustee-Manager Board which is the
same as the REIT Manager Board would avoid any differences or deadlock in the operation of
OUE H-Trust. Operationally, the structure of OUE H-Trust would require a high degree of
co-operation between the Managers. In order for OUE H-REIT and OUE H-BT to function
effectively, it is important that the Managers co-operate with each other in, for example:
sharing accounting and other information as may be necessary or desirable to fulfil their
respective obligations under the Stapling Deed;
preparing and providing financial information to investors;
holding general meetings;
issuing Stapled Securities; and
making distributions.
The MAS has granted an exemption from the requirements under Regulations 12(1)(a) and
12(1)(b) of the BTR to the extent that Regulations 12(1)(a) and 12(1)(b) require the Trustee-
Manager Directors to (a) be independent from management and business relationships with the
Trustee-Manager and (b) for the Trustee-Manager Directors to be independent from management
and business relationships with the Trustee-Manager and from every Substantial shareholder of
the Trustee-Manager, namely, the Sponsor, subject to certain conditions. (See General
Information Waivers from the MAS Paragraph (17) for further details on the exemption
granted and the conditions imposed by the MAS.) The stapling together of OUE H-BT Units and
OUE H-REIT Units means that the holders of OUE H-BT Units are at the same time the investors
of the Stapled Securities, who stand to benefit as a whole regardless of whether the appointed
Trustee-Manager Directors are independent of the Sponsor. Since the OUE H-REIT Units and
OUE H-BT Units are held by the same pool of investors in the same proportion, concerns and
potential abuses applicable to interested party transactions will be absent in transactions between
OUE H-REIT and OUE H-BT.
Dealings in Stapled Securities or, as the case may be, OUE H-BT Units
Currently, the BTA requires each Trustee-Manager Director to give notice in writing to the
Trustee-Manager of his acquisition of Stapled Securities or (in the event that Unstapling has taken
place) OUE H-BT Units or changes in the number of Stapled Securities, or, as the case may be,
OUE H-BT Units which he holds or in which he has an interest, within two Business Days after the
date on which the Trustee-Manager Director became a director of the Trustee-Manager or the date
of such acquisition or the occurrence of the event giving rise to changes in the number of Stapled
Securities, or, as the case may be, OUE H-BT Units which he holds or in which he has an interest.
Pursuant to Section 137N of the SFA, each Trustee-Manager Director and the Chief Executive
Officer of the Trustee-Manager is to give notice in writing to the Trustee-Manager of, among other
things, particulars of his interest in OUE H-BT Units or of changes in the number of OUE H-BT
Units which he has an interest, within two Business Days after the date on which the
Trustee-Manager Director or the Chief Executive Officer of the Trustee-Manager became a
director or chief executive officer of the Trustee-Manager or the date on which he acquires an
interest in the OUE H-BT Units or he becomes aware of the occurrence of the event giving rise
to changes in the number of OUE H-BT Units in which he has an interest.
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All dealings in Stapled Securities or, as the case may be, OUE H-BT Units by the Trustee-Manager
Directors and the Chief Executive Officer of the Trustee-Manager, will be announced via SGXNET,
with the announcement to be posted on the internet at the SGX-ST website http://www.sgx.com.
The directors and employees of the Trustee-Manager are prohibited from dealing in the Stapled
Securities or, as the case may be, OUE H-BT Units:
in the period commencing one month before the public announcement of the annual results
and (where applicable) property valuations, and two weeks before the public announcement
of the quarterly results of OUE H-Trust or (in the event that Unstapling has taken place) OUE
H-BT, and ending on the date of announcement of the relevant results or, as the case may
be, property valuations; and
at any time while in possession of price sensitive information.
The directors and employees of the Trustee-Manager are also prohibited from communicating
price sensitive information to any person.
All employees must obtain clearance from the Compliance Officer at least two Business Days prior
to any intended purchase or sale of the Stapled Securities or (as the case may be) OUE H-BT
Units. In addition, the trading pre-clearance process requires an employee to represent, inter alia,
prior to making any trade in any Stapled Securities or (as the case may be) OUE H-BT Units that:
he/she is not in possession of material non-public information with respect to the Stapled
Securities or (as the case may be) OUE H-BT Units, OUE H-BT or OUE H-Trust; and
the trade is not inconsistent with the best interests of, and does not give rise to a potential
breach of fiduciary duty owed to the Trustee-Manager.
Pursuant to Section 137R of the SFA, the Trustee-Manager is to announce to the SGX-ST the
particulars of its holdings in the OUE H-BT Units and any changes thereto as soon as practicable
and in any case no later than the end of the Business Day in Singapore following the day on which
it acquires or, as the case may be, disposes of any OUE H-BT Units.
Management of Business Risk
The following will be put in place by the Trustee-Manager to manage business risk when OUE
H-BT becomes active.
The Trustee-Manager Board will meet quarterly or more frequently if necessary and will review the
financial performance of OUE H-BT against a previously approved budget. The Trustee-Manager
Board will also review the business risks of OUE H-BT, examine liability management and will act
upon any comments from both the internal and external auditors of OUE H-BT.
In assessing business risks, the Trustee-Manager Board will consider the economic environment
and risks relevant to the property industry. It will review management reports and feasibility
studies on individual development projects prior to approving major transactions. The
management will meet regularly to review the operations of the Trustee-Manager and OUE H-BT
and discuss any disclosure issues.
216
Interested Person Transactions and Potential Conflicts of Interest
In general, transactions between:
an entity at risk (in this case, the Trustee-Manager (acting in its capacity as the Trustee-
Manager of OUE H-BT) or any of the subsidiaries or associated companies of OUE H-BT); and
any of the Interested Persons (namely the Trustee-Manager (acting in its personal capacity),
a related corporation or related entity of the Trustee-Manager (other than a subsidiary or
subsidiary entity of OUE H-BT), an associated company or associated entity of the
Trustee-Manager (other than an associated company or associated entity of OUE H-BT), a
Director, Chief Executive Officer or controlling shareholder of the Trustee-Manager, a
controlling Stapled Securityholder or an associate of any such Director, Chief Executive
Officer, controlling shareholder or controlling Stapled Securityholder),
would constitute an Interested Person Transaction.
The Trustee-Managers Internal Control System
The Trustee-Manager will establish an internal control system to ensure that all future Interested
Person Transactions:
will be undertaken on normal commercial terms; and
will not be prejudicial to the interests of OUE H-BT and Stapled Securityholders.
The Trustee-Manager will maintain a register to record all Interested Person Transactions which
are entered into by OUE H-BT and the bases, including any quotations from unrelated parties
obtained to support such bases, on which they are entered into.
The Trustee-Manager will also incorporate into its internal audit plan a review of all Interested
Person Transactions entered into by OUE H-BT.
Where matters concerning OUE H-BT relate to transactions entered into or to be entered into by
the Trustee-Manager for and on behalf of OUE H-BT with a Related Party of the Trustee-Manager
(which would include relevant associates thereof) or OUE H-BT, the Trustee-Manager is required
to consider the terms of such transactions to satisfy itself that such transactions are conducted:
on normal commercial terms;
are not prejudicial to the interests of OUE H-BT and Stapled Securityholders; and
in accordance with all applicable requirements of the Listing Manual and the BTA relating to
the transaction in question.
If the Trustee-Manager is to sign any contract with a Related Party of the Trustee-Manager or OUE
H-BT, the Trustee-Manager will review the contract to ensure that it complies with the provisions
of the Listing Manual and the BTA relating to Interested Person Transactions (as may be amended
from time to time) as well as such other guidelines as may from time to time be prescribed by the
MAS and the SGX-ST to apply to business trusts.
Save for the transactions described under Management and Corporate Governance OUE H-BT
Interested Person Transactions and Potential Conflicts of Interest Interested Person
Transactions in Connection with the Setting up of OUE H-BT, OUE H-BT will comply with Rule
905 of the Listing Manual by announcing any Interested Person Transaction in accordance with
the Listing Manual if such transaction, by itself or when aggregated with other Interested Person
217
Transactions entered into with the same Interested Person during the same financial year, is 3.0%
or more of OUE H-BTs latest audited net tangible assets. The aggregate value of all Interested
Person Transactions which are subject to Rules 905 and 906 of the Listing Manual in a particular
financial year will be disclosed in OUE H-BTs annual report for the relevant financial year.
Interested Person Transactions in connection with the setting up of OUE H-BT
The Trustee-Manager, on behalf of OUE H-BT, entered into a number of transactions with certain
Interested Persons in connection with the setting up of OUE H-BT. These Interested Person
Transactions are as follows:
The Trustee-Manager entered into the OUE H-BT Trust Deed in connection with the setting
up of OUE H-BT. The Trustee-Manager has also entered into the Stapling Deed with the REIT
Manager and REIT Trustee. The terms of the OUE H-BT Trust Deed and Stapling Deed are
generally described in The Formation and Structure of OUE H-Trust, OUE H-REIT and OUE
H-BT.
The Managers and the Sponsor have entered into the Licence Agreement in respect of
certain trade marks concerning the use of the OUE brand. The terms of the Licence
OUE H-REIT, OUE H-BT and the Properties Licence Agreement.
Exempted Agreements
The entry into and the fees and charges payable by OUE H-BT under the OUE H-BT Trust
Deed, the Stapling Deed, the Licence Agreement and the Mandarin Gallery Licence
Agreement, which each constitutes an Interested Person Transaction, are deemed to have
been specifically approved by Stapled Securityholders upon purchase of the Stapled
Securities and are therefore not subject to Rules 905 and 906 of the Listing Manual to the
extent that there is no subsequent change to the rates and/or bases of the fees charged
thereunder which will adversely affect OUE H-BT. However, the renewal of such agreements
or amendments thereof will be subject to Rules 905 and 906 of the Listing Manual. (See
Overview Certain Fees and Charges for the fees and charges payable by OUE H-BT in
connection with the establishment of OUE H-BT.)
Any renewal of such agreements or amendments thereof will be subject to Rules 905 and 906 of
the Listing Manual. (See Management and Corporate Governance OUE H-BT Interested
Person Transactions and Potential Conflicts of Interest The Trustee-Managers Internal Control
System for further details.)
Future Interested Person Transactions
OUE H-BT is regulated by the Listing Manual and the BTA. The Listing Manual and the BTA
regulate all Interested Person Transactions entered into by OUE H-BT. Depending on the
materiality of the transaction, OUE H-BT may be required to make a public announcement of the
transaction (pursuant to Rule 905 of the Listing Manual), or to make a public announcement of and
to obtain the prior approval of Stapled Securityholders for the transaction (pursuant to Rule 906
of the Listing Manual). Section 86 of the BTA further requires (i) the Trustee-Manager Board to
make a written statement in accordance with a resolution of the Trustee-Manager Board and
signed by not less than two Directors on behalf of the Trustee-Manager Board certifying that,
among other things, the relevant Interested Person Transaction is not detrimental to the interests
of all holders of OUE H-BT Units as a whole based on the circumstances at the time of the
transaction, and (ii) the Chief Executive Officer of the Trustee-Manager to, in his or her personal
capacity, make a written statement certifying that he or she is not aware of any violation of duties
218
of the Trustee-Manager that would have a material adverse effect on the business of OUE H-BT
or the interests of all holders of OUE H-BT Units as a whole. These statements must be annexed
to the profit and loss accounts of OUE H-BT in its annual financial statements.
In addition to these written statements, Section 87 of the BTA also requires the Board to attach to
OUE H-BTs profit and loss accounts, a statement of policies and practices in relation to
management and governance of OUE H-BT containing such information as prescribed by
Regulation 20 of the BTR including, among other things, a description of measures put in place
by the Trustee-Manager to review Interested Person Transactions in relation to OUE H-BT.
The OUE H-BT Trust Deed requires the Trustee-Manager to comply with the provisions of the
Listing Manual relating to Interested Person Transactions as well as the BTA and such other
guidelines relating to Interested Person Transactions as may be prescribed by the MAS or the
SGX-ST applying to business trusts.
The Trustee-Manager may at any time in the future seek a general annual mandate from Stapled
Securityholders pursuant to Rule 920(1) of the Listing Manual for recurrent transactions of a
revenue or trading nature or those necessary for its day-to-day operations with Interested
Persons, and all transactions conducted under such a general mandate for the relevant financial
year will not be subject to the requirements under Rules 905 and 906 of the Listing Manual. In
seeking such a general annual mandate, the Trustee-Manager will appoint an independent
financial adviser pursuant to Rule 920(1)(b)(v) of the Listing Manual to render an opinion as to
whether the methods or procedures for determining the transaction prices of the transactions
contemplated under the annual general mandate are sufficient in an effort to ensure that such
transactions will be carried out on normal commercial terms and will not be prejudicial to the
interests of OUE H-BT and Stapled Securityholders.
Both the BTA and the Listing Manual requirements would have to be complied with in respect of
a proposed Interested Person Transaction that is prima facie governed by both sets of rules.
Where matters concerning OUE H-BT relate to transactions entered or to be entered into by the
Trustee-Manager for and on behalf of OUE H-BT with an Interested Person (as defined under the
Listing Manual and/or the BTA), the Trustee-Manager is required to ensure that such transactions
are conducted in accordance with applicable requirements of the Listing Manual, the BTA and/or
such other applicable guidelines relating to the transaction in question.
Generally, under the Listing Manual, the Trustee-Manager, its connected persons (as defined in
the Listing Manual) and any director of the Trustee-Manager are prohibited from voting their
respective own OUE H-BT Units at, or being part of a quorum for, any meeting to approve any
matter in which it has a material interest.
Potential Conflicts of Interest
The Trustee-Manager has instituted the following procedures to deal with conflict of interest
issues:
all resolutions in writing of the Trustee-Manager Directors in relation to matters concerning
OUE H-Trust must be approved by a majority of the Trustee-Manager Directors, including at
least one independent Trustee-Manager Director;
all executive officers will be employed by the Trustee-Manager;
in respect of matters in which the Sponsor has an interest, direct or indirect, any nominees
appointed by the Sponsor to the Trustee-Manager Board to represent its/their interests will
219
abstain from voting. In such matters, the quorum must comprise a majority of the
independent Trustee-Manager Directors and must exclude any nominee directors of the
Sponsor; and
where matters concerning OUE H-BT relate to transactions entered into or to be entered into
by the Trustee-Manager for and on behalf of OUE H-BT with a Related Party of the
Trustee-Manager (which would include relevant associates thereof) or OUE H-BT, the
Trustee-Manager Board is required to consider the terms of the transactions to satisfy itself
that the transactions are conducted on normal commercial terms, are not prejudicial to the
interests of OUE H-BT and Stapled Securityholders and are in compliance with all applicable
requirements of the Listing Manual and the BTA relating to the transaction in question. If the
Trustee-Manager is to sign any contract with a Related Party of the Trustee-Manager or OUE
H-BT, the Trustee-Manager will review the contract to ensure that it complies with the
provisions of the Listing Manual and the BTA relating to Interested Person Transactions (as
may be amended from time to time) as well as any other guidelines as may from time to time
be prescribed by the MAS and the SGX-ST that apply to business trusts.
It should be noted that under Section 6(3) of the BTA, the Trustee-Manager is prohibited from
carrying on any business other than the management and operation of OUE H-BT as its
Trustee-Manager.
ANNUAL REPORTS
So long as OUE H-REIT is stapled to OUE H-BT, an annual report covering the period
incorporating disclosures as required under the Listing Manual and all relevant laws will be issued
by OUE H-Trust within the timeframe as set out in the Listing Manual and the CIS Code, and at
least 14 days before the annual general meeting of Stapled Securityholders, which will comprise
consolidated financial statements of OUE H-Trust and the separate financial statements of OUE
H-REIT and OUE H-BT to Stapled Securityholders, containing, among other things, the following
key items:
(i) details of all real estate transactions entered into during the accounting period;
(ii) details of OUE H-REITs and (if applicable) OUE H-BTs real estate assets;
(iii) the tenant profile of OUE H-REITs real estate assets, including:
(a) the total number of tenants;
(b) the top 10 tenants, and the percentage of the total gross rental income attributable to
each of these top 10 tenants;
(c) trade sector mix of tenants, in terms of the percentage of total gross rental income
attributable to major trade sectors; and
(d) lease maturity profile, in terms of the percentage of total gross rental income, for each
of the next five years;
(iv) if applicable, with respect to investments other than real estate property:
(a) a brief description of the business;
(b) proportion of share capital owned;
(c) cost;
220
(d) (if relevant) directors of the Managers valuation and in the case of listed investments,
market value;
(e) dividends received during the year (indicating any interim dividends);
(f) dividend cover or underlying earnings;
(g) any extraordinary items; and
(h) net assets attributable to investments;
(v) cost of each property held by OUE H-REIT and (if applicable) OUE H-BT;
(vi) annual valuation of each property of OUE H-REIT and (if applicable) OUE H-BT;
(vii) analysis of provision for diminution in value of each property of OUE H-REIT and (if
applicable) OUE H-BT (to the extent possible);
(viii) annual rental income for each property;
(ix) occupancy rates for each property;
(x) remaining term for each of OUE H-REITs and (if applicable) OUE H-BTs leasehold
properties;
(xi) amount of distributable income of OUE H-REIT and (if applicable) OUE H-BT held pending
distribution;
(xii) details of assets other than real estate of OUE H-REIT and (if applicable) OUE H-BT;
(xiii) details of OUE H-REITs and (if applicable) OUE H-BTs exposure to derivatives;
(xiv) details of OUE H-REITs and (if applicable) OUE H-BTs investments in other property
funds;
(xv) details of borrowings by and other financial accommodation to OUE H-REIT and (if
applicable) OUE H-BT;
(xvi) value of the OUE H-REIT Deposited Property and the NAV of OUE H-REIT and OUE H-BT
at the beginning and end of the accounting period under review;
(xvii) the prices at which the Stapled Securities were quoted at the beginning and end of the
accounting period, and the highest and lowest prices at which the Stapled Securities were
traded on the SGX-ST during the accounting period;
(xviii) volume of trade in the Stapled Securities during the accounting period;
(xix) the aggregate value of all transactions entered into by OUE H-REIT with a Related Party
and all transactions entered into by (if applicable) OUE H-BT with an Interested Party during
the accounting period under review;
(xx) total operating expenses of OUE H-REIT and (if applicable) OUE H-BT in respect of the
accounting period, including expenses paid to the REIT Manager, the REIT Trustee, the
Trustee-Manager and Related Parties (if any), and taxation incurred in relation to OUE
H-REITs and (if applicable) OUE H-BTs properties;
221
(xxi) historical performance of OUE H-REIT and (if applicable) OUE H-BT, including rental
income obtained and occupancy rate for each property where applicable in respect of the
accounting period and other various periods of time (e.g. one-year, three-year, five-year or
10-year) and any distributions made;
(xxii) names of the REIT Manager, the REIT Trustee and the Trustee-Manager, together with an
indication of the terms and duration of their appointment and the basis of their
remuneration;
(xxiii) total amount of fees paid to the REIT Manager, the REIT Trustee and the Trustee-Manager
and the price(s) at which any Stapled Securities were issued in part payment thereof;
(xxiv) an analysis of realised and unrealised surpluses or losses, stating separately profits and
losses as between listed and unlisted investments, if applicable;
(xxv) any extraordinary items; and
(xxvi) such other items which may be required to be disclosed under the prevailing applicable
laws, regulations and rules in Singapore.
The first report will cover the period from the Listing Date to 31 December 2013.
Additionally, OUE H-Trust will announce the NAV of OUE H-REIT and OUE H-BT on a quarterly
basis. The announcement of the NAV of OUE H-REIT and OUE H-BT will be based on the latest
available valuation of the real estate of OUE H-REIT and OUE H-BT, which will be conducted at
least once a year (as required under the Property Funds Appendix). The first such valuation will
be conducted by 31 December 2013.
The Trustee-Manager Board is also required under Section 86 of the BTA to make a written
statement, in accordance with a board resolution and signed by not less than two directors on
behalf of the Trustee-Manager Board, certifying that:
(i) fees or charges paid or payable out of the OUE H-BT Trust Property to the Trustee-Manager
are in accordance with the OUE H-BT Trust Deed;
(ii) Interested Person Transactions are not detrimental to the interests of all the holders of OUE
H-BT Units as a whole based on the circumstances at the time of the transaction; and
(iii) the Trustee-Manager Board is not aware of any violation of duties of the Trustee-Manager
which would have a materially adverse effect on the business of OUE H-BT or on the
interests of all the holders of OUE H-BT Units as a whole.
Such statement must be attached to the profit and loss accounts of OUE H-BT.
The chief executive officer of the Trustee-Manager is required under Section 86 of the BTA, in his
personal capacity, to make a written statement certifying that he is not aware of any violation of
duties of the Trustee-Manager which would have a materially adverse effect on the business of
OUE H-BT or on the interests of all the holders of OUE H-BT Units as a whole.
Such statement must be attached to the profit and loss accounts of OUE H-BT.
222
THE SPONSOR
THE SPONSOR
OUE was incorporated in Singapore on 8 February 1964 under the Companies Ordinance as a
limited liability company. OUE is listed on the Main Board of the SGX-ST.
OUE is a diversified real estate owner, developer and operator with a real estate portfolio located
in prime locations in Singapore, and hotels in Singapore, Malaysia, Indonesia and the PRC. The
Sponsor Group focuses its business across the hospitality, retail, commercial and residential
property segments. It operates its hospitality business under the brands Meritus, Mandarin and
Meritus Mandarin which are known for developing quality hospitality services. It develops and
holds commercial and retail properties for investment and rental income purposes while it
develops residential properties for sale.
capitalisation of S$2.6 billion as at the Latest Practicable Date, being 28 June 2013. OUE has an
experienced management team and established track record of operations dating back to 1964.
As at 31 March 2013, OUEs hospitality businesses include 3,244 hotel rooms operated in
Singapore, Malaysia, Indonesia and the PRC. OUEs substantial size is also evidenced by its
profitability and balance sheet strength, with OUE reporting a total net income of S$90.8 million
for the financial year ended 31 December 2012 and total assets of S$5.9 billion and total
shareholders equity of S$3.2 billion as at 31 December 2012.
Background of the Sponsor Group
Historically, the Sponsor Group derived most of its revenue from its hospitality operations. As at
31 March 2013, the Sponsor Group manages and operates six hotels and resort and has
ownership interests in five of the six hotels and resort operated by the Sponsor Group, including
complete ownership of Mandarin Orchard Singapore, Crowne Plaza Changi Airport and Meritus
Mandarin Haikou.
The Sponsor Group has diversified its business into retail and commercial sectors with the
conversion of the ground floor lobby and the former retail space of Mandarin Orchard Singapore
into Mandarin Gallery, a luxury retail mall which occupies the first four levels of 333A Orchard
Road, as well as the acquisition of 6 Shenton Way Towers One and Two. Mandarin Gallery
commenced operations in November 2009.
The Sponsor Group completed the development of its flagship commercial building, OUE
Bayfront, which is located at 50 Collyer Quay. It is an 18-storey office tower and the properties
adjoining it are OUE Tower, an aerial plaza tower, and OUE Link, an aerial pedestrian access way.
OUE Bayfront is wholly owned by the Sponsor Group. As at 31 March 2013, OUE Bayfront is
94.1% tenanted with a good tenant base. The newly opened restaurant ME@OUE is located at the
top level of OUE Bayfront. OUE Tower, which has a revolving platform, is tenanted to the Tung Lok
Group which operates the fine dining restaurants Tong Le and Shinji. OUE Bayfront is linked to the
Raffles Place MRT by OUE Link, an aerial pedestrian access way. OUE Link is fully tenanted with
a mix of retail and F&B outlets.
Through its shareholding interest in OUB Centre Limited, the Sponsor Group has a partial indirect
interest in One Raffles Place. One Raffles Place is an integrated development located
strategically within the CBD comprising two office towers and a retail podium. One Raffles Place
Towers 1 and 2 are designated Grade A office buildings which are 62-storeys and 38-storeys high
respectively. The six-storey retail podium includes a basement level connecting to the Raffles
Place MRT station.
223
The Sponsor Group is also developing a residential property, Twin Peaks located at 33 Leonie Hill
Road, close to the heart of Orchard Road, comprising two 35-storey blocks of high-end fully
furnished apartments. Its target completion is in or around early 2015.
The Sponsor Groups strategy is to invest in, develop and manage a diversified portfolio of real
estate with its core concentration in Singapore. It believes the Singapore real estate market offers
significant growth potential notwithstanding the present challenging environment. With its diverse
portfolio and asset base, the Sponsor Group believes that it is well-positioned to benefit from this
growth potential in the long term.
The Sponsor Group has a track record in unlocking value for its shareholders through the
enhancement of existing assets. Examples of such successful enhancement works are illustrated
below:
Track Record in Asset Enhancement
Redevelopment of the low block podium
into a 350,000 sq ft 38-storey Grade A
office building with column free plates of
approximately 11,000 sq ft
TOP obtained in August 2012
Redevelopment of the well located
former site of Overseas Union House
into a premium commercial
development comprising a Grade A
office building, complemented by retail
facilities at its ancillary properties, OUE
Tower and OUE Link
Completed in 2011
Business Operations of the Sponsor Group
The Sponsor Group has four key businesses, namely (i) hospitality, (ii) the development,
management and operation of commercial properties, (iii) the development, management and
ownership of retail properties and (iv) the development and sale of residential properties. The
properties within its diversified portfolio include hotels and resort, as well as retail, commercial
and residential properties primarily located in Singapore. The Sponsor Group also owns and
operates hotels and resort located in PRC and Malaysia.
The Sponsor Group aims to build a strong cash flow position from its hospitality, retail, residential
and commercial segments.
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OUEs Property Highlights
Fair Value
Ownership
(%) Carpark Lots
Mandarin
Orchard
Singapore
1,220.0
(1)
A 37-storey Main Tower and a 39-
storey Orchard Wing housing
1,051 rooms located in the heart
of renowned shopping belt,
Orchard Road
100.0 441 (shared
with Mandarin
Gallery)
Crowne Plaza
Changi Airport
291.0
(2)
A 9-storey hotel with 320 rooms,
including 27 suites, directly
connected to Changi Airport
Terminal 3 and within short
distance to Changi Business Park
and Singapore Expo
100.0
Meritus
Mandarin
Haikou
59.5
(2)(3)
A 23-storey hotel with 318 rooms
at Wenhua Road, Longhua
District, Haikou, Hainan Province,
PRC
100.0 128
Meritus
Shantou China
62.5
(2)(4)
A 21-storey tower with 318 rooms
at Jinsha East Road, Shantou,
Guangdong Province, PRC
80.0 248
Mandarin
Gallery
536.0
(1)
Mandarin Gallery is a prime retail
landmark in the heart of Orchard
Road; features six duplexes and
six street front units
100.0 Shared with
Mandarin
Orchard
Singapore
Marina
Mandarin
N/A
(5)
A 21-storey hotel which is located
directly opposite the Suntec
Singapore International
Convention and Exhibition Centre
30.0
OUE Bayfront
(including OUE
Tower and
OUE Link)
1,081.0
(8)
This 18-storey office development
and adjoining properties offer
views of Marina Bay
100.0 245
One Raffles
Place Tower 1
and Retail
Podium
1,608.8
(6)
(Total fair
value for One
Raffles Place
Tower 1, Tower
2 and Retail
Podium)
A 282 metre-tall office tower
comprising 62 storeys of prime
Grade A office space and a
5-storey retail podium equipped
with one basement level, located
in Singapores CBD
40.8
(7)
288 (shared
with Tower 2)
One Raffles
Place Tower 2
Please see the
fair value in
the row above
A 38-storey commercial building
equipped with one basement level
adjacent to Tower 1
40.8
(7)
Shared with
Tower 1
6 Shenton Way
Towers One
and Two
1,400.0
(2)
49-storey and 37-storey
commercial towers on Shenton
Way, Singapore
100.0 411
Twin Peaks 679.0
(8)
A residential development
comprising two identical 35-storey
blocks situated close to the heart
of Orchard Road
100.0 467
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Notes:
(1) Based on independent valuations as at 31 March 2013.
(2) Latest valuation as at 31 December 2012.
(5) The valuation of Marina Mandarin is not public information as it is owned by a private company and the Sponsor
Group only holds an effective 30.0% interest in Marina Mandarin.
(6) Latest valuation for One Raffles Place Tower 1, Tower 2 and Retail Podium as at 31 December 2012.
(7) The Sponsor Group owns a 50.0% stake in OUB Centre Limited, which is a beneficiary and the trustee of the assets
comprising One Raffles Place. OUB Centre Limited was the beneficiary of 81.54% of the trust as of the date it was
declared.
(8) Latest valuation as at 31 March 2013.
Hospitality
The hotels and resort are located in Singapore, Malaysia, Indonesia and the PRC and as at 31
March 2013, have a total of 3,244 hotel rooms and 28 F&B establishments available for use by
guests and patrons.
The Sponsor Group operates its hotels and resort through management agreements between the
Sponsor Group and each hotel and resort. These agreements were signed between March 1987
and July 2009. The terms of the agreements range from 10 to 30 years. One of the agreements
contains an option to extend for a further 30-year period, one contains an option to extend for two
10-year periods and one contains an option to extend for two further five-year periods.
For the financial year ended 31 December 2012, the Sponsor Groups hospitality business
(including management fees) derived 83.6% of its revenue from its operations in Singapore,
15.9% of its revenue from its operations in PRC, and 0.5% of its revenue from its operations in
other countries.
Hotels
The following table contains certain information about the Sponsor Groups key hotel properties:
Mandarin
Orchard
Singapore
Crowne Plaza
Changi
Airport
Meritus
Mandarin
Haikou
Meritus
Shantou
China
Ownership (%) 100 100 100 80
Number of rooms 1,051 320
(4)
318 318
GFA (sq ft) 990,277
(2)
336,943 578,748 711,845
Appraised Value
(1)
(S$ million)
1,220.0
(3)
291.0 59.5
(5)
62.5
(6)
Notes:
(1) Appraised Values are as at 31 December 2012.
(3) Based on independent valuation as at 31 March 2013.
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Below is a description of the hospitality properties (excluding Mandarin Orchard Singapore) in
which the Sponsor Group owns a significant interest.
Crowne Plaza Changi Airport
Crowne Plaza Changi Airport is a business hotel located at 75 Airport Boulevard, Singapore
819664. The global brand name hotel is the first and only hotel situated within the immediate
vicinity of the passenger terminals of Singapore Changi Airport. The hotel was voted one of
the Worlds Best Airport Hotels at the Skytrax World Airport Awards 2011, and one of the Best
Airport Hotels in Asia Pacific at the Business Traveller Asia-Pacific Awards 2010.
Marina Mandarin Singapore
Marina Mandarin Singapore is located at 6 Raffles Boulevard within the Marina Square
commercial complex, Singapore. It is directly opposite the Suntec Singapore International
Convention and Exhibition Centre. The hotel comprises a total GFA of 651,531 sq ft.
Construction commenced in 1984 and the hotel officially opened in 1987. The 21-storey hotel
has 575 luxury rooms and its facilities include the Meritus Club, three restaurants, a lounge,
a cafe, a spa, a 24-hour fitness centre and an executive centre. Extensive banquet facilities
can accommodate up to 700 guests.
Aquamarina Hotel Private Limited owns the Marina Mandarin Singapore hotel. The Sponsor
Group has an effective 30% ownership interest in the Marina Mandarin Singapore hotel
through its wholly-owned subsidiary, Hotel Investment (Marina) Private Limited and its
shareholding interest in Marina Centre Holdings Private Limited.
Meritus Mandarin Haikou
Meritus Mandarin Haikou is located at 18 Wenhua Road, Haikou, Hainan Province, PRC.
The hotel comprises a total GFA of 578,748 sq ft. It is a 23-storey tower with two basement
levels. It has 318 rooms, 128 car parking spaces, four F&B outlets, six meeting rooms, and
the Meritus Lifestyle Club. It also contains the largest column-free ballroom in Haikou. The
hotel is located in the heart of Haikous financial district, and its eastern front faces Binhai
Avenue, Haikous main thoroughfare.
Meritus Shantou China
Meritus Shantou China is located on 97 Jinsha East Road, Shantou, Guangdong Province,
PRC. The hotel is located near Shantous financial district and comprises a total GFA of
711,845 sq ft. It comprises a 21-storey tower that contains 318 rooms, four F&B outlets, five
meeting rooms, a ballroom and recreational facilities including an indoor swimming pool, a
Meritus Lifestyle Club and a Meritus Recreational Club.
Commercial
The Sponsor Groups commercial property portfolio currently consists of OUE Bayfront, 6 Shenton
Way Towers One and Two and One Raffles Place. The Sponsor Group focuses on identifying
prime commercial properties for development or redevelopment. On 11 March 2013, further
strengthening its commercial property portfolio, the Sponsor Group announced that it had entered
into a sale and purchase agreement to acquire the US Bank Tower building in downtown Los
Angeles. The acquisition has since been completed.
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OUE Bayfront, OUE Tower and OUE Link
The property is located within Singapores CBD at 50, 60 and 62 Collyer Quay, and
comprises the Sponsor Groups flagship commercial building, an 18-storey office tower
known as OUE Bayfront at the site of the former Overseas Union House, as well as OUE
Tower, an aerial tower housing a restaurant and, OUE Link, a linkbridge respectively.
One Raffles Place
One Raffles Place is located in Singapores main financial district, atop the Raffles Place
MRT station. It was previously known as OUB Centre. The development comprises Tower 1
and the retail podium, and Tower 2. OUE owns a 50% stake in OUB Centre Limited, which
is the trustee and beneficiary of a trust that holds the land and properties that comprise One
Raffles Place. Based on the original trust documents, OUB Centre Limited was the
beneficiary of 81.54% of the trust on the date of its declaration.
One Raffles Place Tower 1 currently comprises a 62-storey office tower and a six-storey retail
podium with one level of basement shopping containing over 503,962 sq ft of lettable space.
The newly-completed Tower 2, a 38-storey Grade A office building, has drawn keen demand
from international companies and professional firms, following the success of Tower 1. It has
attracted tenants such as Virgin Active. The new tower has a Green Mark Platinum
Certification for its energy efficiency and environmentally sustainable design awarded by
BCA.
6 Shenton Way Towers One and Two
With the anchor tenant DBS Bank Ltd. having vacated the premises at the end of 2012, the
property presently has a 67.1% committed occupancy as at 31 March 2013. The Sponsor
Group is considering various options to enhance the value of the property.
Retail
The Sponsor Group has a tailored approach to marketing its retail space. Its marketing teams
goal is to maintain and enhance the appeal of Mandarin Gallery and of any future retail property
managed by the Sponsor Group. The Sponsor Group seeks to maintain a given retail propertys
focus on its respective target audience, making adjustments to suit changes in economic and
retail trends by introducing targeted changes maintaining the propertys overall image in the eyes
of relevant consumers.
Below is a description of the Sponsor Groups retail space (excluding Mandarin Gallery).
Proposed retail mall at 6 Shenton Way
The proposed retail mall will have a GFA of 241,855 sq ft and an expected NLA of 160,000
sq ft upon completion. When completed, based on the expected NLA, the retail mall will cover
a larger area than Mandarin Gallery.
Residential
The Sponsor Group is also engaged in residential property development and is currently
developing Twin Peaks. The Sponsor Group outsources the construction and marketing functions
within its residential segment to third parties.
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Twin Peaks
The project known as Twin Peaks is located at 33 Leonie Hill Road near Orchard Road in
Singapore. The elevated site of the property has views of the Orchard Road shopping belt
and the city. The development is being undertaken by Cove Development Pte. Ltd., OUEs
wholly-owned subsidiary. The Sponsor Group acquired the property in 2008 and commenced
sales of units in September 2010. Twin Peaks is the first condominium to be sold
fully-furnished in Singapore, two identical 35-storey blocks that will have a total of 462 units
configured into nine luxury unit layouts.
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THE FORMATION AND STRUCTURE OF OUE H-TRUST, OUE H-REIT
AND OUE H-BT
The OUE H-REIT Trust Deed, the OUE H-BT Trust Deed and the Stapling Deed (collectively,
the Deeds) are complex documents and the following is a summary only and is qualified in its
entirety by, and is subject to, the contents of the Deeds. Investors should refer to the Deeds
themselves to confirm specific information or for a detailed understanding of OUE H-Trust, OUE
H-REIT and OUE H-BT. A copy of the Stapling Deed and the OUE H-REIT Trust Deed are available
for inspection at the registered office of the REIT Manager while a copy of the Stapling Deed and
the OUE H-BT Trust Deed are available for inspection at the registered office of the Trustee-
Manager.
THE FORMATION AND STRUCTURE OF OUE H-TRUST
OUE H-Trust is a stapled group comprising units in OUE H-REIT and OUE H-BT. The OUE H-REIT
Units and OUE H-BT Units are stapled together under the terms of the Stapling Deed and cannot
be traded separately. The OUE H-REIT Units and OUE H-BT Units together form the Stapled
Securities, and are treated as one instrument. OUE H-REIT cannot issue (including the issue of
partly paid units), transfer, register the transfer, consolidate or divide, redeem or buy back or
cancel any of its units, unless the same action occurs in respect of OUE H-BT, and vice versa.
following occurs:
it is appointed by OUE H-REIT as a master lessee of a property. OUE H-BT will not, however,
manage or operate any of the hotel or hospitality assets in OUE H-REITs portfolio, and the
intention is for OUE H-BT to appoint a professional hotel and serviced residence operator, to
manage that hotel or hospitality asset. OUE H-BT exists primarily as a master lessee of last
resort with regard to the Hotel so that in the event that the Master Lessee terminates or does
not renew the Master Lease Agreement beyond its initial term and OUE H-REIT is unable to
lease the Hotel to another master lessee for any reason, including failing to reach agreement
on commercially favourable terms with other potential master lessees, OUE H-BT will enter
into a master lease agreement for the Hotel on substantially the same terms as the previous
Master Lease Agreement (See The Formation and Structure of OUE H-Trust, OUE H-REIT
and OUE H-BT The Formation and Structure of OUE H-BT for further details);
OUE H-REIT acquires hotels or hospitality assets in the future, and, if there are no other
suitable master lessees, leases these acquired hotels or hospitality assets to OUE H-BT.
OUE H-BT will then become a master lessee for that hotel or hospitality asset and will
appoint a professional manager to manage that hotel or hospitality asset; or
OUE H-BT expands into other activities on its own such as project development and asset
acquisitions.
Further, through OUE H-BT, OUE H-Trust may undertake certain hospitality-related development
projects, acquisitions and investments which may not be suitable for OUE H-REIT. OUE H-BT may
thus acquire and/or invest in properties in its own name.
OUE H-REIT will not guarantee any debt of OUE H-BT, and vice versa. This will help to shield each
entity from the others financial obligations because each entitys creditors will not have recourse
to the other.
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The Stapling Deed
The OUE H-REIT Units and OUE H-BT Units are stapled together under the terms of the Stapling
Deed. The Stapling Deed is governed by the laws of Singapore. In the event of any
inconsistencies, the terms and conditions of the Stapling Deed take precedence over the
respective constitutions of the two entities forming OUE H-Trust namely, the OUE H-REIT Trust
Deed and the OUE H-BT Trust Deed.
Under the terms of the Stapling Deed, OUE H-REIT and OUE H-BT must co-operate with each
other in all matters concerning the Stapled Securities and must make available to each other all
information in their possession as may be necessary or desirable to fulfil their respective
obligations under the Stapling Deed. OUE H-REIT and OUE H-BT must also keep confidential any
information obtained concerning the affairs or assets of the other.
Notwithstanding the above, OUE H-REIT and OUE H-BT will remain separate entities. The
Stapling Deed does not create any association, joint venture or partnership between OUE H-REIT
and OUE H-BT for any purpose or authorising the sharing of the benefits of any assets (and any
profits therefrom).
The Stapling Deed requires each Stapled Securityholder to hold the same number of OUE H-REIT
Units and OUE H-BT Units. These units are stapled, meaning that an individual OUE H-REIT Unit
may not be transferred, or otherwise dealt with, without the other corresponding stapled OUE
H-BT Unit and vice versa. The units that together form each of the Stapled Securities are treated
as one instrument for trading purposes. Each of the entities in OUE H-Trust must not issue
(including the issue of partly paid units and options), transfer, register the transfer, consolidate or
divide, redeem or buy back or cancel any of the instruments that constitute the Stapled Securities
unless the same action occurs in respect of the other constituent instruments and vice versa. For
example, a takeover relating to OUE H-Trust would need to apply to all components of the Stapled
Securities.
In addition, so long as the OUE H-REIT Units and OUE H-BT Units are stapled together, in relation
to:
Co-operation The Managers must co-operate with each other to ensure that each entity
complies with its obligations under the Stapling Deed, the OUE H-REIT Trust Deed or, as the
case may be, the OUE H-BT Trust Deed, the Companies Act, the SFA, the BTA, the Listing
Manual, the Property Funds Appendix, the Hotels Act and any other legislation and
regulations that may be relevant, as applicable;
Administration OUE H-REIT and OUE H-BT must co-operate with each other to carry out
all the activities necessary for the administration of OUE H-Trust such as developing and
maintaining investor relations, including but not limited to customer service to investors,
register analysis, information coordination and distribution, coordination of investor and
analyst briefing and marketing, coordination of media releases and SGX-ST announcements
(if applicable); corporate branding; and liaising with and responding to queries from the
public in relation to OUE H-Trust;
Issue price The Managers must agree from time to time the proportion of the issue price,
the repurchase price or buy-back price of a Stapled Security which is to represent the issue
price, the repurchase price or the buy-back price of each unit comprising the Stapled
Security. The allocation of this amount is to be determined by agreement between the
Managers before the issue, redemption or buy-back of the Stapled Security;
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Options An offering or issue of options over the Stapled Securities may only take place if
it is part of a concurrent offering or issue of options in OUE H-REIT Units and OUE H-BT
Units. An option may only be exercised if, at the same time as OUE H-REIT Units are
acquired under one option, the same person exercises an option over an identical number of
units in OUE H-BT and vice versa, if at the same time as OUE H-BT Units are acquired under
one option, the same person exercises an option over an identical number of units in OUE
H-REIT;
Meetings The Directors or other representatives of the Managers may attend and speak
at any meeting of the holders of OUE H-REIT Units and any meeting of the holders of OUE
H-BT Units or invite any other person to attend and speak. If permitted by the Companies Act,
any meeting of the holders of OUE H-REIT Units and any meeting of the holders of OUE
H-BT Units may be held with and as part of a joint meeting of the holders of each entity. At
any such joint meeting, on a show of hands, each Stapled Securityholder has one vote, and
on a poll, each Stapled Securityholder has one vote per Stapled Security;
Joint expenses All fees, costs, charges and expenses properly and reasonably incurred
by the REIT Manager, the REIT Trustee and the Trustee-Manager in the carrying out of their
duties under the Stapling Deed shall be paid in accordance with any agreement between the
REIT Manager, the REIT Trustee and the Trustee-Manager. If the REIT Manager, the REIT
Trustee and the Trustee-Manager are unable to reach agreement, the expenses will be borne
equally between OUE H-REIT and OUE H-BT;
Interests of Stapled Securityholders So long as OUE H-REIT Units remain stapled to
OUE H-BT Units, in exercising any power or discretion, (i) the REIT Manager, the REIT
Trustee and the Trustee-Manager may have regard to the interests of Stapled
Securityholders as a whole and not only to the interests of the holders of OUE H-REIT Units
or holders of OUE H-BT Units separately; (ii) the REIT Manager shall exercise all due
diligence and vigilance to safeguard the rights and interests of Stapled Securityholders
whose rights and interests shall prevail in the event of a conflict of interests between the
REIT Manager and the shareholder(s) of the REIT Manager collectively, and Stapled
Securityholders; and (iii) the Trustee-Manager shall exercise all due diligence and vigilance
to safeguard the rights and interests of Stapled Securityholders whose rights and interests
shall prevail in the event of a conflict of interests between the Trustee-Manager and the
shareholder(s) of the Trustee-Manager collectively, and Stapled Securityholders; and
Allocation of funds The Managers have the flexibility to allocate funds between OUE
H-REIT and OUE H-BT.
Subject to the Companies Act, the SFA, the BTA, the Listing Manual, the CIS Code (including the
Property Funds Appendix) and any other relevant legislation or regulations, OUE H-REIT and OUE
H-BT may agree to cause the stapling of any further security to the Stapled Securities. Any such
attached securities may be governed by the laws of a jurisdiction other than Singapore, and in
the case of units in a trust constituted outside Singapore, subject to the grant by the MAS (at its
discretion) of the relevant exemption under Singapore law if and when such stapling occurs. For
the purposes of any such stapling, OUE H-REIT and OUE H-BT may make an in-specie
distribution of securities to Stapled Securityholders.
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Unstapling
From 10 July 2013, all Stapled Securities will remain stapled for so long as the Stapled Securities
remain in issue, unless otherwise determined by (a) Extraordinary Resolutions passed by the
holders of OUE H-REIT Units and the holders of OUE H-BT Units respectively; or (b) if stapling
becomes unlawful or prohibited by the relevant laws, regulations and guidelines; or (c) if either
OUE H-REIT or, as the case may be, OUE H-BT is terminated or (as the case may be) wound up.
On and from the occurrence of an abovementioned Unstapling event, the Managers must procure
that OUE H-REIT Units and OUE H-BT Units are unstapled. The Stapling Deed will cease to be
of effect from that point in time except in relation to certain on-going obligations stated in the
Stapling Deed.
If, as a consequence of Unstapling, the OUE H-REIT Units and the OUE H-BT Units are no longer
stapled, the Managers must promptly:
repay any outstanding amount (including any interest thereon) under any loan given to it by
the other stapling entity prior to Unstapling, unless the other party agrees otherwise;
pay any outstanding amounts (including any interests thereon) which the REIT Manager or
the Trustee-Manager has agreed is its responsibility to repay (unless the Managers
otherwise agree); and
obtain a release of the other party from any guarantee or other security given by that party
to any person in respect of any liability of that party.
Issue of the Stapled Securities
The following is a summary of the provisions of the Deeds relating to the issue of Stapled
Securities, on the assumption that the OUE H-REIT Units will remain stapled to the OUE H-BT
Units.
The Managers have the joint exclusive right to issue Stapled Securities. The provisions of the
Deeds provide that for so long as OUE H-Trust is listed on the SGX-ST or such other stock
exchange of repute in any part of the world (Recognised Stock Exchange) and OUE H-REIT
Units remain stapled to OUE H-BT Units, the Managers may, in accordance with the Deeds and
such laws, rules and regulations as may be applicable (including the provisions of the Listing
Manual), issue further Stapled Securities on any Business Day at an issue price per Stapled
Security equal to the market price, without prior approval of the holders of OUE H-REIT Units
and OUE H-BT Units. However, Stapled Securityholders should note that the right of the
Managers to issue Stapled Securities is subject to the following:
(a) pursuant to the Listing Rules and Section 36 of the BTA (in the case of OUE H-BT), Stapled
Securityholders must give prior approval to the Managers (whether by way of a general
mandate or by way of a specific approval) by Ordinary Resolution in general meetings of the
holders of OUE H-REIT Units and general meetings of the holders of OUE H-BT Units before
the Managers can jointly issue additional Stapled Securities;
(b) pursuant to the Listing Rules, the scope of the general mandate to be given in a general
meeting of the holders of OUE H-REIT Units is limited to the issue of an aggregate number
of additional OUE H-REIT Units which must not exceed 50.0% of the total number of OUE
H-REIT Units in issue, of which the aggregate number of additional OUE H-REIT Units to be
issued other than on a pro rata basis to the existing holders of OUE H-REIT Units must not
exceed 20.0% of the total number of OUE H-REIT Units in issue (the OUE H-REIT Unit
Issue Mandate);
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(c) similarly, pursuant to the Listing Rules, the scope of the general mandate to be given in a
general meeting of the holders of OUE H-BT Units is limited to the issue of an aggregate
number of additional OUE H-BT Units which must not exceed 50.0% of the total number of
OUE H-BT Units in issue, of which the aggregate number of additional OUE H-BT Units to
be issued other than on a pro rata basis to the existing holders of OUE H-BT Units must not
exceed 20.0% of the total number of OUE H-BT Units in issue (the OUE H-BT Unit Issue
Mandate); and
(d) pursuant to Rule 805 of the Listing Manual, the REIT Manager may not issue any new OUE
H-REIT Units without the prior approval of the holders of OUE H-REIT Units in a general
meeting, unless a general mandate for the issuance of new OUE H-REIT Units is obtained
from the holders of OUE H-REIT Units and is still in force, subject to the limits specified in
the Listing Rules. Similarly, pursuant to Section 36 of the BTA relating to the issue of new
units in a business trust, the Trustee-Manager may not issue any new OUE H-BT Units
without the prior approval of the holders of OUE H-BT Units in a general meeting, unless a
general mandate for the issuance of new OUE H-BT units is obtained from the holders of
OUE H-BT Units and is still in force.
For the purposes of the paragraph above, market price shall mean (i) (subject to (ii) below) the
volume weighted average price per Stapled Security (if applicable, of the same class) for all trades
on the SGX-ST, or such other Recognised Stock Exchange on which OUE H-Trust is listed, in the
ordinary course of trading, for the period of 10 Business Days (or such other period as prescribed
by the SGX-ST or relevant Recognised Stock Exchange) immediately preceding the relevant
Business Day or, (ii) where the Managers believe that such market price is not a fair reflection of
the market price of a Stapled Security (which may include, among others, instances where the
trades on the Stapled Securities are very low or where there is disorderly trading activity in the
Stapled Securities), such amount as determined between the REIT Manager, the Trustee-
Manager and the REIT Trustee (after consultation with a stockbroker approved by the REIT
Trustee), as being the fair market price of a Stapled Security and this will be announced on the
SGXNET for so long as the OUE H-Trust is listed on the SGX-ST.
The Managers shall comply with the Listing Rules or the listing rules of such relevant Recognised
Stock Exchange in determining the issue price, including the issue price for a rights issue on a
pro-rata basis to all existing Stapled Securityholders, the issue price of a Stapled Security issued
other than by way of a rights issue offered on a pro-rata basis to all existing Stapled
Securityholders, the issue price for any reinvestment of distribution arrangement, the issue price
of any Stapled Securities which are issued as full or partial consideration of an Authorised
Investment by OUE H-REIT or OUE H-BT and the issue price for a conversion of instruments
which may be convertible into Stapled Securities.
Where the Stapled Securities are issued as full or partial consideration for the acquisition of an
Authorised Investment in conjunction with an issue of Stapled Securities to raise cash for the
balance of the consideration for the said investment (or part thereof) or for acquiring other
investments in conjunction with the said investment, the Managers shall have the discretion to
determine that the issue price of the Stapled Securities so issued as consideration shall be the
same as the issue price for the Stapled Securities issued in conjunction with an issue of Stapled
Securities to raise cash for the aforesaid purposes.
If in connection with an issue of a Stapled Security, any requisite payment of the issue price for
such Stapled Security has not been received by the REIT Trustee and the Trustee-Manager before
the seventh Business Day after the Stapled Security was agreed to be issued (or such other date
as the Managers may agree), the Managers may cancel its agreement to issue such Stapled
Security by giving notice to that effect and such Stapled Security will be deemed never to have
been issued or agreed to be issued. In such an event, the Managers:
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shall be entitled to charge the investor (and retain the same for their own account) a
cancellation fee of such amount as the Managers may from time to time determine to
represent the administrative costs involved in processing the application for such Stapled
Security from such applicant; and
may, but shall not be bound to, require the applicant to pay to the Managers for the account
of OUE H-Trust in respect of each Stapled Security so cancelled an amount (if any) by which
the issue price of such Stapled Security exceeds the repurchase price applying if such
Stapled Security was requested to have been repurchased or redeemed on the same day.
Stapled Security Issue Mandate
As at the date of this Prospectus, OUE is the sole Stapled Securityholder. OUE has approved, and
investors by subscribing for the Stapled Securities pursuant to or in connection with the Offering
are deemed to have approved, (A) the issuance of the Stapled Securities pursuant to or in
connection with the Offering, the Sponsor Stapled Securities and the Cornerstone Stapled
Securities and (B) deemed to have given the authority (the Stapled Security Issue Mandate)
to the Managers to:
(i) (a) issue Stapled Securities whether by way of rights, bonus or otherwise; and/or
(b) make or grant offers, agreements or options (collectively, Instruments) that might or
would require Stapled Securities to be issued, including but not limited to the creation
and issue of (as well as adjustments to) securities, warrants, debentures or other
instruments convertible into Stapled Securities,
at any time and upon such terms and conditions and for such purposes and to such persons
as the Managers may in their absolute discretion deem fit; and
(ii) issue Stapled Securities in pursuance of any Instrument made or granted by the Managers
while the Stapled Security Issue Mandate was in force (notwithstanding that the authority
conferred by the Stapled Security Issue Mandate may have ceased to be in force at the time
such Stapled Securities are issued),
provided that:
(A) the aggregate number of Stapled Securities to be issued pursuant to the Stapled Security
Issue Mandate (including Stapled Securities to be issued in pursuance of Instruments made
or granted pursuant to the Stapled Security Issue Mandate) shall not exceed 50.0% of the
total number of issued Stapled Securities (excluding treasury Stapled Securities, if any) (as
calculated in accordance with sub-paragraph (B) below), of which the aggregate number of
Stapled Securities to be issued other than on a pro rata basis to Stapled Securityholders
shall not exceed 20.0% of the total number of issued Stapled Securities (excluding treasury
Stapled Securities, if any) (as calculated in accordance with sub-paragraph (B) below);
(B) subject to such manner of calculation as may be prescribed by the SGX-ST for the purpose
of determining the aggregate number of Stapled Securities that may be issued under
sub-paragraph (A) above, the total number of issued Stapled Securities (excluding treasury
Stapled Securities, if any) shall be based on the number of issued Stapled Securities
(excluding treasury Stapled Securities, if any) after completion of the Offering, after adjusting
for any subsequent bonus issue, consolidation or subdivision of Stapled Securities;
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(C) in exercising the Stapled Security Issue Mandate, the Managers shall comply with the
provisions of the Listing Manual for the time being in force (unless such compliance has been
waived by the SGX-ST), the OUE H-REIT Trust Deed and the OUE H-BT Trust Deed for the
time being in force (unless otherwise exempted or waived by the MAS);
(D) unless revoked or varied by Stapled Securityholders in a general meeting, the authority
conferred by the Stapled Security Issue Mandate shall continue in force until (i) the
conclusion of the first annual general meeting of OUE H-Trust or (ii) the date by which the
first annual general meeting of OUE H-Trust is required by applicable regulations to be held,
whichever is earlier;
(E) where the terms of the issue of the Instruments provide for adjustment to the number of
Instruments or Stapled Securities into which the Instruments may be converted, in the event
of rights, bonus or other capitalisation issues or any other events, the Managers are
authorised to issue additional Instruments or Stapled Securities pursuant to such adjustment
notwithstanding that the authority conferred by the Stapled Security Issue Mandate may
have ceased to be in force at the time the Instruments or Stapled Securities are issued; and
(F) the Managers and the REIT Trustee be and are hereby severally authorised to complete and
do all such acts and things (including executing all such other documents as may be
required) as the Managers or, as the case may be, the REIT Trustee, may consider expedient
or necessary or in the interest of OUE H-Trust to give effect to the authority conferred by the
Stapled Security Issue Mandate.
Unless revoked or varied by Stapled Securityholders in a general meeting, such authority shall
continue in full force until the conclusion of the first annual general meeting of OUE H-Trust or the
date by which the first annual general meeting is required by law to be held, whichever is the
earlier.
OUE H-REITs and OUE H-BTs first financial year will be from 10 July 2013, the date of
constitution as a REIT and a business trust respectively, to 31 December 2013. Accordingly, OUE
H-REIT and OUE H-BT will hold their first annual general meeting by 30 April 2014, which is within
18 months from the date of constitution of OUE H-REIT and the date of registration of OUE H-BT.
The Stapled Security Issue Mandate will be in force until that date or such earlier date on which
the first annual general meeting is held.
Suspension of Issue of the Stapled Securities
The REIT Manager, the REIT Trustee or the Trustee-Manager may, with the prior approval of the
others, and subject to the Listing Manual (while OUE H-Trust is listed on the SGX-ST) or the listing
rules of any other Recognised Stock Exchange (where the Stapled Securities are listed on such
other Recognised Stock Exchange), suspend the issue of the Stapled Securities during any of the
following events:
any period when the SGX-ST or any other relevant Recognised Stock Exchange is closed
(otherwise than for public holidays) or during which dealings are restricted or suspended;
the existence of any state of affairs which, in the opinion of the REIT Manager, the REIT
Trustee or as the case may be, the Trustee-Manager, might seriously prejudice the interests
of Stapled Securityholders as a whole, the OUE H-REIT Deposited Property or, as the case
may be, the OUE H-BT Trust Property;
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any breakdown in the means of communication normally employed in determining the price
of any investments of OUE H-Trust or (if relevant) the current price thereof on the SGX-ST
or any other relevant Recognised Stock Exchange, or when for any reason the prices of any
assets of OUE H-Trust cannot be promptly and accurately ascertained;
any period when remittance of money which will or may be involved in the realisation of any
investments of OUE H-Trust or (if relevant) in the payment for such asset of OUE H-Trust
cannot, in the opinion of the REIT Manager, the Trustee-Manager or, as the case may be, the
REIT Trustee, be carried out at normal rates of exchange;
any period where the issuance of the Stapled Securities is suspended pursuant to any order
or direction issued by the MAS or other relevant regulatory authorities;
in relation to any general meeting of the holders of OUE H-REIT Units or the holders of OUE
H-BT Units, any 48-hour period before such general meeting or any adjournment thereof; or
when the business operations of the REIT Manager, the REIT Trustee or the Trustee-
Manager in relation to OUE H-REIT or, as the case may be, OUE H-BT are substantially
interrupted or closed as a result of, or arising from, nationalisation, expropriation, currency
restrictions, pestilence, acts of war, terrorism, insurrection, revolution, civil unrest, riots,
strikes, nuclear fusion or fission or acts of God.
Such suspension shall take effect forthwith upon the declaration in writing thereof by the REIT
Manager, the Trustee-Manager or, as the case may be, the REIT Trustee and shall terminate on
the day following the first Business Day on which the condition giving rise to the suspension
ceases to exist and no other conditions under which suspension is authorised (as set out above)
exists, upon the declaration in writing thereof by the REIT Manager, the REIT Trustee or, as the
case may be, the Trustee-Manager.
In the event of any suspension while OUE H-Trust is listed on the SGX-ST and/or any other
Recognised Stock Exchange(s), the Managers shall ensure that immediate announcement of
such suspension is made through the SGX-ST or the relevant Recognised Stock Exchange.
Redemption of the Stapled Securities
When OUE H-Trust is listed on the SGX-ST and/or any other Recognised Stock Exchange
The Managers are not obliged to repurchase or cause the redemption of Stapled Securities so
long as OUE H-Trust is listed on the SGX-ST and/or any other Recognised Stock Exchange. It is
intended that Stapled Securityholders may only deal in their listed Stapled Securities through
trading on the SGX-ST. However, under the Stapling Deed, the Managers must consult and agree
with each other on the terms for the repurchase and/or redemption of the Stapled Securities prior
to taking any action. In the event the Managers decide to repurchase and/or cause the redemption
of the Stapled Securities, such repurchase and/or redemption must be carried out in accordance
with the OUE H-REIT Trust Deed and the OUE H-BT Trust Deed, subject to compliance with the
relevant laws, regulations and guidelines and the listing rules of the SGX-ST and/or the listing
rules of any other relevant Recognised Stock Exchange and applicable laws, regulations and
guidelines.
The Managers may also, subject to all applicable laws, regulations and guidelines, the listing rules
of the SGX-ST and/or any other Recognised Stock Exchange, suspend the repurchase or
redemption of the Stapled Securities for any period when the issue of the Stapled Securities is
suspended pursuant to the terms and conditions of the Stapling Deed.
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and Structure of OUE H-Trust Suspension of Issue of the Stapled Securities for further details.)
When OUE H-Trust is Unlisted
When OUE H-Trust is Unlisted, the Managers may but are not obliged to repurchase or cause the
redemption of Stapled Securities more than once a year in accordance with the Deeds, the rules
of the Listing Manual and/or the listing rules of such Recognised Stock Exchange and all other
applicable laws, regulations and guidelines and a Stapled Securityholder has no right to request
for the repurchase or redemption of Stapled Securities more than once a year. Unlisted in this
context means not being included on, or having been delisted from, the Official List of the SGX-ST
or, as the case may be, any other Recognised Stock Exchange, and in relation to the Stapled
Securities, means having been suspended for more than 60 consecutive calendar days from being
listed, quoted or traded on the SGX-ST or, as the case may be, any other Recognised Stock
Exchange.
Relevant Legislation Applicable to OUE H-Trust
OUE H-REIT is principally a Singapore-based hospitality and hospitality-related asset REIT
constituted by the OUE H-REIT Trust Deed and is principally regulated by the SFA, the CIS Code,
other relevant legislation and regulations as well as the OUE H-REIT Trust Deed.
OUE H-BT is a business trust constituted by the OUE H-BT Trust Deed and is principally regulated
by the BTA, the SFA, other relevant legislation and regulations as well as the OUE H-BT Trust
Deed.
The Take-Over Code
Stapled Securityholders must closely adhere to the Take-Over Code in respect of any acquisitions
or investments as REITs and business trusts are subject to the Take-Over Code.
Under the Take-Over Code, any person acquiring an interest, either individually or with parties
acting in concert, in 30.0% or more of the Stapled Securities may be required to extend a takeover
offer for the remaining Stapled Securities in accordance with the Take-Over Code. A mandatory
takeover offer is also required to be made if a person holding between 30.0% and 50.0% both
inclusive of the Stapled Securities, either individually or in concert, acquires an additional 1.0% or
more of the Stapled Securities in any six-month period under the Take-Over Code.
THE FORMATION AND STRUCTURE OF OUE H-REIT
OUE H-REIT was constituted as a REIT on 10 July 2013 by a declaration of trust made between
the REIT Trustee and the REIT Manager, and is principally regulated by the SFA and the CIS Code
(including the Property Funds Appendix). OUE H-REIT was authorised as a collective investment
scheme by the Authority on 18 July 2013.
The terms and conditions of the OUE H-REIT Trust Deed shall be binding on each holder of OUE
H-REIT Units (and persons claiming through such holder of OUE H-REIT Units) as if such holder
of OUE H-REIT Units had been a party to the OUE H-REIT Trust Deed and as if the OUE H-REIT
Trust Deed contains covenants by such holder of OUE H-REIT Units to do all such acts and things
as the OUE H-REIT Trust Deed may require the REIT Manager and/or the REIT Trustee to do.
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Operational Structure
OUE H-REIT is constituted to invest in real estate and real estate-related assets and the REIT
Manager must manage OUE H-REIT so that the principal investments of OUE H-REIT are real
estate and real estate-related assets (including ownership of companies or other legal entities
whose primary purpose is to hold or own real estate or real estate-related assets). OUE H-REIT
is a Singapore-based REIT established with the principal investment strategy of investing, directly
or indirectly, in a portfolio of income-producing real estate which is used primarily for hospitality
assets.
OUE H-REIT aims to generate returns for the holders of OUE H-REIT Units by owning, buying and
managing such properties in line with its investment strategy (including selling any property that
has reached a stage that offers only limited scope for growth).
Subject to the restrictions and requirements in the CIS Code (including the Property Funds
Appendix) and the Listing Manual, the REIT Manager is also authorised under the OUE H-REIT
Trust Deed to invest in investments other than real estate. Although the REIT Manager may use
certain financial derivative instruments to the extent permitted by such laws, rules and regulations
as may be applicable including, but not limited, to the CIS Code (including the Property Funds
Appendix) and the Listing Manual, the REIT Manager presently does not have any intention for
OUE H-REIT to invest in options, warrants, commodities, futures contracts and precious metals.
The OUE H-REIT Trust Deed
While the OUE H-REIT Units remain stapled to the OUE H-BT Units, the terms and conditions of
the OUE H-REIT Trust Deed shall be binding on each Stapled Securityholder (and persons
claiming through such Stapled Securityholders) as if such Stapled Securityholder had been a
party to the OUE H-REIT Trust Deed and as if the OUE H-REIT Trust Deed contains covenants
by such Stapled Securityholder to observe and be bound by the provisions of the OUE H-REIT
Trust Deed and an authorisation by each Stapled Securityholder to do all such acts and things as
the OUE H-REIT Trust Deed may require the REIT Manager and/or the REIT Trustee to do.
The provisions of the SFA and the CIS Code (including the Property Funds Appendix) prescribe
certain terms of the OUE H-REIT Trust Deed and certain rights, duties and obligations of the REIT
Manager, the REIT Trustee and (while OUE H-REIT Units remain stapled to OUE H-BT Units)
Stapled Securityholders under the OUE H-REIT Trust Deed. The Property Funds Appendix also
imposes certain restrictions on REITs in Singapore, including a restriction on the types of
investments which REITs in Singapore may hold, a general limit on their level of borrowings and
certain restrictions with respect to Interested Party Transactions. To the extent of any
inconsistency between the obligations of the REIT Manager under the OUE H-REIT Trust Deed
and the Stapling Deed, the provisions of the Stapling Deed will prevail.
The OUE H-REIT Units and the holders of OUE H-REIT Units
The rights and interests of the holders of OUE H-REIT Units are contained in the OUE H-REIT
Trust Deed. Under the OUE H-REIT Trust Deed, these rights and interests are safeguarded by the
REIT Trustee.
Each OUE H-REIT Unit represents an undivided interest in OUE H-REIT. Holders of OUE H-REIT
Units have no equitable or proprietary interest in the OUE H-REIT Deposited Property and are not
entitled to the transfer to them of the OUE H-REIT Deposited Property (or any part thereof) or of
any estate or interest in the OUE H-REIT Deposited Property (or any part thereof). The rights of
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holders of OUE H-REIT Units under the OUE H-REIT Trust Deed are limited to the right to require
due administration of OUE H-REIT in accordance with the provisions of the OUE H-REIT Trust
Deed, including, without limitation, by suit against the REIT Trustee or the REIT Manager.
Under the OUE H-REIT Trust Deed, each holder of OUE H-REIT Units acknowledges and agrees
that it will not commence or pursue any action against the REIT Trustee or the REIT Manager
seeking an order for specific performance or for injunctive relief in respect of the OUE H-REIT
Deposited Property (or any part thereof), including all its Authorised Investments, and waives any
rights it may otherwise have to such relief. If the REIT Trustee or the REIT Manager breaches or
threatens to breach its duties or obligations to the holders of OUE H-REIT Units under the OUE
H-REIT Trust Deed, the holders of OUE H-REIT Units have recourse against the REIT Trustee or
the REIT Manager but this is limited to a right to recover damages or compensation from the REIT
Trustee or the REIT Manager in a court of competent jurisdiction, and the holder of OUE H-REIT
Units acknowledges and agrees that damages or compensation is an adequate remedy for such
breach or threatened breach.
Further, unless otherwise expressly provided in the OUE H-REIT Trust Deed, a holder of OUE
H-REIT Units may not interfere or seek to interfere with the rights, powers, authority or discretion
of the REIT Manager or the REIT Trustee, exercise any right in respect of the OUE H-REIT
Deposited Property (or any part thereof) or lodge any caveat or other notice affecting the OUE
H-REIT Deposited Property or any of the OUE H-REIT Deposited Property, or require that any of
the OUE H-REIT Deposited Property be transferred to such holders of OUE H-REIT Units.
No certificate shall be issued to a holder of the OUE H-REIT Units by either the REIT Manager or
the REIT Trustee in respect of OUE H-REIT Units issued to the holders of OUE H-REIT Units. For
so long as OUE H-Trust is listed, quoted and traded on the SGX-ST, the REIT Manager and the
REIT Trustee shall, appoint CDP as the unit depository for OUE H-REIT in respect of all scripless
OUE H-REIT Units in accordance with CDPs depository services terms and conditions
(Depository Services Terms and Conditions) relating to the deposit of OUE H-REIT Units in
CDP. Stapled Securities, and all OUE H-REIT Units issued as part of the Stapled Securities will
be represented by entries in both the register of the holders of OUE H-REIT Units kept by the REIT
Trustee or the agent appointed by the REIT Trustee and the register of Stapled Securityholders
jointly kept by the REIT Trustee and the Trustee-Manager or their agents in the name of, and
deposited with, CDP as the registered holder of such Stapled Securities.
The Managers or their jointly appointed agent shall issue to CDP not more than 10 Business Days
after the issue of Stapled Securities a confirmation note confirming the date of issue and the
number of Stapled Securities so issued and, if applicable, also stating that Stapled Securities are
issued under a moratorium and the expiry date of such moratorium and for the purposes of the
OUE H-REIT Trust Deed and the Stapling Deed, such confirmation note shall be deemed to be a
certificate evidencing title to the OUE H-REIT Units and the corresponding Stapled Securities
issued.
There are no restrictions under the Stapling Deed, the OUE H-REIT Trust Deed, the OUE H-BT
Trust Deed or Singapore law on a persons right to purchase (or subscribe for) OUE H-REIT Units
and to own the OUE H-REIT Units except in the case of a rights issue or, as the case may be, any
preferential offering, where the REIT Manager has the right under the OUE H-REIT Trust Deed to
elect not to extend an offer of OUE H-REIT Units under the rights issue or, as the case may be,
any preferential offering to holders of OUE H-REIT Units whose addresses are outside Singapore.
The Take-Over Code applies to REITs. As a result, acquisitions of Stapled Securities which may
result in a change in effective control of OUE H-Trust and the aggregate Stapled Securityholdings
of an entity and its concert parties crossing certain thresholds may be subject to the provisions of
the Take-Over Code, such as a requirement to make a mandatory offer for Stapled Securities.
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Changes in Equity of the Holders of OUE H-REIT Units
The REIT Manager may at any time with the approval of the REIT Trustee and on prior written
notice (i) given to each holder of OUE H-REIT Unit, or (ii) (when OUE H-REIT is listed, quoted and
traded on the SGX-ST) by the REIT Manager delivering such notice in writing to CDP for onward
delivery to the Depositors, determine that each OUE H-REIT Unit shall be sub-divided into two or
more OUE H-REIT Units or consolidated with one or more other OUE H-REIT Units and the
holders of OUE H-REIT Units shall be bound accordingly. While Stapling applies, OUE H-REIT
Units may not be sub-divided or consolidated unless the corresponding OUE H-BT Units are
sub-divided or, as the case may be, consolidated at the same time and to the same extent.
The Register shall be altered accordingly to reflect the new number of OUE H-REIT Units held by
each holder of OUE H-REIT Units as a result of such sub-division or consolidation and the REIT
Manager shall cause CDP to alter the depository register accordingly in respect of the securities
account of each relevant holder of OUE H-REIT Unit to reflect the new number of OUE H-REIT
Units held by such holder of OUE H-REIT Unit as a result of such sub-division or consolidation.
Rights, Preferences and Restrictions Attaching to Each Class of OUE H-REIT Units
The OUE H-REIT Trust Deed provides that rights attached to the OUE H-REIT Units issued with
special conditions have to be clearly defined in the OUE H-REIT Trust Deed and, if at any time,
different classes of OUE H-REIT Units are issued, the rights attached to any class (unless
otherwise provided by the terms of issue of the OUE H-REIT Units of that class) may, subject to
the provisions of any applicable laws, regulations and guidelines, be varied or abrogated with the
sanction of an Extraordinary Resolution passed at a separate meeting of the holders of OUE
H-REIT Units of that class.
Currently, there is only one class of OUE H-REIT Units and every OUE H-REIT Unit carries the
same voting rights. For so long as OUE H-REIT is listed, CDP shall be the registered holder of all
the OUE H-REIT Units in issue and CDP shall be the registered holder of all the OUE H-REIT Units
in issue and CDP shall pursuant to the Depository Services Terms and Conditions maintain a
record in a depository register of the holders of OUE H-REIT Units having OUE H-REIT Units
credited into their respective Securities Accounts and to record in the depository register the
following information stated below in relation to each namely:
the names and addresses of the holders of OUE H-REIT Units;
the class of OUE H-REIT Units held by each holder of OUE H-REIT Units;
the number of OUE H-REIT Units held by each holder of OUE H-REIT Units;
the date on which every such person entered in respect of the OUE H-REIT Units standing
in his name became a holder of OUE H-REIT Units and, where he became a holder of OUE
H-REIT Units by virtue of an instrument of transfer, a sufficient reference to enable the name
and address of the transferor to be identified;
the date on which any transfer is registered and the name and address of the transferee; and
where applicable, the day on which the holder of OUE H-REIT Units ceased to be a holder
of OUE H-REIT Units.
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Each holder of OUE H-REIT Units named in the depository register shall for such period as the
OUE H-REIT Units are entered against his name in the depository register, be deemed to be the
owner in respect of the number of OUE H-REIT Units entered against the name of such holder of
OUE H-REIT Units in the depository register and the REIT Manager shall be entitled to rely on any
and all such information in the depository register.
The entries in the depository register shall (save in the case of manifest error) be conclusive
evidence of the number of OUE H-REIT Units held by each holder of OUE H-REIT Units and, in
the event of any discrepancy between the entries in the depository register and the details
appearing in any confirmation note or monthly statement issued by CDP, the entries in the
depository register shall prevail unless the holder of OUE H-REIT Units proves to the satisfaction
of the REIT Manager and CDP that the depository register is incorrect.
Distributions
Subject to the OUE H-REIT Trust Deed and all applicable laws, regulations and guidelines, the
REIT Manager shall have the right to make regular distributions of all (or such lower percentage
as the REIT Manager may determine) (i) net tax-exempt income, after adjusting for cash expenses
to holders of OUE H-REIT Units at quarterly or such other intervals as the REIT Manager shall
decide in its absolute discretion, and (ii) net Taxable Income (excluding gains from sale of
Authorised Investments) at such time as the REIT Manager may in its absolute discretion deem
fit. All distributions are paid pro rata among the holders of OUE H-REIT Units in proportion to the
amount paid-up on each of their OUE H-REIT Units, unless the rights attached to an issue of any
OUE H-REIT Unit provide otherwise. Any monies payable to holders of OUE H-REIT Units which
remain unclaimed after a period of 12 months shall be accumulated in a special account (the
Unclaimed Monies Account) from which the REIT Trustee may, from time to time, make
payments to holders of OUE H-REIT Units claiming any such monies. Subject to the winding-up
provisions in the OUE H-REIT Trust Deed, the REIT Trustee shall cause such sums which
represent monies remaining in the Unclaimed Monies Account for five years after the date of
payment of such monies into the Unclaimed Monies Account and interest, if any, earned thereon,
to be paid into the courts of Singapore and any fees, costs and expenses incurred in relation to
such payment into the courts of Singapore shall be deducted from the monies payable to the
relevant holder of OUE H-REIT Units.
1
If the said monies are insufficient to meet all such fees,
costs and expenses, the REIT Trustee shall be entitled to have recourse to the OUE H-REIT
Deposited Property for such payment. Where the OUE H-REIT is listed and to the extent that such
unclaimed monies are held by the CDP, subject to the winding-up provisions in the OUE H-REIT
Trust Deed, the REIT Trustee shall cause such sums which are returned by the CDP to the REIT
Trustee (and which have remained unclaimed by a Holder for a period of six years after the time
when such monies became payable to such holder of OUE H-REIT Units) to be paid into the courts
of Singapore and any fees, costs and expenses incurred in relation to such payment into the
courts of Singapore shall be deducted from the monies payable to the relevant holder of OUE
H-REIT Units PROVIDED THAT if the said monies are insufficient to meet the payment of all such
fees, costs and expenses, the REIT Trustee shall be entitled to have recourse to the OUE H-REIT
Deposited Property for such payment.
1 The Trustees Act, Chapter 337 of Singapore (the Trustees Act) allows a trustee to discharge its liabilities towards
unclaimed monies by paying such monies into Singapore courts, although it does not prescribe the period for which
the monies must be unclaimed before they may be paid into the courts.
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Voting Rights
A holder of OUE H-REIT Units is entitled to attend, speak and vote at any general meeting of the
holders of OUE H-REIT Units in person or by proxy and a holder of OUE H-REIT Units may appoint
not more than two proxies to attend and vote at the same general meeting as a holder of OUE
H-REIT Units if his name appears on the depository register as at 48 hours before the time of the
relevant general meeting as certified by the depository to OUE H-REIT. Except as otherwise
provided in the OUE H-REIT Trust Deed, not less than two holders of OUE H-REIT Units must be
present in person or by proxy, holding or representing at least one-tenth in value of all the OUE
H-REIT Units for the time being in issue to constitute a quorum at any general meeting. Under the
OUE H-REIT Trust Deed, on a show of hands every holder of OUE H-REIT Units present in person
or by proxy shall have one vote, and on a poll, every holder of OUE H-REIT Units who is present
in person or by proxy shall have one vote for every OUE H-REIT Unit which he holds or
represents. Subject to the requirements of the prevailing listing rules of the SGX-ST, voting at a
meeting shall be by a show of hands unless a poll is demanded by the chairman of the general
meeting or by five or more holders of OUE H-REIT Units (including their proxies) having the right
to vote at the general meeting or by holders of OUE H-REIT Units (including their proxies)
representing not less than 10.0% of the total voting rights of all the holders of OUE H-REIT Units
having the right to vote at the general meeting.
Variation of Rights of Respective Classes of OUE H-REIT Units
If at any time different classes of OUE H-REIT Units are issued, the rights attached to any class
(unless otherwise provided by the terms of issue of the OUE H-REIT Units of that class) may,
subject to any applicable laws, regulations and guidelines, whether or not OUE H-REIT is being
wound up, be varied or abrogated with the sanction of an Extraordinary Resolution passed at a
separate meeting of the holders of OUE H-REIT Units of that class. To every such Extraordinary
Resolution of the holders of OUE H-REIT Units of that class, the provisions of the OUE H-REIT
Trust Deed relating to general meetings of the holders of OUE H-REIT Units shall apply mutatis
mutandis provided that the necessary quorum shall be two persons at least holding or
representing by proxy at least one-third of the issued OUE H-REIT Units of the class and that any
holders of OUE H-REIT Units of that class present in person or by proxy may demand a poll and
that every such holder shall on a poll have one vote for every Unit of the class held by him,
PROVIDED ALWAYS that where the necessary majority for such an Extraordinary Resolution is
not obtained at such meeting of the holders of OUE H-REIT Units, consent in writing if obtained
from the holders of three-quarters of the issued OUE H-REIT Units of the class concerned within
two months of such meeting of the holders of OUE H-REIT Units shall be as valid and effectual
as an Extraordinary Resolution at such meeting of the holders of OUE H-REIT Units.
The rights conferred upon the holders of OUE H-REIT Units of any class issued with preferred or
other rights shall, unless otherwise expressly provided by the terms of issue of the OUE H-REIT
Units of that class or by the OUE H-REIT Trust Deed as are in force at the time of such issue, be
deemed to be varied by the creation or issue of further OUE H-REIT Units ranking equally
therewith, and would therefore require the sanction of an Extraordinary Resolution passed at a
separate meeting of the holders of OUE H-REIT Units of such class.
The OUE H-REIT Trust Deed does not impose more stringent conditions than those required by
the applicable law.
Issue of OUE H-REIT Units
The REIT Manager has the right to issue OUE H-REIT Units for the account of OUE H-REIT. For
so long as OUE H-REIT is listed on the SGX-ST, the REIT Manager may, subject to the provisions
of the Listing Manual, the OUE H-REIT Trust Deed and any other applicable laws, regulations and
guidelines, issue OUE H-REIT Units.
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If in connection with an issue of a OUE H-REIT Unit, any requisite payment of the issue price for
such OUE H-REIT Unit has not been received by the REIT Trustee before the seventh Business
Day after the date on which the OUE H-REIT Unit was agreed to be issued (or such other date as
the REIT Manager and the REIT Trustee may agree), the REIT Manager may, in its absolute
discretion, cancel its agreement to issue such OUE H-REIT Unit and such OUE H-REIT Unit will
be deemed never to have been issued or agreed to be issued. In such an event, the REIT Manager
may, at its discretion, charge the investor (and retain the same for its own account) a cancellation
fee of such amount as the REIT Manager may from time to time determine to represent the
administrative costs involved in processing the application for such OUE H-REIT Unit.
Suspension of Issue of OUE H-REIT Units
The REIT Manager or the REIT Trustee may, with the prior written approval of the other and
subject to the Listing Manual suspend the issue of OUE H-REIT Units during any of the following
events:
the existence of any state of affairs which, in the opinion of the REIT Manager or, as the case
may be, the REIT Trustee, might seriously prejudice the interests of the holders of OUE
H-REIT Units as a whole or the OUE H-REIT Deposited Property;
of any assets of OUE H-REIT or the current price thereof on the SGX-ST or any other
relevant Recognised Stock Exchange, or when for any reason the prices of any assets of
OUE H-REIT cannot be promptly and accurately ascertained;
asset of OUE H-REIT or in the payment for such asset of OUE H-REIT cannot, in the opinion
of the REIT Manager, be carried out at normal rates of exchange;
any period where the issuance of OUE H-REIT Units is suspended pursuant to any order or
direction issued by the MAS or other relevant regulatory authorities;
in relation to any general meeting of holders of OUE H-REIT Units, any 48-hour period before
such general meeting or any adjournment thereof; or
when the business operations of the REIT Manager or the REIT Trustee in relation to OUE
H-REIT are substantially interrupted or closed as a result of, or arising from, nationalisation,
expropriation, currency restrictions, pestilence, acts of war, terrorism, insurrection,
revolution, civil unrest, riots, strikes, nuclear fusion or fission or acts of God.
Such suspension shall take effect forthwith upon the declaration in writing thereof by the REIT
Manager or, as the case may be, the REIT Trustee, and shall terminate on the day following the
first Business Day on which the condition giving rise to the suspension ceases to exist and no
other conditions under which suspension is authorised (as set out above) exists, upon the
declaration in writing thereof by the REIT Manager or, as the case may be, the REIT Trustee.
In the event of any suspension while OUE H-REIT is listed on the SGX-ST, the REIT Manager shall
ensure that immediate announcement of such suspension is made through the SGX-ST.
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Meeting of Holders of OUE H-REIT Units
Under applicable law and the provisions of the OUE H-REIT Trust Deed, OUE H-REIT will not hold
any meetings for holders of OUE H-REIT Units unless the REIT Manager or the REIT Trustee
convenes a meeting or unless not less than 50 holders of OUE H-REIT Units or the holders of OUE
H-REIT Units holding not less than 10.0% of issued OUE H-REIT Units (whichever is the lesser)
request a meeting to be convened.
A meeting of holders of OUE H-REIT Units when convened may:
by Extraordinary Resolution and in accordance with the OUE H-REIT Trust Deed, sanction
any modification, alteration or addition to the OUE H-REIT Trust Deed which shall be agreed
by the REIT Manager and the REIT Trustee as provided in the OUE H-REIT Trust Deed;
by Extraordinary Resolution and in accordance with the OUE H-REIT Trust Deed, sanction
a supplemental deed increasing the maximum permitted limit or any change in the structure
of fees payable to the REIT Manager and the REIT Trustee;
by Extraordinary Resolution and in accordance with the OUE H-REIT Trust Deed, remove the
auditors of OUE H-REIT and appoint other auditors in their place;
by Extraordinary Resolution and in accordance with the OUE H-REIT Trust Deed, delist OUE
H-REIT after it has been listed;
by Extraordinary Resolution and in accordance with the OUE H-REIT Trust Deed, issue OUE
H-REIT Units on an unpaid or partly paid basis;
by Extraordinary Resolution and in accordance with the OUE H-REIT Trust Deed, remove the
REIT Trustee; and
by Extraordinary Resolution and in accordance with the OUE H-REIT Trust Deed, direct the
REIT Trustee to take any action pursuant to Section 295 of the SFA.
A meeting of holders of OUE H-REIT Units may, also by Ordinary Resolution and in accordance
with the OUE H-REIT Trust Deed, remove the REIT Manager.
Any decision to be made by resolution of the holders of OUE H-REIT Units other than the above
shall be made by Ordinary Resolution, unless an Extraordinary Resolution is required by the SFA,
the CIS Code, the Listing Manual or any other applicable laws and regulations.
Except as otherwise provided for in the OUE H-REIT Trust Deed, 14 days notice at the least (not
inclusive of the day on which the notice is served or deemed to be served and of the day for which
the notice is given) of every meeting shall be given to the holders of OUE H-REIT Units in the
manner provided in the OUE H-REIT Trust Deed. The quorum at a meeting shall not be less than
two holders of OUE H-REIT Units present in person or by proxy together holding or representing
one-tenth in value of all OUE H-REIT Units for the time being in issue. Each notice shall specify
the place, day and hour of the meeting, and the terms of the resolutions to be proposed, and each
such notice may, in general, be given by advertisement in the daily press and in writing to each
stock exchange on which OUE H-REIT is listed.
Subject to the requirements of the prevailing listing rules by the SGX-ST, voting at a meeting shall
be by a show of hands unless a poll is demanded by the chairman of the meeting, or by five or
more holders of OUE H-REIT Units present in person or by proxy, or holding or representing at
least one-tenth in value of all OUE H-REIT Units represented at the meeting. Holders of OUE
H-REIT Units do not have different voting rights on account of the number of votes held by a
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particular holder of OUE H-REIT Units. On a show of hands, every holder of OUE H-REIT Units
has one vote. On a poll, every holder of OUE H-REIT Units has one vote for each OUE H-REIT
Unit of which it is the holder. The OUE H-REIT Trust Deed does not contain any limitation on
non-Singapore resident or foreign holders of OUE H-REIT Units holding OUE H-REIT Units or
exercising the voting rights with respect to their holdings of OUE H-REIT Units.
Neither the REIT Manager nor any of its associates shall be entitled to vote or be counted as part
of a quorum at a meeting convened to consider a matter in respect of which the REIT Manager
or any of its associates has a material interest save for an Ordinary Resolution duly proposed to
remove the REIT Manager, in which case, no holder of OUE H-REIT Units shall be
disenfranchised.
For so long as the REIT Manager is the manager of OUE H-REIT, the controlling shareholders (as
defined in the Listing Manual) of the REIT Manager and of any of its associates are prohibited from
voting or being counted as part of a quorum for any meeting of holders of OUE H-REIT Units
convened to consider a matter in respect of which the relevant controlling shareholders of the
REIT Manager and/or of any of its associates have a material interest.
Rights and Liabilities of the Holders of OUE H-REIT Units
The key rights of the holders of OUE H-REIT Units include rights to:
receive income and other distributions attributable to OUE H-REIT Units held;
receive audited financial statements and the annual reports of OUE H-REIT; and
participate in the termination of OUE H-REIT by receiving a share of all net cash proceeds
derived from the realisation of the assets of OUE H-REIT less any liabilities, in accordance
with their proportionate interests in OUE H-REIT.
No holder of OUE H-REIT Units has a right to require that any asset of OUE H-REIT be transferred
to him.
Further, the holders of OUE H-REIT Units cannot give any directions to the REIT Manager or the
REIT Trustee (whether at a meeting of holders of OUE H-REIT Units or otherwise) if it would
require the REIT Manager or the REIT Trustee to do or omit from doing anything which may result
in:
OUE H-REIT ceasing to comply with applicable laws and regulations; or
the exercise of any discretion expressly conferred on the REIT Manager or the REIT Trustee
by the OUE H-REIT Trust Deed or the determination of any matter which, under the OUE
H-REIT Trust Deed, requires the agreement of either or both of the REIT Manager and the
REIT Trustee.
The OUE H-REIT Trust Deed contains provisions that are designed to limit the liability of a holder
of OUE H-REIT Units to the amount paid or payable for any OUE H-REIT Unit. The provisions seek
to ensure that if the issue price of OUE H-REIT Units held by a holder of OUE H-REIT Units has
been fully paid, no such holder of OUE H-REIT Units, by reason alone of being a holder of OUE
H-REIT Units, will be personally liable to indemnify the REIT Trustee or any creditor of OUE
H-REIT in the event that the liabilities of OUE H-REIT exceed its assets.
Under the OUE H-REIT Trust Deed, each OUE H-REIT Unit carries the same voting rights.
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Limitations on the Right to Own OUE H-REIT Units
OUE H-REIT Units issued to persons resident outside Singapore
In relation to any rights issue or preferential offering, the REIT Manager may in its absolute
discretion elect not to extend an offer of OUE H-REIT Units under the rights issue or preferential
offering to those holders of OUE H-REIT Units, whose addresses are outside Singapore. In the
case of a rights issue, the provisional allocation of OUE H-REIT Units of such holders of OUE
H-REIT Units may be offered for sale by the REIT Manager as the nominee and authorised agent
of each such relevant holder of OUE H-REIT Unit in such manner and at such price, as the REIT
Manager may determine.
Where necessary, the REIT Trustee shall have the discretion to impose such other terms and
conditions in connection with the sale. The proceeds of any such sale, if successful, will be paid
to the relevant holders of OUE H-REIT Units whose rights or entitlements have been thus sold,
provided that where such proceeds payable to the relevant holders of OUE H-REIT Units are less
than S$10.00, the REIT Manager shall be entitled to retain such proceeds as part of the OUE
H-REIT Deposited Property.
Amendment of the OUE H-REIT Trust Deed
Save where an amendment to the OUE H-REIT Trust Deed has been approved by an
Extraordinary Resolution passed at a meeting of holders of OUE H-REIT Units duly convened and
held in accordance with the provisions of the OUE H-REIT Trust Deed, no amendment may be
made to the provisions of the OUE H-REIT Trust Deed unless the REIT Trustee certifies, in its
opinion, that such amendment:
(i) does not materially prejudice the interests of the holders of OUE H-REIT Units and does not
operate to release to any material extent the REIT Manager or the REIT Trustee from any
responsibility to the holders of OUE H-REIT Units;
(ii) is necessary in order to comply with applicable fiscal, statutory or official requirements
(whether or not having the force of law), including, without limitation, requirements under all
other applicable laws, regulations and guidelines; or
(iii) is made to remove obsolete provisions or to correct a manifest error.
No such amendment shall impose upon any holder of OUE H-REIT Units any obligation to make
any further payments in respect of his OUE H-REIT Units or to accept any liability in respect
thereof.
Circumstances under which the REIT Manager and/or REIT Trustee may be indemnified out
of the OUE H-REIT Deposited Property
In general, subject to any express provision under the OUE H-REIT Trust Deed and without
prejudice to any right of indemnity at law given to the REIT Manager and/or the REIT Trustee, the
REIT Manager and/or the REIT Trustee shall be entitled for the purpose of indemnity against any
actions, costs, claims, damages, expenses or demands to which it may be put as REIT Manager
and/or the REIT Trustee to have recourse to the OUE H-REIT Deposited Property or any part
thereof, save where such action, cost, claim, damage, expense or demand is occasioned by the
fraud, gross negligence or wilful default or breach of the OUE H-REIT Trust Deed by the REIT
Manager and/or the REIT Trustee or a breach of trust by the REIT Trustee.
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Circumstances under which the REIT Manager and/or the REIT Trustee may exclude liability
in relation to carrying out of its duties with respect to OUE H-REIT
Subject to the duties and obligations of the REIT Trustee under the OUE H-REIT Trust Deed, the
REIT Trustee shall at all times be entitled to rely on the recommendations, certifications and
representations of the REIT Manager in relation to OUE H-REIT and shall not be liable for any act
or omission of the REIT Manager in relation to OUE H-REIT save where the REIT Trustee is
fraudulent, grossly negligent or in wilful default.
In the absence of fraud, gross negligence, wilful default or breach of trust by the REIT Trustee, the
REIT Trustee shall not incur any liability by reason of any error of law or any matter or thing done
or suffered or omitted to be done by it in good faith under the OUE H-REIT Trust Deed.
The REIT Manager shall not be under any liability except such liability as may be assumed by it
under the OUE H-REIT Trust Deed nor shall the REIT Manager (save as otherwise appears in the
OUE H-REIT Trust Deed) be liable for any act or omission of the REIT Trustee.
In the absence of fraud, gross negligence, wilful default or breach of the OUE H-REIT Trust Deed
by REIT Manager, it shall not incur any liability by reason of any error of law or any matter or thing
done or suffered to be done or omitted to be done by it in good faith under the OUE H-REIT Trust
Deed.
Substantial OUE H-REIT Unitholdings
As the Stapled Securities comprise OUE H-REIT Units and OUE H-BT Units stapled together,
Stapled Securityholders have to comply with the regulatory requirements imposed on both OUE
H-REIT and OUE H-BT, including that of the requirement to disclose substantial holdings.
Pursuant to Sections 135 to 137B of the SFA (read with Section 137U of the SFA), with regard to
OUE H-REIT, holders of OUE H-REIT Units with an interest in one or more OUE H-REIT Units
constituting not less than 5.0% of all OUE H-REIT Units in issue (Substantial holders of OUE
H-REIT Units) are required to notify the REIT Manager and the REIT Trustee, within two
Business Days after their becoming aware of their becoming a Substantial holder of OUE H-REIT
Units, of any subsequent change in the percentage level of such holdings (rounded down to the
next whole number) or their ceasing to be a Substantial holder of OUE H-REIT Units. Failure to
comply with the notification requirements of the SFA constitutes an offence and will render a
Substantial holder of OUE H-REIT Units liable to a fine on conviction.
(See The Formation and Structure of OUE H-Trust, OUE H-REIT and OUE H-BT OUE H-BT
Substantial OUE H-BT Holdings for further details.)
Duty of the REIT Manager to Make Disclosure
Pursuant to Section 137ZC of the SFA, where the REIT Manager acquires or disposes of interests
in OUE H-REIT Units or debentures or units of debentures of OUE H-Trust, or the REIT Manager
has been notified in writing by, inter alia, a Substantial Stapled Securityholder or Director or Chief
Executive Officer of the REIT Manager pursuant to the unitholdings disclosure requirements of the
SFA as set out below, the REIT Manager shall announce such information via the SGXNET and
in such form and manner as the Authority may prescribe as soon as practicable and in any case
no later than the end of the Business Day following the day on which the REIT Manager became
aware of the acquisition or disposal or received the notice.
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Directors and Chief Executive Officer of the REIT Manager
Pursuant to Section 137Y of the SFA, directors and chief executive officers of the REIT Manager
will be required to, notify the REIT Manager in writing of inter alia, their acquisition of interest in
Stapled Securities or of changes to the number of Stapled Securities which they hold or in which
they have an interest, within two Business Days after such acquisition or after becoming aware of
such changes, as the case may be.
A director or chief executive officer of the REIT Manager is deemed to have an interest in OUE
H-REIT Units in inter alia, the following circumstances:
Where the REIT Manager Director or chief executive officer of the REIT Manager is the
beneficial owner of a OUE H-REIT Unit (whether directly through a direct Securities Account
or indirectly through a depository agent or otherwise), he is deemed to have an interest in
that OUE H-REIT Unit.
Where a body corporate is the beneficial owner of a OUE H-REIT Unit and the director or
chief executive officer of the REIT Manager is entitled to exercise or control the exercise of
not less than 20.0% of the votes attached to the voting shares in the body corporate, he is
deemed to have interest in that OUE H-REIT Unit.
Where the REIT Manager Directors or the REIT Managers chief executive officers (i)
spouse or (ii) son, adopted son, stepson, daughter, adopted daughter or step-daughter below
the age of 21 years has any interest in a OUE H-REIT Unit, he is deemed to have an interest
in that OUE H-REIT Unit.
Where the REIT Manager Director or chief executive officer of the REIT Manager, his (i)
spouse or (ii) son, adopted son, stepson, daughter, adopted daughter or step-daughter below
the age of 21 years:
has entered into a contract to purchase a OUE H-REIT Unit;
has a right to have a OUE H-REIT Unit transferred to any of them or to their order,
whether the right is exercisable presently or in the future and whether on the fulfilment
of a condition or not;
has the right to acquire a OUE H-REIT Unit under an option, whether the right is
exercisable presently or in the future and whether on the fulfilment of a condition or not;
or
is entitled (otherwise than by reason of any of them having been appointed a proxy or
representative to vote at a meeting of holders of OUE H-REIT Units) to exercise or
control the exercise of a right attached to a OUE H-REIT Unit, not being a OUE H-REIT
Unit of which any of them is the holder,
the REIT Manager Director or chief executive officer of the REIT Manager is deemed to have
an interest in that OUE H-REIT Unit.
Where the property subject to a trust consists of or includes a OUE H-REIT Unit and the REIT
Manager Director or chief executive officer of the REIT Manager knows or has reasonable
grounds for believing that he has an interest under the trust and the property subject to the
trust consists of or includes such OUE H-REIT Unit, he is deemed to have an interest in that
OUE H-REIT Unit.
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The REIT Trustee
The trustee of OUE H-REIT is RBC Investor Services Trust Singapore Limited. The REIT Trustee
is a company incorporated in Singapore and is registered as a trust company under the Trust
Companies Act. It is approved to act as a trustee for authorised collective investment schemes
under the SFA. As at the date of this Prospectus, the REIT Trustee has a paid-up capital of
S$6,000,000. The REIT Trustee has a place of business in Singapore at 20 Cecil Street, #28-01
Equity Plaza, Singapore 049705.
Powers, Duties and Obligations of the REIT Trustee
The REIT Trustees powers, duties and obligations are set out in the OUE H-REIT Trust Deed. The
powers and duties of the REIT Trustee include:
acting as trustee of OUE H-REIT and, in such capacity, safeguarding the rights and interests
of the holders of OUE H-REIT Units, for example, by satisfying itself that transactions it
enters into for and on behalf of OUE H-REIT with a Related Party of the REIT Manager or
OUE H-REIT are conducted on normal commercial terms, are not prejudicial to the interests
of OUE H-REIT and the holders of OUE H-REIT Units, and in accordance with all applicable
requirements under the Property Funds Appendix and/or the Listing Manual relating to the
transaction in question;
holding the assets of OUE H-REIT on trust for the benefit of the holders of OUE H-REIT Units
in accordance with the OUE H-REIT Trust Deed;
lending monies out of the assets of OUE H-REIT for the benefit of Stapled Securityholders
as a whole in accordance with the OUE H-REIT Trust Deed and subject to compliance with
the applicable laws, regulations and guidelines; and
exercising all the powers of a trustee and the powers that are incidental to the ownership of
the assets of OUE H-REIT.
The REIT Trustee has covenanted in the OUE H-REIT Trust Deed that it will exercise all due
diligence and vigilance in carrying out its functions and duties, and in safeguarding the rights and
interests of the holders of OUE H-REIT Units.
In the exercise of its powers, the REIT Trustee may (on the recommendation of the REIT Manager)
and subject to the provisions of the OUE H-REIT Trust Deed, acquire or dispose of any real or
personal property, borrow and encumber any asset.
The REIT Trustee may, subject to the provisions of the OUE H-REIT Trust Deed, appoint and
engage:
a person or entity to exercise any of its powers or perform its obligations; and
any real estate agents or managers, including a Related Party of the REIT Manager, in
relation to the management, development, leasing, purchase or sale of any real estate
assets and real estate-related assets.
Although the REIT Trustee may borrow money and obtain other financial accommodation for the
purposes of OUE H-REIT and to on-lend money to OUE H-BT, both on a secured and unsecured
basis, the REIT Manager must not direct the REIT Trustee to incur a liability if to do so would mean
that total liabilities of OUE H-REIT exceed 35.0% of the value of the OUE H-REIT Deposited
Property (or such other limit as may be stipulated by the Property Funds Appendix or other limit
prescribed by the MAS) unless a credit rating from Fitch, Moodys or Standard & Poors is obtained
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and disclosed to the public. The Property Funds Appendix allows OUE H-REIT to borrow up to
60.0% of the value of the OUE H-REIT Deposited Property only if such credit rating is obtained
and disclosed to the public.
The REIT Trustee must carry out its functions and duties and comply with all the obligations
imposed on it and set out in the OUE H-REIT Trust Deed, the Listing Manual, the SFA, the CIS
Code (including the Property Funds Appendix), the Tax Ruling and all other applicable laws,
regulations and guidelines. It must retain OUE H-REITs assets, or cause OUE H-REITs assets
to be retained, in safe custody and cause OUE H-REITs accounts to be audited. It can appoint
valuers to value the real estate assets and real estate-related assets of OUE H-REIT.
The REIT Trustee is not personally liable to a holder of OUE H-REIT Units in connection with the
office of the REIT Trustee except in respect of its own fraud, gross negligence, wilful default,
breach of trust or breach of the OUE H-REIT Trust Deed. Any liability incurred and any indemnity
to be given by the REIT Trustee shall be limited to the assets of OUE H-REIT over which the REIT
Trustee has recourse, provided that the REIT Trustee has acted without fraud, gross negligence,
wilful default, breach of trust or breach of the OUE H-REIT Trust Deed. The OUE H-REIT Trust
Deed contains certain indemnities in favour of the REIT Trustee under which it will be indemnified
out of the assets of OUE H-REIT for liability arising in connection with certain acts or omissions.
These indemnities are subject to any applicable laws.
Retirement and Replacement of the REIT Trustee
The REIT Trustee may retire or be replaced under the following circumstances:
The REIT Trustee shall not be entitled to retire voluntarily except upon the appointment of a
new trustee (such appointment to be made in accordance with the provisions of the OUE
H-REIT Trust Deed); and
The REIT Trustee may be removed by notice in writing to the REIT Trustee by the REIT
Manager:
if the REIT Trustee goes into liquidation (except a voluntary liquidation for the purpose
of reconstruction or amalgamation upon terms previously approved in writing by the
REIT Manager) or if a receiver is appointed over any of its assets or if a judicial manager
is appointed in respect of the REIT Trustee;
if the REIT Trustee ceases to carry on business;
if the REIT Trustee fails or neglects after reasonable notice from the REIT Manager to
carry out or satisfy any material obligation imposed on the REIT Trustee by the OUE
H-REIT Trust Deed;
if the holders of OUE H-REIT Units by Extraordinary Resolution duly passed at a
meeting of holders of OUE H-REIT Units held in accordance with the provisions of the
OUE H-REIT Trust Deed, and of which not less than 21 days notice has been given to
the REIT Trustee and the REIT Manager, shall so decide; or
if the MAS directs that the REIT Trustee be removed.
Remuneration of the REIT Trustee
The REIT Trustees fees are presently charged at a flat fee of 0.015% per annum of the value of
the OUE H-REIT Deposited Property for the first 12 months (commencing from the date of
inception of OUE H-REIT), and subsequently on a scaled basis of up to 0.02% per annum of the
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value of the OUE H-REIT Deposited Property if the value of the OUE H-REIT Deposited Property
is at least S$1 billion, subject to a minimum of S$20,000 per month, excluding out-of-pocket
expenses and GST. The actual fee payable will be determined between the REIT Manager and the
REIT Trustee from time to time. The fees are accrued and paid monthly in arrears in accordance
with the Trust Deed. The REIT Trustee will also be paid a one-time inception fee of S$20,000.
Under the OUE H-REIT Trust Deed, the maximum fee which the REIT Trustee may charge is 0.1%
per annum of the value of the OUE H-REIT Deposited Property. Any increase in the REIT Trustees
fee beyond the current 0.015% per annum of the value of the OUE H-REIT Deposited Property for
the first 12 months and the subsequent scaled basis but subject to the maximum permitted amount
of up to 0.1% per annum of the value of the OUE H-REIT Deposited Property will be subject to
agreement between the REIT Manager and the REIT Trustee.
Any increase in the maximum permitted amount or any change in the structure of the REIT
Trustees fee must be approved by an Extraordinary Resolution at a meeting of holders of the OUE
H-REIT Units duly convened and held in accordance with the provisions of the OUE H-REIT Trust
Deed.
Changes in the Fees payable
An Extraordinary Resolution of the holders of OUE H-REIT Units at a meeting convened and held
in accordance with the provisions of the OUE H-REIT Trust Deed is required to approve:
any increase in the rate or any change in the structure of the REIT Managers management
fees or the REIT Trustees fee; and
any increase in the rate above the permitted limit or any change in the structure of the REIT
Managers acquisition fee, divestment fee and development management fee.
Termination of OUE H-REIT
Under the provisions of the OUE H-REIT Trust Deed, the duration of OUE H-REIT shall end on the
earliest of:
the date on which OUE H-REIT is terminated by the REIT Manager in such circumstances as
set out under the provisions of the OUE H-REIT Trust Deed, as described below; or
the date on which OUE H-REIT is terminated by the REIT Trustee in such circumstances as
set out under the provisions of the OUE H-REIT Trust Deed, as described below.
The REIT Manager may in its absolute discretion terminate OUE H-REIT by giving notice in writing
to all the holders of OUE H-REIT Units and the REIT Trustee not less than three months in
advance and to the MAS not less than seven days before the termination in any of the following
circumstances:
if any law shall be passed which renders it illegal or in the opinion of the REIT Manager
impracticable or inadvisable to continue OUE H-REIT;
if the NAV of the OUE H-REIT Deposited Property shall be less than S$50.0 million after the
end of the first anniversary of the date of the OUE H-REIT Trust Deed or any time thereafter;
and
if at any time OUE H-REIT becomes unlisted after it has been listed.
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Subject to the SFA and any other applicable laws or regulations, OUE H-REIT may be terminated
by the REIT Trustee by notice in writing in any of the following circumstances, namely:
if the REIT Manager shall go into liquidation (except a voluntary liquidation for the purpose
of reconstruction or amalgamation upon terms previously approved in writing by the REIT
Trustee) or if a receiver is appointed over any of its assets or if a judicial manager is
appointed in respect of the REIT Manager or if any encumbrancer shall take possession of
any of its assets or if it shall cease business and the REIT Trustee fails to appoint a
successor manager in accordance with the provisions of the OUE H-REIT Trust Deed;
if any law shall be passed which renders it illegal or in the opinion of the REIT Trustee
impracticable or inadvisable to continue OUE H-REIT; and
if within the period of three months from the date of the REIT Trustee expressing in writing
to the REIT Manager the desire to retire the REIT Manager fails to appoint a new trustee in
accordance with the provisions of the OUE H-REIT Trust Deed.
The decision of the REIT Trustee in any of the events specified above shall be final and binding
upon all the parties concerned but the REIT Trustee shall be under no liability on account of any
failure to terminate OUE H-REIT pursuant to the paragraph above or otherwise. The REIT
Manager shall accept the decision of the REIT Trustee and relieve the REIT Trustee of any liability
to it therefor and hold it harmless from any claims whatsoever on its part for damages or for any
other relief.
In addition to the above, the holders of the OUE H-REIT Units may, by Extraordinary Resolution
duly passed at a meeting of the holders of the OUE H-REIT Units held in accordance with Section
295 of the SFA, terminate OUE H-REIT.
Generally, upon the termination of OUE H-REIT, the REIT Trustee shall, subject to any
authorisations or directions given to it by the REIT Manager or the holders of OUE H-REIT Units
pursuant to the OUE H-REIT Trust Deed, sell the OUE H-REIT Deposited Property and repay any
borrowings incurred on behalf of OUE H-REIT in accordance with the OUE H-REIT Trust Deed
(together with any interest accrued but remaining unpaid) as well as all other debts and liabilities
in respect of OUE H-REIT before distributing the balance of the OUE H-REIT Deposited Property
to the holders of OUE H-REIT Units in accordance with their proportionate interests in the OUE
H-REIT Deposited Property.
THE FORMATION AND STRUCTURE OF OUE H-BT
OUE H-BT was constituted as a business trust on 10 July 2013 by a declaration of trust made by
the Trustee-Manager. OUE H-BT was registered as a business trust on 17 July 2013.
The terms and conditions of the OUE H-BT Trust Deed shall be binding on each holder of OUE
H-BT Units (and persons claiming through such holder of OUE H-BT Units) as if such holder of
OUE H-BT Units had been a party to the OUE H-BT Trust Deed and as if the OUE H-BT Trust Deed
contains covenants by such holder of OUE H-BT Units to do all such acts and things as the OUE
H-BT Trust Deed may require the Trustee-Manager to do.
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The OUE H-BT Trust Deed
While OUE H-REIT Units remain stapled to OUE H-BT Units, the terms and conditions of the OUE
H-BT Trust Deed shall be binding on each Stapled Securityholder (and persons claiming through
such Stapled Securityholder) as if such Stapled Securityholder had been a party to the OUE H-BT
Trust Deed and as if the OUE H-BT Trust Deed contains covenants by such Stapled
Securityholder to observe and be bound by the provisions of the OUE H-BT Trust Deed and an
authorisation by each Stapled Securityholder to do all such acts and things as the OUE H-BT Trust
Deed may require the Trustee-Manager to do.
The provisions of the BTA prescribe certain terms of the OUE H-BT Trust Deed and certain rights,
duties and obligations of the Trustee-Manager and (while OUE H-REIT Units remain stapled to
OUE H-BT Units) Stapled Securityholders under the OUE H-BT Trust Deed. To the extent of any
inconsistency between the obligations of the Trustee-Manager under the OUE H-BT Trust Deed
and the Stapling Deed, the provisions of the Stapling Deed shall prevail.
The OUE H-BT Units and the holders of OUE H-BT Units
The rights and interests of holders of OUE H-BT Units are contained in the OUE H-BT Trust Deed.
Under the OUE H-BT Trust Deed, these rights and interests are safeguarded by the Trustee-
Manager.
Each OUE H-BT Unit represents an undivided interest in OUE H-BT. Holders of OUE H-BT Units
have no equitable or proprietary interest in the underlying assets of OUE H-BT and are not entitled
to the transfer to it of any asset (or any part thereof) or of any real estate, any interest in any asset
and any real estate-related assets (or any part thereof) of OUE H-BT. The rights of the holders of
OUE H-BT Units are limited to the right to require due administration of OUE H-BT in accordance
with the provisions of the OUE H-BT Trust Deed, including, without limitation, by suit against the
Trustee-Manager.
Under the OUE H-BT Trust Deed, each holder of OUE H-BT Units acknowledges and agrees that
it will not commence or pursue any action against the Trustee-Manager seeking an order for
specific performance or for injunctive relief in respect of the assets of OUE H-BT (or any part
thereof), including all its Authorised Investments (as defined in the OUE H-BT Trust Deed), and
waives any rights it may otherwise have to such relief. If the Trustee-Manager breaches or
threatens to breach its duties or obligations to holders of OUE H-BT Units under the OUE H-BT
Trust Deed, recourse by the holders of OUE H-BT Units against the Trustee-Manager is limited to
a right to recover damages or compensation from the Trustee-Manager in a court of competent
jurisdiction, and holders of OUE H-BT Units acknowledge and agree that damages or
compensation is an adequate remedy for such breach or threatened breach.
Further, unless otherwise expressly provided in the OUE H-BT Trust Deed, holders of OUE H-BT
Units may not interfere or seek to interfere with the rights, powers, authority or discretion of the
Trustee-Manager, exercise any right in respect of the assets of OUE H-BT or any part thereof, or
require that any Authorised Investments forming part of the assets of OUE H-BT be transferred to
such holders of OUE H-BT Units.
No certificate shall be issued to holders of OUE H-BT Units by the Trustee-Manager in respect of
OUE H-BT Units issued to holders of OUE H-BT Units. For so long as OUE H-Trust is listed,
quoted and traded on the SGX-ST and/or any other Recognised Stock Exchange, in accordance
with the listing rules and requirements of the relevant stock exchange, the Trustee-Manager shall
appoint CDP as the unit depository for OUE H-BT in respect of all scripless Stapled Securities in
accordance with the Depository Services Terms and Conditions. All Stapled Securities issued will
be represented by entries in the register of holders of OUE H-BT Units kept by the Trustee-
Manager or the agent appointed by the Trustee-Manager in the name of, and deposited with, CDP
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as the registered holder of such Stapled Securities and, as the case may be, in the name of
Stapled Securityholders (other than the CDP) whose Stapled Securities are not deposited with the
CDP. The Trustee-Manager or their jointly appointed agent shall issue to CDP not more than 10
Business Days after the issue of Stapled Securities a confirmation note confirming the date of
issue and the number of Stapled Securities so issued and, if applicable, also stating that the
Stapled Securities are issued under a moratorium and the expiry date of such moratorium and for
the purposes of the OUE H-BT Trust Deed and the Stapling Deed, such confirmation note shall be
deemed to be a certificate evidencing title to the OUE H-BT Units and the corresponding Stapled
Securities issued.
There are no restrictions under the Stapling Deed, the OUE H-BT Trust Deed or Singapore law on
a persons right to purchase (or subscribe for) OUE H-BT Units and to own OUE H-BT Units except
in the case of rights issue or, as the case may be, any preferential offering where the
Trustee-Manager has the right under the OUE H-BT Trust Deed to elect not to extend an offer of
OUE H-BT Units under the rights issue or, as the case may be, any preferential offering to holders
of OUE H-BT Units whose addresses are outside Singapore.
Changes in Equity of the Holders of OUE H-BT Units
The Trustee-Manager may at any time and on prior written notice (such notice period shall be
determined by the Trustee-Manager in its absolute discretion) to each holder of OUE H-BT Units
by the Trustee-Manager delivering such notice in writing to CDP for onward delivery to the holders
of OUE H-BT Units, determine that each OUE H-BT Unit shall be sub-divided into two or more
OUE H-BT Units or consolidated with one or more other OUE H-BT Units and the holders of OUE
H-BT Units shall be bound accordingly. The Trustee-Manager shall thereupon require each holder
of OUE H-BT Units to deliver up his confirmation note (if any) for endorsement or enfacement with
the number of OUE H-BT Units thereby represented as a result of such sub-division or
consolidation (in the case of a sub-division) or send or cause to be sent to each holder of OUE
H-BT Units, a confirmation note representing the number of additional OUE H-BT Units to which
he has become entitled by reason of the sub-division.
While Stapling applies, OUE H-BT Units may not be sub-divided or consolidated unless the
corresponding OUE H-REIT Units are sub-divided or, as the case may be, consolidated at the
same time and to the same extent.
The Register shall be altered accordingly to reflect the new number of OUE H-BT Units held by
each holder of OUE H-BT Unit or, as the case may be, Stapled Securities as a result of such
sub-division or consolidation and the Trustee-Manager shall cause CDP to alter the depository
register maintained by CDP accordingly in respect of the Securities Account or sub-account
maintained by a Depositor (as defined in Section 130A of the Companies Act) with CDP
(Securities Account) of each holder of the OUE H-BT Units to reflect the new number of OUE
H-BT Units held by such holder of OUE H-BT Units as a result of such sub-division or
consolidation.
Rights, Preferences and Restrictions Attaching to Each Class of OUE H-BT Units
The OUE H-BT Trust Deed provides that rights attached to the OUE H-BT Units issued with
special conditions have to be clearly defined in the OUE H-BT Trust Deed and, if at any time,
different classes of OUE H-BT Units are issued, the rights attached to any class (unless otherwise
provided by the terms of issue of the OUE H-BT Units of that class) may, subject to the provisions
of any applicable laws, regulations and guidelines, be varied or abrogated with the sanction of an
Extraordinary Resolution passed at a separate meeting of the holders of OUE H-BT Units of that
class.
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Currently, there is only one class of OUE H-BT Units and every OUE H-BT Unit carries the same
voting rights. Under the BTA, only persons registered in the statutory register maintained by the
Trustee-Manager are recognised as registered holders of OUE H-BT Units in issue. For so long
as OUE H-BT is listed, CDP shall be the registered holder of all the OUE H-BT Units in issue and
CDP shall pursuant to the Depository Services Terms and Conditions, maintain a record in a
depository register of the holders of OUE H-BT Units having OUE H-BT Units credited into their
respective Securities Accounts and to record in the depository register the following information
stated below in relation to each namely:
the names and addresses of the holders of OUE H-BT Units;
the class of OUE H-BT Units held by each holder of OUE H-BT Units;
the number of OUE H-BT Units held by each holder of OUE H-BT Units;
the date on which every such person entered into the depository register in respect of the
OUE H-BT Units standing in his name became a holder of OUE H-BT Units and, where he
became a holder of OUE H-BT Units by virtue of an instrument of transfer, a sufficient
reference to enable the name and address of the transferor to be identified;
the date on which any transfer is registered and the name and address of the transferee; and
where applicable, the date on which a holder of OUE H-BT Units ceases or ceased to be a
holder of OUE H-BT Units.
Each holder of OUE H-BT Units named in the depository register shall for such period as the OUE
H-BT Units are entered against his name in the depository register, be deemed to be the owner
in respect of the number of OUE H-BT Units entered against the name of such holder of OUE H-BT
Units in the depository register and would be entitled to attend and vote at general meetings of
holders of OUE H-BT Units. The Trustee-Manager shall be entitled to rely on any and all such
information in the depository register.
The entries in the depository register shall (save in the case of manifest error) be conclusive
evidence of the number of OUE H-BT Units held by each holder of OUE H-BT Units and in the
event of any discrepancy between the entries in the depository register and the details appearing
in any confirmation note or monthly statement issued by CDP, the entries in the depository register
shall prevail unless the holder of OUE H-BT Units proves to the satisfaction of the Trustee-
Manager and CDP that the depository register is incorrect.
Distributions
Subject to applicable laws, regulations and guidelines, and the OUE H-BT Trust Deed, the
Trustee-Manager shall have the right to make regular distributions to holders of OUE H-BT of such
amounts to be payable out of the OUE H-BT Trust Property on such distribution dates as the
Trustee-Manager may think fit. All distributions are paid pro rata among the holders of OUE H-BT
Units in proportion to the amount paid-up on each of their OUE H-BT Units, unless the rights
attached to an issue of any OUE H-BT Unit provide otherwise. Any monies payable to holders of
OUE H-BT Units which remain unclaimed after a period of 12 months shall be accumulated in an
Unclaimed Monies Account from which the Trustee-Manager may, from time to time, make
payments to holders of OUE H-BT Units claiming any such monies.
Subject to the winding-up provisions in the OUE H-BT Trust Deed, the Trustee-Manager, may, at
its discretion and if practicable, cause such sums which represent monies remaining in the
Unclaimed Monies Account for five years after the date of payment of such monies into the
Unclaimed Monies Account and interest, if any, earned thereon, to be paid into the courts of
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Singapore and any fees, costs and expenses incurred in relation to such payment into the courts
of Singapore
1
shall be deducted from the monies payable to the relevant holder of OUE H-BT
Units. If the said monies are insufficient to meet all such fees, costs and expenses, the
Trustee-Manager shall be entitled to have recourse to the OUE H-BT Trust Property for such
payment. Where the OUE H-BT is listed and to the extent that such unclaimed monies are held
by the CDP, subject to the winding-up provisions in the OUE H-BT Trust Deed, the Trustee-
Manager may, at its discretion and if practicable, cause such sums which are returned by the CDP
to the Trustee-Manager (and which have remained unclaimed by a holder of OUE H-BT Units for
a period of six years after the time when such monies became payable to such holder of OUE
H-BT Units) to be paid into the courts of Singapore and any fees, costs and expenses incurred in
relation to such payment into the courts of Singapore shall be deducted from the monies payable
to the relevant holder of OUE H-BT Units. If the said monies are insufficient to meet all such fees,
costs and expenses, the Trustee-Manager shall be entitled to have recourse to the OUE H-BT
Trust Property for such payment.
Voting Rights
A holder of OUE H-BT Units is entitled to attend, speak and vote at any general meeting of the
holders of OUE H-BT Units in person or by proxy and a holder of OUE H-BT Units may appoint
not more than two proxies to attend and vote at the same general meeting as a holder of OUE
H-BT Units if his name appears on the depository register as at 48 hours before the time of the
relevant general meeting as certified by the depository to OUE H-BT. Except as otherwise
provided in the OUE H-BT Trust Deed, not less than two holders of OUE H-BT Units must be
present in person or by proxy to constitute a quorum at any general meeting PROVIDED THAT (i)
a proxy representing more than one holder of OUE H-BT Units shall only count as one holder of
OUE H-BT Units for the purpose of determining the quorum and (ii) where a holder of OUE H-BT
Units is represented by more than one proxy such proxies shall count as only one holder for the
purpose of determining the quorum.
Under the OUE H-BT Trust Deed, on a show of hands every holder of OUE H-BT Units present
in person or by proxy shall have one vote, and on a poll, every holder of OUE H-BT Units who is
present in person or by proxy shall have one vote for every OUE H-BT Unit which he holds or
represents. Subject to the requirements of the prevailing listing rules of the SGX-ST, voting at a
meeting shall be by a show of hands unless a poll is demanded by the chairman of the general
meeting or by five or more holders of OUE H-BT Units (including their proxies) having the right to
vote at the general meeting or by holders of OUE H-BT Units (including their proxies) representing
not less than 10.0% of the total voting rights of all the holders of OUE H-BT Units having the right
to vote at the general meeting.
Variation of Rights of Respective Classes of OUE H-BT Units
If at any time different classes of OUE H-BT Units are issued, the rights attached to any class
(unless otherwise provided by the terms of issue of the OUE H-BT Units of that class) may, subject
to any applicable laws, regulations and guidelines, whether or not OUE H-BT is being wound up,
be varied or abrogated with the sanction of an Extraordinary Resolution passed at a separate
meeting of the holders of OUE H-BT Units of that class. To every such Extraordinary Resolution
of the holders of OUE H-BT Units of that class the provisions of the OUE H-BT Trust Deed relating
to general meetings of the holders of OUE H-BT Units shall apply mutatis mutandis provided that
1 The Trustees Act allows a trustee to discharge its liabilities towards unclaimed monies by paying such monies into
Singapore courts, although it does not prescribe the period for which the monies must be unclaimed before they may
be paid into the courts. Although the Trustees Act is not applicable to a registered business trust, as a matter of
prudence, the OUE H-BT Trust Deed has provided that the Trustee-Manager may pay unclaimed monies into the
courts.
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the necessary quorum shall be two persons at least holding or representing by proxy or by
attorney one-third of the issued OUE H-BT Units of the class and that any OUE H-BT Unitholder
of that class present in person or by proxy or by attorney may demand a poll.
The rights conferred upon the holders of OUE H-BT Units of any class issued with preferred or
other rights shall, unless otherwise expressly provided by the terms of issue of the OUE H-BT
Units of that class or by the OUE H-BT Trust Deed as are in force at the time of such issue, be
deemed to be varied by the creation or issue of further OUE H-BT Units ranking equally therewith,
and would therefore require the sanction of an Extraordinary Resolution passed at a separate
meeting of the holders of OUE H-BT Units of such class.
The OUE H-BT Trust Deed does not impose more stringent conditions than those required by the
applicable law.
Issue of OUE H-BT Units
The Trustee-Manager has the exclusive right to issue OUE H-BT Units for the account of OUE
H-BT. For so long as OUE H-BT is listed on the SGX-ST, the Trustee-Manager may, subject to the
provisions of the Listing Manual, the OUE H-BT Trust Deed, the BTA and any other relevant laws,
regulations and guidelines, issue OUE H-BT Units.
In particular, the issuance of OUE H-BT Units will be subject to Section 36 of the BTA, which
requires the approval by a majority of the number of votes of holders of OUE H-BT Units who,
being entitled to do so, vote in person or by proxy present at a general meeting of holders of OUE
H-BT Units.
If in connection with an issue of a OUE H-BT Unit, any requisite payment of the issue price for
such OUE H-BT Unit has not been received by the Trustee-Manager before the seventh Business
Day after the date on which the OUE H-BT Unit was agreed to be issued (or such other later date
as the Trustee-Manager may agree), the Trustee-Manager may cancel its agreement to issue such
OUE H-BT Unit and such OUE H-BT Unit will be deemed never to have been issued or agreed to
be issued. In such an event, the Trustee-Manager may charge the investor (and retain the same
for its own account) a cancellation fee of such amount as the Trustee-Manager may from time to
time determine to represent the administrative costs involved in processing the application for
such OUE H-BT Unit.
Suspension of Issue of OUE H-BT Units
The Trustee-Manager may, subject to the Listing Manual, suspend the issue of OUE H-BT Units
during any of the following events:
the existence of any state of affairs which, in the opinion of the Trustee-Manager, might
seriously prejudice the interests of the holders of OUE H-BT Units as a whole or the OUE
H-BT Trust Property;
of any assets of OUE H-BT or (if relevant) the current price thereof on the SGX-ST or any
other relevant Recognised Stock Exchange or when, for any reason, the prices of any assets
of OUE H-BT cannot be promptly and accurately ascertained;
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asset of OUE H-BT or in the payment for such asset of OUE H-BT cannot, in the opinion of
the Trustee-Manager, be carried out at normal rates of exchange;
any period where the issuance of OUE H-BT Units is suspended pursuant to any order or
direction issued by the MAS or other relevant regulatory authorities;
in relation to any general meeting of the holders of OUE H-BT Units, any 48 hour period
before such general meeting or any adjournment thereof; or
when the business operations of the Trustee-Manager in relation to OUE H-BT are
substantially interrupted or closed as a result of, or arising from, nationalisation,
expropriation, currency restrictions, pestilence, widespread communicable and infectious
diseases, acts of war, terrorism, insurrection, revolution, civil unrest, riots, strikes nuclear
fusion or fission or acts of God.
Such suspension shall take effect forthwith upon the declaration in writing thereof by the
Trustee-Manager and shall terminate on the day following the first Business Day on which the
condition giving rise to the suspension ceases to exist and no other conditions under which
suspension is authorised (as set out above) exists, upon the declaration in writing thereof by the
Trustee-Manager.
In the event of any suspension while OUE H-BT is listed on the SGX-ST, the Trustee-Manager
shall ensure that the immediate announcement of such suspension is made through the SGX-ST.
Meeting of Holders of OUE H-BT Units
Under applicable laws and the provisions of the OUE H-BT Trust Deed, OUE H-BT will not hold
any meetings for holders of OUE H-BT Units unless the Trustee-Manager convenes a meeting or
unless holders of not less than 10.0% of total voting rights of OUE H-BT Units request a meeting
to be convened.
A meeting of holders of OUE H-BT Units when convened may:
by Extraordinary Resolution and in accordance with the OUE H-BT Trust Deed, sanction any
modification, alteration or addition to the OUE H-BT Trust Deed which shall be proposed by
the Trustee-Manager as provided in the OUE H-BT Trust Deed;
by Extraordinary Resolution and in accordance with the OUE H-BT Trust Deed, sanction a
supplemental deed increasing the maximum permitted limit or any change in the structure of
fees payable to the Trustee-Manager;
by Extraordinary Resolution and in accordance with the OUE H-BT Trust Deed, remove the
auditors of OUE H-BT;
by Extraordinary Resolution and in accordance with the OUE H-BT Trust Deed, delist OUE
H-BT after it has been listed; and
by Extraordinary Resolution and in accordance with the OUE H-BT Trust Deed, remove the
Trustee-Manager.
Any decision to be made by resolution of the holders of OUE H-BT Units other than the above shall
be made by Ordinary Resolution, unless an Extraordinary Resolution is required by the BTA or
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Except as otherwise provided for in the OUE H-BT Trust Deed, 14 days notice at the least (not
inclusive of the day on which the notice is served or deemed to be served and of the day for which
the notice is given) of every meeting shall be given to the holders of OUE H-BT Units in the
manner provided in the OUE H-BT Trust Deed. The quorum at a meeting shall not be less than two
holders of OUE H-BT Units present in person or by proxy, PROVIDED THAT (i) a proxy
representing more than one holder of OUE H-BT Units shall count as one holder of OUE H-BT
Units for the purpose of determining the quorum; and (ii) where a holder of OUE H-BT Units is
represented by more than one proxy such proxies shall count as only one holder of OUE H-BT
Units for the purpose of determining the quorum. Each notice shall specify the place, day and hour
of the meeting, and the terms of the resolutions to be proposed, and each such notice may, in
general, be published in any one leading English-language daily newspaper in Singapore.
Subject to the requirements of the prevailing listing rules by the SGX-ST, voting at a meeting shall
be by a show of hands unless a poll is demanded by the chairman of the meeting, or by five or
more holders of OUE H-BT Units present in person or by proxy, or holding or representing one
tenth in value of all OUE H-BT Units represented at the meeting. Holders of OUE H-BT Units do
not have different voting rights on account of the number of votes held by a particular holder of
OUE H-BT Units. On a show of hands, every holder of OUE H-BT Units has one vote. On a poll,
every holder of OUE H-BT Units has one vote for each OUE H-BT Unit of which it is the holder.
The OUE H-BT Trust Deed does not contain any limitation on non-Singapore resident or foreign
holders of OUE H-BT Units holding OUE H-BT Units or exercising the voting rights with respect
to their holdings of OUE H-BT Units.
Neither the Trustee-Manager nor any of its associates shall be entitled to vote or be counted as
part of a quorum at a meeting convened to consider a matter in respect of which the
Trustee-Manager or any of its associates has a material interest save for an Extraordinary
Resolution duly proposed to remove the Trustee-Manager, in which case, no holder of OUE H-BT
Units shall be disenfranchised.
For so long as the Trustee-Manager is the trustee-manager of OUE H-BT, the controlling
shareholders (as defined in the Listing Rules) of the Trustee-Manager and of any of its associates
are prohibited from voting or being counted as part of a quorum for any meeting of holders of OUE
H-BT Units convened to consider a matter in respect of which the relevant controlling
shareholders of the Trustee-Manager and/or of any of its associates have a material interest.
Rights and Liabilities of the Holders of OUE H-BT Units
The key rights of the holders of OUE H-BT Units include rights to:
receive income and other distributions attributable to the OUE H-BT Units held;
receive audited accounts and the annual reports of OUE H-BT; and
participate in the winding-up or liquidation of OUE H-BT by receiving a share of all net cash
proceeds derived from the realisation of the assets of OUE H-BT less any liabilities, in
accordance with their proportionate interests in OUE H-BT.
No holder of OUE H-BT Units has a right to require that any asset of OUE H-BT be transferred to
him.
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Further, holders of OUE H-BT Units cannot give any directions to the Trustee-Manager (whether
at a meeting of the holders of OUE H-BT Units or otherwise) if it would require the Trustee-
Manager to do or omit doing anything which may result in:
OUE H-BT ceasing to comply with applicable laws and regulations; or
the exercise of any discretion expressly conferred on the Trustee-Manager by the OUE H-BT
Trust Deed or the determination of any matter which, under the OUE H-BT Trust Deed,
requires the agreement of the Trustee-Manager.
The OUE H-BT Trust Deed contains provisions that are designed to limit the liability of a holder
of OUE H-BT Units to the amount paid or payable for any OUE H-BT Unit. The provisions seek to
ensure that if the issue price of the OUE H-BT Units held by a holder of OUE H-BT Units has been
fully paid, no such holder of OUE H-BT Units, by reason alone of being a holder of OUE H-BT
Units, will be personally liable to indemnify the Trustee-Manager or any creditor of OUE H-BT in
the event that the liabilities of OUE H-BT exceed its assets.
Limitation on Right to Own OUE H-BT Units
OUE H-BT Units Issued to Persons Resident outside Singapore
In relation to any rights issue, the Trustee-Manager may in its absolute discretion elect not to
extend an offer of OUE H-BT Units under the rights issue to those holders of OUE H-BT Units,
whose addresses are outside Singapore. In such an event, the rights or entitlements to the OUE
H-BT Units of such holders of OUE H-BT Units will be offered for subscription by the
Trustee-Manager as the nominee and authorised agent of each such relevant OUE H-BT
Unitholder in such manner and at such price, as the Trustee-Manager may determine.
Where necessary, the Trustee-Manager shall have the discretion to impose such other terms and
conditions in connection with the sale. The proceeds of any such sale, if successful, will be paid
to the relevant holders of OUE H-BT Units whose rights or entitlements have been thus sold,
provided that where such proceeds payable to the relevant holders of OUE H-BT Units are less
than S$10.00, the Trustee-Manager shall be entitled to retain such proceeds as part of the OUE
H-BT Trust Property.
Amendments to the OUE H-BT Trust Deed
After the Listing Date, the Trustee-Manager shall be entitled, by deed supplemental hereto
(including by way of an amending and restating deed), to modify, alter or add to the provisions of
the OUE H-BT Trust Deed in such manner and to such extent as it may consider expedient for any
purpose in accordance with the provisions of the BTA.
The BTA currently provides that the trust deed of a Registered Business Trust may be amended
by a resolution passed by the unitholders of that trust holding in the aggregate not less than 75.0%
of the voting rights of all unitholders of the trust who, being entitled to do so, vote in person or by
proxy present at a general meeting of which not less than 21 days written notice specifying the
intention to propose the resolution as a special resolution has been duly given.
Circumstances under which the Trustee-Manager may be Indemnified out of the OUE H-BT
Trust Property
In general, subject to any express provision under the OUE H-BT Trust Deed and without
prejudice to any right of indemnity at law given to the Trustee-Manager, the Trustee-Manager is
entitled for the purpose of indemnity against any actions, costs, claims, damages, expenses or
demands to which it may be put as OUE H-BTs trustee-manager to have recourse to the OUE
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H-BT Trust Property or any part thereof, save where such action, cost, claim, damage, expense
or demand is occasioned by the fraud, wilful default, breach of the OUE H-BT Trust Deed or
breach of trust by the Trustee-Manager or where the Trustee-Manager fails to exercise Due Care.
Circumstances under which the Trustee-Manager may Exclude Liability in Relation to
Carrying Out of Its Duties With Respect to OUE H-BT
Subject to the duties and obligations of the Trustee-Manager under the OUE H-BT Trust Deed, the
Trustee-Manager shall not be liable for any act or omission of in relation to OUE H-BT save where
there is, on the part of the Trustee-Manager, fraud, wilful default, breach of the OUE H-BT Trust
Deed or breach of trust or where the Trustee-Manager fails to exercise Due Care.
In the absence of fraud, wilful default, breach of the OUE H-BT Trust Deed or breach of trust by
the Trustee-Manager or where the Trustee-Manager fails to exercise Due Care, the Trustee-
Manager shall not incur any liability to the holders of OUE H-BT Units by reason of any error of
law or any matter or thing done or suffered or omitted to be done by it in good faith under the OUE
H-BT Trust Deed.
Substantial OUE H-BT Holdings
As the Stapled Securities comprise OUE H-REIT Units and OUE H-BT Units stapled together,
Stapled Securityholders have to comply with the regulatory requirements imposed on both OUE
H-REIT and OUE H-BT, including that of the requirement to disclose substantial holdings.
Pursuant to Sections 135 to 137B of the SFA (read with Section 137J of the SFA), holders of OUE
H-BT Units with an interest in one or more OUE H-BT Units constituting not less than 5.0% of all
OUE H-BT Units in issue (Substantial holders of OUE H-BT Units) required to notify the
Trustee-Manager within two Business Days after becoming aware of their becoming a Substantial
holder of OUE H-BT Units, of any subsequent change in the percentage level of such holdings
(rounded down to the next whole number) or their ceasing to be a Substantial holder of OUE H-BT
Units.
Failure to comply with the notification requirements of the SFA constitutes an offence and will
render a Substantial holder of OUE H-BT Units liable to a fine on conviction.
Holders of voting shares in the Trustee-Manager
Pursuant to Section 137P of the SFA, where the percentage of interest of a person in the voting
shares in the Trustee-Manager reaches, crosses or falls below 15%, 30%, 50% or 75%, he shall
give notice in writing to the Trustee-Manager within two Business Days after he becomes aware
of this.
Failure to comply with the notification requirements of the SFA constitutes an offence and will
render a substantial shareholder in the Trustee-Manager liable to a fine on conviction.
The Trustee-Manager Boards Declaration of Holdings of OUE H-BT Units
Under Section 13 of the BTA, the Trustee-Manager Directors are required to give notice to the
Trustee-Manager of their acquisition of OUE H-BT Units or of changes to the number of OUE H-BT
Units which they hold or in which they have an interest, within two Business Days after such
acquisition or the occurrence of the event giving rise to changes in the number of OUE H-BT Units
which they hold or in which they have an interest, as applicable. Upon such notification, the
Trustee-Manager will promptly announce such interests or changes via SGXNET or to any other
relevant Recognised Stock Exchange.
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Duty of the Trustee-Manager to Make Disclosure
Pursuant to Section 137R of the SFA, where the Trustee-Manager (i) acquires or disposes of
interests in units in OUE H-BT or (ii) has been notified in writing by a Substantial holder of OUE
H-BT Units or a Director or a chief executive officer of the Trustee-Manager pursuant to the
unitholdings disclosure requirements of the SFA as set out below, or has been notified by a person
who holds an interest in voting shares in the Trustee-Manager pursuant to a requirement imposed
on him under Section 137P of the SFA, the Trustee-Manager shall announce such information on
the SGXNET as soon as practicable and in any case no later than the end of the Business Day
following the day on which the Trustee-Manager became aware of such information or received
the notice.
Directors and Chief Executive Officers of the Trustee-Manager
Pursuant to Section 137N of the SFA, directors and chief executive officers of the Trustee-
Manager will be required to notify the Trustee-Manager in writing of inter alia, their acquisition of
OUE H-BT Units or of changes to the number of OUE H-BT Units which they hold or in which they
have an interest, within two Business Days after such acquistion or after becoming aware of such
change, as the case may be.
A director or chief executive officer of the Trustee-Manager is deemed to have an interest in OUE
H-BT Units in, inter alia, the following circumstances:
Where the director or chief executive officer of the Trustee-Manager is the beneficial owner
of a OUE H-BT Unit (whether directly through a direct Securities Account or indirectly through
a depository agent or otherwise), he is deemed to have an interest in that OUE H-BT Unit.
Where a body corporate is the beneficial owner of a OUE H-BT Unit and the director or chief
executive officer of the Trustee-Manager is entitled to exercise or control the exercise of not
less than 20.0% of the votes attached to the voting shares in the body corporate, he is
deemed to have interest in that OUE H-BT Unit.
Where the Trustee-Managers directors or chief executive officers (i) spouse or (ii) son,
adopted son, stepson, daughter, adopted daughter or step-daughter below the age of
21 years has any interest in a OUE H-BT Unit, he is deemed to have an interest in that OUE
H-BT Unit.
Where the director or chief executive officers of the Trustee-Manager, his (i) spouse or (ii)
son, adopted son, stepson, daughter, adopted daughter or step-daughter below the age of
21 years:
has entered into a contract to purchase a OUE H-BT Unit;
has a right to have a OUE H-BT Unit transferred to any of them or to their order, whether
the right is exercisable presently or in the future and whether on the fulfilment of a
condition or not;
has the right to acquire a OUE H-BT Unit under an option, whether the right is
exercisable presently or in the future and whether on the fulfilment of a condition or not;
or
is entitled (otherwise than by reason of any of them having been appointed a proxy or
representative to vote at a meeting of holders of OUE H-BT Units) to exercise or control
the exercise of a right attached to a OUE H-BT Unit, not being a OUE H-BT Unit of which
any of them is the holder,
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the director or chief executive officer of the Trustee-Manager is deemed to have an interest
in that OUE H-BT Unit.
Where the property subject to a trust consists of or includes a OUE H-BT Unit and the
director or chief executive officer of the Trustee-Manager knows or has reasonable grounds
for believing that he has an interest under the trust and the property subject to the trust
consists of or includes such OUE H-BT Unit, he is deemed to have an interest in that OUE
H-BT Unit.
The Trustee-Manager
The Trustee-Manager is OUE Hospitality Trust Management Pte. Ltd.. The Trustee-Manager is a
company incorporated on 17 April 2013 in Singapore. The Trustee-Manager has an issued share
capital of S$1.00. The Trustee-Manager has a place of business in Singapore at 333 Orchard
Road #33-00, Singapore 238867.
Powers, Duties and Obligations of the Trustee-Manager
The Trustee-Managers powers, duties and obligations are set out in the OUE H-BT Trust Deed.
The powers and duties of the Trustee-Manager include:
acting as trustee-manager of OUE H-BT and, in such capacity, safeguarding the rights and
interests of the holders of OUE H-BT Units, for example, by satisfying itself that transactions
it enters into for and on behalf of OUE H-BT with an Interested Person or OUE H-BT are
conducted on normal commercial terms, are not prejudicial to the interests of OUE H-BT and
the holders of OUE H-BT Units, and in accordance with all applicable requirements under all
applicable laws, rules and regulations including the BTA and the Listing Manual relating to
the transaction in question;
holding the assets of OUE H-BT on trust for the benefit of the holders of OUE H-BT Units in
accordance with the OUE H-BT Trust Deed;
lending monies out of the assets of OUE H-BT for the benefit of the Stapled Securityholders
as a whole to any stapled entity in accordance with the OUE H-BT Trust Deed and subject
to compliance with the applicable laws, regulations and guidelines; and
exercising all the powers of a trustee-manager and the powers that are incidental to the
ownership of the assets of OUE H-BT.
The Trustee-Manager has covenanted in the OUE H-BT Trust Deed that it will use its best
endeavours to carry on and conduct its business in a proper and efficient manner in the best
interests of the holders of OUE H-BT Units as a whole (subject to, the overriding best interests of
Stapled Securityholders, as permitted under all applicable laws, regulations and guidelines).
In the exercise of its powers, the Trustee-Manager may, subject to the provisions of the OUE H-BT
Trust Deed, acquire or dispose of any real or personal property, borrow and encumber any asset.
The Trustee-Manager may, subject to the provisions of the OUE H-BT Trust Deed, appoint and
engage:
a person or entity to exercise any of its powers or perform its obligations; and
any real estate agents or managers, including an Interested Person, in relation to the
management, development, leasing, purchase or sale of any real estate assets and real
estate-related assets.
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The Trustee-Manager must carry out its functions and duties and comply with all the obligations
imposed on it and set out in the OUE H-BT Trust Deed, the Listing Manual, the SFA, the BTA, the
Tax Ruling and all other applicable laws, regulations and guidelines. It must retain OUE H-BTs
assets, or cause OUE H-BTs assets to be retained, in safe custody and cause OUE H-BTs
accounts to be audited. It can appoint valuers to value the real estate assets and real
estate-related assets of OUE H-BT.
The Trustee-Manager is not personally liable to a holder of OUE H-BT Units in connection with the
office of the Trustee-Manager except in respect of its own fraud, gross negligence, wilful default,
breach of trust or breach of the OUE H-BT Trust Deed or where the Trustee-Manager fails to
exercise Due Care. Any liability incurred and any indemnity to be given by the Trustee-Manager
shall be limited to the assets of OUE H-BT over which the Trustee-Manager has recourse,
provided that the Trustee-Manager has acted without fraud, gross negligence, wilful default,
breach of trust or breach of the OUE H-BT Trust Deed or where the Trustee-Manager fails to
exercise Due Care. The OUE H-BT Trust Deed contains certain indemnities in favour of the
Trustee-Manager under which it will be indemnified out of the assets of OUE H-BT for liability
arising in connection with certain acts or omissions. These indemnities are subject to any
applicable laws.
Resignation or Removal of the Trustee-Manager
The Trustee-Manager may resign or be removed under the following circumstances:
The Trustee-Manager shall only resign in accordance with the relevant laws, regulations and
guidelines and its resignation shall only be upon the appointment of a new Trustee-Manager
(such appointment to be made in accordance with the provisions of the OUE H-BT Trust
Deed); and
The Trustee-Manager may be removed in accordance with the relevant laws, regulations and
guidelines.
(See Management and Corporate Governance OUE H-BT Resignation or Removal of
Changes in the Fees and Charges payable to the Trustee-Manager
An Extraordinary Resolution of the holders of OUE H-BT Units at a meeting convened and held
in accordance with the provisions of the OUE H-BT Trust Deed is required to approve:
any increase in the rate or any change in the structure of the Trustee-Managers
management fee or trustee fee; and
any increase in the rate above the permitted level or any change in the structure of the
Trustee-Managers acquisition fee, divestment fee and development management fee.
Winding-up of OUE H-BT
Under the OUE H-BT Trust Deed, OUE H-BT shall be of indefinite duration. In the event that any
law is passed which renders it illegal or, in the opinion of the Trustee-Manager, impracticable or
inadvisable to continue OUE H-BT, OUE H-BT may, without prejudice to the provisions of the BTA,
be wound up subject to approval by the holders of OUE H-BT Units by way of an Extraordinary
Resolution duly passed by the holders of OUE H-BT Units at a meeting convened by the
Trustee-Manager in accordance with the OUE H-BT Trust Deed.
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Generally, as soon as practicable after the commencement of the winding-up of OUE H-BT, the
Trustee-Manager shall, subject to any authorisations or directions given to it by the holders of
OUE H-BT Units pursuant to the OUE H-BT Trust Deed, sell the OUE H-BT Trust Property and
repay any borrowings incurred on behalf of OUE H-BT in accordance with the OUE H-BT Trust
Deed (together with any interest accrued but remaining unpaid) as well as all other debts and
liabilities in respect of OUE H-BT before distributing the balance of the OUE H-BT Trust Property
to the holders of OUE H-BT Units in accordance with their proportionate interests in the OUE H-BT
Trust Property.
Issue of Stapled Securities
For as long as OUE H-REIT Units are stapled to OUE H-BT Units, the REIT Manager may only
issue OUE H-REIT Units if such issue is accompanied by the issue of OUE H-BT Units. Similarly,
the Trustee-Manager may only issue OUE H-BT Units if such issue is accompanied by the issue
of OUE H-REIT Units. For the avoidance of doubt, both the Managers must satisfy the
requirements under the OUE H-REIT Trust Deed and the OUE H-BT Trust Deed for the issue of
OUE H-REIT and OUE H-BT Units before Stapled Securities can be issued. On the assumption
that OUE H-BT Units will remain stapled to OUE H-REIT Units, see the section The Formation
and Structure of OUE H-Trust Issue of the Stapled Securities above for a discussion on the
issue of Stapled Securities.
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CERTAIN AGREEMENTS RELATING TO OUE H-TRUST, OUE H-REIT,
OUE H-BT AND THE PROPERTIES
The agreements discussed in this section are complex documents and the following is a summary
only. Investors should refer to the agreements themselves to confirm specific information or for a
detailed understanding of OUE H-Trust, OUE H-REIT, OUE H-BT and the Initial Portfolio. Copies
of these agreements are available for inspection at the registered office of the REIT Manager and
the Trustee-Manager at 333 Orchard Road #33-00, Singapore 238867 for a period of six months
from the date of this Prospectus.
RIGHT OF FIRST REFUSAL AGREEMENT
The Sponsor has granted a right of first refusal dated 10 July 2013 to the REIT Trustee and the
Trustee-Manager for so long as:
OUE Hospitality REIT Management Pte. Ltd. or any of its related corporations (as defined in
the Companies Act, Chapter 50 of Singapore) (the Companies Act) remains the manager
of OUE H-REIT;
OUE Hospitality Trust Management Pte. Ltd. or any of its related corporations remains the
trustee-manager of OUE H-BT;
the Sponsor and/or any of its related corporations, alone or in aggregate, remains as a
controlling shareholder
1
of the manager of OUE H-REIT or of the trustee-manager of OUE
H-BT; and
the Sponsor and/or any of its related corporations, alone or in aggregate, remains as a
controlling unitholder
2
of OUE H-REIT and OUE H-BT.
For the purposes of the Sponsor ROFR:
a Relevant Entity means the Sponsor or any of its existing or future subsidiaries or existing
or future private funds managed by the Sponsor (Sponsor Private Funds); and
a Relevant Asset refers to a completed income-producing real estate which is used
primarily for hospitality and/or hospitality-related purposes, where real estate used for
hospitality purposes includes hotels, serviced residences, resorts and other lodging
facilities, whether in existence by themselves as a whole or as part of larger mixed-use
developments, which may include commercial, entertainment, retail and leisure facilities, and
properties which are used for hospitality-related purposes include retail and/or
commercial assets which are either complementary or adjoining to hospitality assets which
are owned by OUE H-REIT or which OUE H-REIT has committed to buy. Where such real
estate is held by a Relevant Entity through a special purpose company, vehicle or entity (a
SPV) established solely to own such real estate, the term Relevant Asset shall refer to
1 A controlling shareholder as defined in the Listing Manual, means a person who:
(i) holds directly or indirectly 15.0% or more of the total number of issued shares (excluding treasury shares) of
a company; or
(ii) in fact exercises control over a company, where control refers to the capacity to dominate decision-making,
directly or indirectly, in relation to the financial and operating policies of a company.
2 A controlling unitholder in relation to a REIT or business trust means:
(i) a person who holds directly or indirectly 15.0% or more of the nominal amount of all voting units in the REIT
or business trust; or
(ii) a person who in fact exercises control over the REIT or business trust.
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the shares or equity interests, as the case may be, in that SPV. Where such real estate is
co-owned by a Relevant Entity as a tenant-in-common, the term Relevant Asset shall refer
to the ownership share of the Relevant Entity in such real estate.
The Sponsor ROFR shall cover any proposed offer by a Relevant Entity to dispose of any interest
in any Relevant Asset which is owned by the Relevant Entity (Proposed Disposal). If the
Relevant Asset (i) is owned jointly by a Relevant Entity together with one or more third parties and
if consent of any of such third parties to offer the Relevant Asset to OUE H-REIT or OUE H-BT is
required or (ii) is owned by the Sponsors subsidiaries or Sponsor Private Funds which are not
wholly-owned by the Sponsor and whose other shareholder(s) or private fund investor(s) is/are
third parties, and if consent from such shareholder(s) or private fund investor(s) to offer the
Relevant Asset to OUE H-REIT or OUE H-BT is required, the Sponsor shall use its best
endeavours to obtain the consent of the relevant third party(ies), other shareholder(s) or private
fund investor(s), failing which the Sponsor ROFR will exclude the disposal of such Relevant Asset.
The Sponsor ROFR shall:
be subject to any prior overriding contractual obligations
1
which the Relevant Entity may
have in relation to the Relevant Assets and/or the third parties that hold these Relevant
Assets;
exclude the disposal of any interest in the Relevant Assets by a Relevant Entity to a related
corporation of such Relevant Entity pursuant to a reconstruction, amalgamation,
restructuring, merger and/or any analogous event or transfer of shares of the Relevant Entity
between the shareholders as may be provided in any shareholders agreement; and
be subject to the applicable laws, regulations and government policies and the listing rules
of the SGX-ST.
In the event that the REIT Trustee (or the Trustee-Manager, as the case may be), fails or do not
wish to exercise the Sponsor ROFR, the Relevant Entity shall be entitled to dispose of its interest
in the Relevant Asset to a third party on terms and conditions no more favourable to the third party
than those offered by the Relevant Entity to the REIT Trustee or the Trustee-Manager, as the case
may be.
However, if the completion of the disposal of the Relevant Assets by the Relevant Entity to the
third party does not occur within 12 months from the date of the written notice of the Proposed
Disposal, any proposal to dispose of such Relevant Asset after the aforesaid 12-month period
shall then remain subject to the Sponsor ROFR.
HEAD LEASE
Mandarin Orchard Singapore and Mandarin Gallery are held by the Vendor as lessee under a
lease granted by The Ngee Ann Kongsi as lessor for 99 years commencing from 1 July 1957 (the
Head Lease).
The Ngee Ann Kongsi in turn is the holder of the freehold estate in Mandarin Orchard Singapore
and Mandarin Gallery under Grant 36 and Grant in Fee Simple 662 from the State (the
Property).
1 Other than any governmental or regulatory approvals or approval from Changi Airport Group (Singapore) Pte. Ltd.
that may be required to transfer Crowne Plaza Changi Airport, there are no such prior overriding contractual
obligations.
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Under the Head Lease from The Ngee Ann Kongsi, the Vendor as the lessee is required, inter alia,
to:
pay all existing and future rates, taxes, assessments, outgoings and impositions imposed on
the Property;
keep in tenantable repair all buildings at any time erected on the Property and all drains,
sewers and conveniences;
not commit any waste or spoil in or upon any part of the Property;
use the plot so as not to cause nuisance or annoyance to neighbouring occupiers;
within one month of any assignment and transfer of the Property or any part thereof, give
notice in writing to the lessor; and
surrender and yield up to the lessor the possession of the Property together with all buildings
thereon, at the expiration or sooner determination of the term.
Certain easement rights were created by predecessors of the owners of the Property and the
property known as 8 Grange Road, Singapore 239695 (being TS-21 Lot 542A) (the Adjoining
Property) and such easement rights run with and are binding on the Property and the Adjoining
Property. The owner of the Property enjoys certain rights of way to pass and repass along, over
and upon the private roads and private driveways in the Adjoining Property, and the owner of the
Adjoining Property enjoys certain rights of way over private roads and private driveways and a
right to use some carpark lots within the Property.
PROPERTY SALE AND PURCHASE AGREEMENT
The REIT Trustee, as trustee of OUE H-REIT, entered into the Property Sale and Purchase
Agreement with the Vendor for the acquisition of the Initial Portfolio together with the plant and
equipment therein at a purchase price which shall be based on the final Offering Price and
determined in accordance with the table below, which shall be subject to a minimum purchase
price of S$1,705 million and a maximum purchase price of S$1,730 million (the Sale
Consideration):
Offering
Price
(S$)
Purchase Price
(S$ millions)
Purchase Price (S$ millions)
Mandarin Gallery
Mandarin Orchard
Singapore
0.880 1,705.0 525.0 1,180.0
0.885 1,711.4 526.3 1,185.2
0.890 1,717.8 527.5 1,190.3
0.895 1,724.3 528.8 1,195.5
0.900 1,730.0 530.0 1,200.0
Under the Property Sale and Purchase Agreement, it is provided, inter alia, that:
the purchase price will be paid in a combination of cash and Consideration Stapled
Securities;
in the event that there is material damage to the Property, OUE H-REIT may elect to
terminate the Property Sale and Purchase Agreement. In the event there is damage to the
269
Property which is not material damage, the Vendor would be obliged to rectify the damage
at its own cost and expense prior to completion or, if this is not possible, as soon as
practicable after completion. The threshold for material damage is 20% of the total
reinstatement cost of the Property at or around the time of the occurrence of the damage, as
determined by a loss adjuster appointed by the Vendor;
the completion of the sale and purchase is subject to and conditional upon the approval of
the Vendors shareholders being obtained by, and the listing of and commencement of
trading of the Stapled Securities on the SGX-ST on, the Listing Date;
the Vendor is required, at its own cost, to carry out and complete certain works to upgrade
Mandarin Orchard Singapore, including the construction of additional hotel rooms, by no
later than 31 March 2014;
if, at any time prior to completion, the Singapore government acquires or gives notice of the
compulsory acquisition or intended compulsory acquisition affecting Meritus Mandarin
Building, OUE H-REIT shall be entitled to rescind the sale and purchase, without prejudice
to its other rights (including the right to claim damages); and
on completion, Mandarin Orchard Singapore will be leased by the REIT Trustee to the Master
Lessee (see below). All tenancies which are not within Mandarin Orchard Singapore will be
assigned and/or novated by the Vendor to OUE H-REIT. Concurrently with the assignment
and/or novation of such tenancies, the tenancy security deposits held by the Vendor in
relation thereto will be transferred and all guarantees covering such tenancy security
deposits will be assigned and/or novated to OUE H-REIT.
In addition, under the Property Sale and Purchase Agreement, certain limited representations and
warranties are made by the Vendor relating to the Property. Claims for breach of warranties are
subject to an aggregate maximum limit, and must be made within 18 months after the completion
of the sale and purchase. The maximum aggregate liability of the Vendor in respect of the claims
shall not exceed the Sale Consideration. If, prior to completion, it is found that there is a material
breach of warranty by the Vendor, OUE H-REIT shall be entitled to rescind the sale and purchase,
without prejudice to its other rights including the right to claim damages.
MASTER LEASE AGREEMENT
On completion of the sale and purchase on the Listing Date, the REIT Trustee, as trustee of OUE
H-REIT, will enter into the Master Lease Agreement with the Sponsor as the Master Lessee,
pursuant to which the REIT Trustee will lease Mandarin Orchard Singapore to the Master Lessee.
The term of the Master Lease Agreement is for a period of 15 years, with an option for the Master
Lessee to obtain an additional lease for a further term of 15 years on the same terms and
conditions, save for amendments required due to a change in law and without any further option
to renew.
The Master Lessee is required to pay rent on a monthly basis in arrears on the last day of the
following month, which rent shall comprise:
a Fixed Rent of S$45.0 million per annum; and
a Variable Rent computed based on the sum of 33.0% of the Hotels Gross Operating
Revenue and 27.5% of the Hotels Gross Operating Profit for the prevailing financial year,
less the Fixed Rent.
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Should the calculation of the Variable Rent yield a negative figure, the Variable Rent will be
deemed to be zero.
The quantum of the Variable Rent will be adjusted at the end of each financial year based on the
audited profit and loss statement of Mandarin Orchard Singapore for such financial year.
If Mandarin Orchard Singapore is damaged or destroyed, the Master Lessee is not liable to pay
rent for the period that Mandarin Orchard Singapore cannot be used, and if part of Mandarin
Orchard Singapore is still useable, the Master Lessees liability to pay rent is adjusted such that:
if the total reinstatement costs for the part(s) of Mandarin Orchard Singapore so damaged or
destroyed (as estimated by a qualified and independent quantity surveyor) exceeds 25.0%
of the total reinstatement cost for the part(s) of Mandarin Orchard Singapore so damaged or
destroyed (as estimated by a qualified and independent quantity surveyor) of Mandarin
Orchard Singapore at or around the time of the occurrence of the damage, as determined by
a loss adjuster appointed by the Master Lessor, in respect of the period from the date such
damage occurred until the date of completion of restoration and reinstatement, the Master
Lessee will pay a reduced rent equivalent to the sum of (a) 33.0% of the Gross Operating
Revenue and 27.5% of the Gross Operating Profit for such period less an amount equivalent
to half the Fixed Rent for such period and (b) an amount equivalent to half of the Fixed Rent
for such period; and
if the total reinstatement costs for the part(s) of Mandarin Orchard Singapore so damaged or
destroyed (as estimated by a qualified and independent quantity surveyor) does not exceed
25.0% of the total reinstatement cost of Mandarin Orchard Singapore at or around the time
of the occurrence of the damage, as determined by a loss adjuster appointed by the Master
Lessor, in respect of the period from the date such damage occurred until the date of
completion of restoration and reinstatement, the Master Lessee will continue to pay the rent
for such period, without any abatement of the Fixed Rent amount.
The Master Lessee will provide a security deposit, by way of cash or bank guarantee, of an
amount equivalent to six months of the monthly Fixed Rent.
The FF&E in Mandarin Orchard Singapore at the commencement date of the Master Lease
Agreement and the FF&E acquired or replaced by the Master Lessee during the term of the Master
Lease Agreement will be the property of the Master Lessee, subject to the condition that the title
to the FF&E items which are owned by the Master Lessee and still in use shall, at the option of
the Master Lessor, be transferred to the Master Lessor at the end of the Master Lease Agreement
for S$1.00.
For each financial year, the Master Lessee is required to set aside in the FF&E reserve an amount
equivalent to a specified percentage of the anticipated Gross Operating Revenue for such
financial year to be utilised in accordance with an annual FF&E plan approved by the Master
Lessor. Any unutilised balance in the FF&E reserve at the end of a financial year must be carried
forward and made available in the next financial year but this shall not reduce the required
contribution to the FF&E reserve in the next financial year. Where the total expenditure by the
Master Lessee in any financial year is in excess of the unutilised balance in the FF&E reserve, the
excess shall be carried forward and debited against the contribution to the FF&E reserve in the
next financial year. All unutilised amounts standing to the credit of the FF&E reserve (i) at the end
of the first 10 years of each term, (ii) at the end of each term, and (iii) at the end or earlier
termination of the Master Lease, will be the property of OUE H-REIT and shall be paid in cash by
the Master Lessee to the OUE H-REIT or as otherwise directed by OUE H-REIT.
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All items of Operating Equipment which are acquired or replaced by the Master Lessee during the
term of the Master Lease Agreement, shall be the property of the Master Lessee subject to the
condition that the title to the Operating Equipment items which are owned by the Master Lessee
and still in use shall be transferred to the Master Lessor at the end of the Master Lease Agreement
at the net book value or S$1.00, whichever is the higher.
The Master Lessee must submit to the REIT Manager for review and approval by no later than 45
days prior to the commencement of the preceding financial year, an annual budget for that
financial year which includes, inter alia, a proposed capital budget for capital improvements. In
respect of such proposed capital budget, the Master Lessor is not obliged to undertake any
expenditure for capital improvements unless (i) it is approved in writing by the REIT Manager, or
(ii) such capital improvements are (a) required to comply with any directive, order or requirement
of any relevant government authorities or (b) required to meet safety or health requirements
relating to Mandarin Orchard Singapore, or (iii) in certain emergency cases.
The Master Lessee is required to enter into the Hotel Management Agreement with Singapore
Mandarin International Hotels Pte Ltd (or such related company of OUE, as may be appointed by
the Master Lessee) and is not permitted to terminate or assign the Hotel Management Agreement
(other than to a related company of OUE) or waive any breach or default under the Hotel
Management Agreement without the consent of the Master Lessor.
The Master Lessee must, at its cost, repair and maintain Mandarin Orchard Singapore, its
infrastructure, plant and equipment in good and substantial repair and working order required for
the operation of Mandarin Orchard Singapore but the Master Lessee is not responsible for works
which are in the nature of capital improvements. The Master Lessee must, at its cost, repair and
replace all FF&E and Operating Equipment required for the operations of Mandarin Orchard
Singapore.
All necessary licences and permits must be obtained and maintained by the Master Lessee at its
cost.
The Master Lessee must, at its cost, take out and maintain public liability insurance policy,
insurance relating to workers compensation and other staff related insurance in respect of any
works undertaken or carried out by the Master Lessee. The Master Lessor will take out and
maintain, at its cost, property insurance policies insuring Mandarin Orchard Singapore against
property damage, including (i) the infrastructure, plant and equipment, (ii) public liability, (iii)
terrorism and (iv) the contents of Mandarin Orchard Singapore, and business interruption policy
for the respective rights and interests of the Master Lessor (as lessor), and the Master Lessee (as
lessee). The Master Lessee is required to pay the insurance premium in respect of the business
interruption policy attributable to the insurance coverage for the Master Lessees interests.
In the event Mandarin Orchard Singapore or any part(s) thereof is damaged or destroyed such that
the total reinstatement costs for such damage and destruction (as estimated by a qualified and
independent quantity surveyor) exceeds 50% of the total reinstatement cost for such damage and
destruction (as estimated by a qualified and independent quantity surveyor) of Mandarin Orchard
Singapore at or around the time of the occurrence of the damage, as determined by a loss adjuster
appointed by the Master Lessor, either party may terminate the Master Lease Agreement by giving
at least 20 business days notice to the other party. If the damage or destruction does not satisfy
the above threshold, the Master Lessor must use the insurance proceeds which it receives to
reinstate Mandarin Orchard Singapore to the condition existing immediately prior to the
occurrence of the Damage or Destruction as far as practicable and to the extent possible with the
available insurance proceeds received by the Master Lessor.
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The Master Lessor may sell or assign its interest in Mandarin Orchard Singapore subject to the
terms of the Master Lease Agreement. The Master Lessor may also sell or assign its interest in
Mandarin Orchard Singapore at any time free and clear of the Master Lease Agreement and such
sale or assignment will not be subject to the Master Lease Agreement if the Master Lessor
terminates the Master Lease Agreement with written notice to the Master Lessee and pays the
Master Lessee a termination fee equal to the fair market value of the Master Lessees leasehold
interest in the remaining term and the option term. The fair market value is computed on the
present value of A for each year of the unexpired term and the option term using a discount rate
of 7.0%, where A means a per annum amount which is the average of the adjusted gross
operating profit of Mandarin Orchard Singapore for the three financial years preceding the
completion of such sale, or if the completion of such sale occurs before three financial years of
the master lease term have elapsed, then A means a per annum amount which is the average
of the adjusted gross operating profit of Mandarin Orchard Singapore during the preceding
financial years that have elapsed, and adjusted gross operating profit in respect of a financial
year means the gross operating profit of Mandarin Orchard Singapore for that financial year less
the rent (comprising Fixed Rent and Variable Rent) payable to the Master Lessor for that financial
year and less the amount to be contributed by the Master Lessee to the FF&E reserve for that
financial year.
The Board of Directors of the Managers is of the view that the termination fee is fair and
reasonable. It applies only when the OUE H-REIT wishes to sell the Hotel with vacant possession
and such termination fee is not payable when it sells the Hotel subject to the Master Lessees
interest. The purpose of the compensation fee is to provide OUE H-REIT with flexibility to sell the
Hotel without the lease where it is in the interests of the Stapled Securityholders to do so.
In addition, the REIT Manager is of the view that the long-term master lease arrangement, which
has an initial lease term of 15 years with an option to renew for a further term of 15 years,
originates from the specialised nature of hotel assets. Such a long-term commitment in the form
of a Master Lease provides Stapled Securityholders with stability and certainty of cashflows. By
providing a minimum rent, the Master Lessee reduces operating risk for OUE H-REIT and
consequently needs to be compensated with economic profits from the hotel during the lease
term. Given the nature of hotel operations and the long-term commitment and protection provided
to OUE H-REIT, it would not be equitable to the Master Lessee if OUE H-REIT were not liable to
pay a termination fee equivalent to the foregone economic profits for the remaining lease term.
Based on the foregoing, the REIT Manager is of the view that the termination fee arrangement to
terminate the long-term master lease arrangement is not prejudicial to OUE H-REIT.
SHARED SERVICES AGREEMENT
Under the Shared Services Agreement to be entered into between the Master Lessee and the
REIT Trustee as trustee of OUE H-REIT, the Master Lessee will provide or procure provision of
certain services for the whole of the premises comprised in the Property including but not limited
to Mandarin Orchard Singapore. The services to be provided includes, but are not limited to,
cleaning and maintenance services, fire alarm system maintenance, lifts and elevators
maintenance, waste disposal services, provision of security services, chiller plant maintenance,
air-conditioning maintenance and/or such other services as may be agreed between the parties.
OUE H-REIT will pay to the Master Lessee monthly, a share of the costs of the applicable services
provided to and attributable to Mandarin Gallery and the Excluded Commercial Premises, based
on an agreed proportion of the total costs and expenses incurred
1
.
1 The basis for the sharing of costs varies for different services. For example, cost sharing may be based on the ratio
of headcount, or the ratio of gross floor area between Mandarin Gallery and Mandarin Orchard Singapore. For the
avoidance of doubt, there will be no mark-up on the cost charged by the Master Lessee to OUE H-REIT.
273
SHARED ELECTRICITY SERVICES AGREEMENT
Under the Shared Electricity Services Agreement to be entered into between the Master Lessee
and the REIT Trustee as trustee of OUE H-REIT, the Master Lessee will purchase electricity under
an electricity agreement for the whole of the premises comprised in the Property including but not
limited to Mandarin Orchard Singapore. OUE H-REIT will pay to the Master Lessee for electricity
supplied to Mandarin Gallery and the Excluded Commercial Premises, for usage taking into
account the amount of electricity supplied thereto.
PROPERTY MANAGEMENT AGREEMENTS
Master Property Management Agreement
Mandarin Gallery and any specific commercial areas in Mandarin Orchard Singapore which are
not subject to the Master Lease Agreement (the Excluded Commercial Premises) and any
excluded commercial premises, whether located in Singapore or any other jurisdiction, which are
subsequently acquired by OUE H-REIT, whether such commercial premises are directly or
indirectly held by OUE H-REIT, or are wholly or partly owned by OUE H-REIT, will be managed by
the Property Manager, or a subsidiary of the Sponsor, or a property manager of reputable
standing, in accordance with the terms of the Master Property Management Agreement and the
individual property management agreements entered into.
The Property Manager is jointly appointed by the REIT Trustee and the REIT Manager pursuant
to the Master Property Management Agreement. The Master Property Management Agreement
was entered into on 10 July 2013 by the REIT Trustee, the REIT Manager and the Property
Manager pursuant to which the Property Manager and/or its subsidiaries was appointed to
operate, maintain, manage and market Mandarin Gallery and the Excluded Commercial Premises.
The Property Manager and/or the relevant subsidiary so appointed will be subjected to the overall
management and supervision of the REIT Manager and subject to the terms and conditions of the
Master Property Management Agreement and the Individual Property Management Agreement.
The Master Property Management Agreement provides that in respect of each new excluded
commercial premises which is subsequently acquired by the REIT Trustee (whether directly or
indirectly), the REIT Trustee, the REIT Manager and the SPV that owns the new excluded
commercial premises will enter into a separate individual property management agreement with
the Property Manager or a subsidiary of the Sponsor or a property manager of reputable standing.
in the form and on terms substantially similar to those set out in the schedule to the Master
Property Management Agreement. The termination of the Master Property Management
Agreement will not affect the individual property management agreements entered into.
The initial term of the Master Property Management Agreement is 15 years from the Listing Date.
The Property Manager may request in writing to the REIT Trustee and the REIT Manager to extend
its appointment as the property manager for a further 15 years on the same terms and conditions
six months prior to the expiration of the initial term of the Master Property Management Agreement
except that such extension shall be subject to the approval of the holders of OUE H-REIT Units
if such approval is required pursuant to the OUE H-REIT Trust Deed or any applicable legislation
or regulations (including regulatory requirements relating to interested person/party transactions
relating to REITs).
Individual Property Management Agreement
The Individual Property Management Agreement for Mandarin Gallery and the Excluded
Commercial Premises will be entered into by the REIT Trustee, the REIT Manager and the
Property Manager on Listing Date pursuant to which the Property Manager was appointed to
operate, maintain, manage and market Mandarin Gallery and the Excluded Commercial Premises,
274
subject to the terms and conditions of the Individual Property Management Agreement. The
Property Manager will be subject to the overall management and supervision by the REIT
Manager.
The initial term of the Individual Property Management Agreement is 15 years from the Listing
Date.
Six months prior to expiry of the initial term of the Individual Property Management Agreement, the
Property Manager may request to extend its appointment for a further 15 years on the same terms
and conditions, except for revision of all fees payable to the Property Manager to revised rates
determined by the REIT Trustee based on the recommendation of the REIT Manager, having
regard to prevailing market rates.
The REIT Trustee shall, based on the recommendation of the REIT Manager, agree to extend the
appointment of the Property Manager for the extension term, on the revised fees determined as
aforesaid, subject to the approval of the holders of OUE H-REIT Units if such approval is required
pursuant to the OUE H-REIT Trust Deed or any applicable legislation or regulations.
The REIT Trustee shall not be obliged to extend the appointment of the Property Manager if the
above conditions are not fulfilled.
Six months before expiry of the initial term, the REIT Trustee will decide the prevailing market
rates for the extension term, based on the recommendation of the REIT Manager. If the Property
Manager disagrees with the decision of the REIT Trustee on the prevailing market rates for the
extension term, the dispute shall be referred for determination by an expert in accordance with the
terms of the Individual Property Management Agreement.
Property Managers Services
The services provided by the Property Manager for Mandarin Gallery and the Excluded
Commercial Premises include the following:
property management services, recommending third party contracts for provision of property
maintenance services, supervising the performance of contractors and ensuring compliance
with building and safety regulations;
lease management services, including coordinating tenants fitting-out requirements,
administration of rental collection, management of rental arrears, and administration of all
property tax matters, arranging for adequate insurances; and
marketing and marketing coordination services, including managing public relations,
initiating lease renewals and negotiation of terms.
Fees
Under the Individual Property Management Agreement, the Property Manager is entitled to the
property management fees set out below, to be borne out of OUE H-REIT.
Property Management Fees
The Property Manager is entitled to a property management fee for Mandarin Gallery and the
Excluded Commercial Premises which comprises the following:
2.0% per annum of gross revenue for Mandarin Gallery and the Excluded Commercial
Premises;
275
2.0% per annum of the net property income for Mandarin Gallery and the Excluded
0.5% per annum of the net property income for Mandarin Gallery and the Excluded
1
.
Expenses
The Property Manager is authorised to utilise funds deposited in an operating account maintained
in the name of the REIT Trustee to make payment for all costs and expenses incurred in the
operation, maintenance, management and marketing of Mandarin Gallery and the Excluded
Commercial Premises within the annual budget approved by the REIT Trustee and the REIT
Manager.
Provision of Office Space
Where applicable, the REIT Trustee or the REIT Manager shall permit the staff members of the
Property Manager to occupy suitable office space at Mandarin Gallery (as approved by the REIT
Trustee based on the recommendation of the REIT Manager) without the Property Manager being
required to pay any rent, service charge, utility charges or other sums in respect thereof.
Termination
The REIT Trustee or the REIT Manager may terminate the appointment of the Property Manager
in relation to Mandarin Gallery and the Excluded Commercial Premises on the occurrence of
certain specified events, which include the liquidation or cessation of business of the Property
Manager.
The REIT Trustee or the REIT Manager may also terminate the appointment of the Property
Manager without cause by giving three months written notice to the Property Manager. In the
event of a sale of Mandarin Gallery and/or the Excluded Commercial Premises, the REIT Trustee
or the REIT Manager may terminate the appointment of the Property Manager by giving not less
than 30 days prior written notice to the Property Manager.
In addition, if the Property Manager, the REIT Trustee or the REIT Manager, as the case may be,
within 90 days of receipt of written notice, fails to remedy any breach (which is capable of remedy)
of its obligations, the party who is not in breach may terminate the appointment of the Property
Manager upon giving 30 days written notice to the party in breach.
On the termination of the appointment of the Property Manager, the REIT Manager shall, as soon
as practicable, procure the appointment of a replacement property manager for Mandarin Gallery
and the Excluded Commercial Premises.
Manager and/or third party agents. All other fees and/or commissions payable to third parties arising from rendering
services to Mandarin Gallery and the Excluded Commercial Premises will be borne by OUE H-Trust of OUE H-REIT
with the prior approval of the REIT Manager and REIT Trustee.
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Assignability
The REIT Trustee and the REIT Manager are entitled to novate their respective rights, benefits
and obligations under the Individual Property Management Agreement to a new trustee of OUE
H-REIT or a new manager of OUE H-REIT appointed in accordance with the terms of the OUE
H-REIT Trust Deed. The Property Manager is also entitled to novate its respective rights, benefits
and obligations under the Individual Property Management Agreement to a related company (as
defined in the Companies Act) of the Sponsor.
Exclusion of Liability
In the absence of fraud, negligence, default or breach of the Individual Property Management
Agreement by the Property Manager, it shall not incur any liability by reason of any error of law
or any matter or thing done or suffered or omitted to be done by it in good faith under the Individual
Property Management Agreement.
In addition, the REIT Trustee shall indemnify the Property Manager against any actions, costs,
claims, damages, expenses or demands to which it may suffer or incur as Property Manager, save
where such action, cost, claim, damage, expense or demand is occasioned by the fraud,
negligence, default or breach of the Individual Property Management Agreement by the Property
Manager, its staff members or agents.
No Restriction on Property Manager
The Property Manager may provide services similar to those contemplated under the Individual
Property Management Agreement to other parties operating in the same or similar business as
OUE H-REIT, or in other businesses, save that it shall take all reasonable or necessary steps to
minimise or resolve any conflicts of interests which may arise thereto.
LICENCE AGREEMENT
Pursuant to a licence agreement entered into between the Sponsor and the Managers on 10 July
2013 (the Licence Agreement), in consideration for the payment of a nominal sum of S$1.00,
the Sponsor has granted a non-exclusive, non-transferable licence to the Managers, the OUE
name and related logos for use in connection with the business of OUE H-Trust.
The licence became effective from the date of the Licence Agreement and may be terminated by
the Sponsor giving at least three months notice in writing to the Managers in the event that the
(i) the REIT Manager or any of its related corporations ceases to be the manager of OUE H-REIT
and (ii) the Trustee-Manager or any of its related corporations ceases to be trustee-manager of
OUE H-BT.
Under the Licence Agreement, the Managers as licensees shall use their best endeavours at all
times during the term of the Licence Agreement to create, promote and retain goodwill in the
business utilising the trade marks.
MANDARIN GALLERY LICENCE AGREEMENT
Pursuant to a licence agreement entered into between the Sponsor and the REIT Trustee on 10
July 2013 (the Mandarin Gallery Licence Agreement), in consideration for the payment of a
nominal sum of S$1.00, the Sponsor has granted a non-exclusive, non-transferable licence to the
REIT Trustee for the use of the Mandarin Gallery name and related logos in connection with the
business of OUE H-Trust.
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The licence became effective from the date of the Mandarin Gallery Licence Agreement and may
be terminated by the Sponsor (i) giving at least three months notice to the REIT Trustee in the
event that the REIT Manager or any of its related corporations ceases to be the manager of OUE
H-REIT and the Trustee-Manager or any of its related corporations ceases to be trustee-manager
of OUE H-BT, or (ii) upon giving of at least three months notice in writing to the REIT Trustee.
Either party may also give notice in writing to the other party terminating the Mandarin Gallery
Licence Agreement with immediate effect if the other Party commits any material breach of any of
the terms of the Mandarin Gallery Licence Agreement or (if such a breach is remediable) fails to
remedy that breach within thirty (30) days from the date of that Party being notified of the breach.
The licence will last for an indefinite term until terminated under the provision of the Mandarin
Gallery Licence Agreement.
Under the Mandarin Gallery Licence Agreement, the REIT Trustee as licensee shall use its best
endeavours at all times during the term of the Mandarin Gallery Licence Agreement to create,
promote and retain goodwill in the business utilising the trade marks.
The Mandarin Gallery trademark belongs to the Sponsor and the Sponsor wants to have the
freedom to dispose of the trademarks. The Sponsor may exercise the right to terminate the
Mandarin Gallery Licence Agreement when the Sponsor wishes to sell or dispose of the Mandarin
Gallery trademark. In the event that the Mandarin Gallery Licence Agreement is terminated, this
will not have an impact on OUE H-REIT as this is just a name and the property can easily take up
another name.
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TAXATION
The following summary of certain Singapore tax consequences of the purchase, ownership and
disposition of the Stapled Securities is based upon laws, regulations, rulings and decisions now
in effect, all of which are subject to change (possibly with retroactive effect).
The summary does not purport to be a comprehensive description of all the tax considerations that
may be relevant to a decision to purchase, own or dispose of the Stapled Securities and does not
purport to deal with the consequences of application to all categories of investors, some of whom
may be subject to special rules.
Investors should consult their own tax advisers concerning the application of Singapore income
tax laws to their particular situations as well as any consequences of the purchase, ownership and
disposition of the Stapled Securities arising under the laws of any other taxing jurisdiction.
SINGAPORE TAX
OUE H-REIT is expected to derive rental and ancillary income from the Initial Portfolio. In this
regard, the IRAS has issued the Tax Ruling on the taxation of income derived from the Initial
Portfolio by OUE H-REIT and Stapled Securityholders.
In accordance with the Tax Ruling, the Singapore income tax consequences of OUE H-REIT and
that of Stapled Securityholders are described below.
Taxation of OUE H-REIT
Income from the Initial Portfolio
Subject to meeting the terms and conditions of the Tax Ruling, the REIT Trustee will not be taxed
on its Taxable Income. Instead, the REIT Trustee and the REIT Manager would undertake to
deduct income tax at the prevailing corporate tax rate on distributions made to Stapled
Securityholders that are made out of OUE H-REITs Taxable Income in the financial year the
income is derived. However, to the extent that the beneficial owner is an individual or a qualifying
Stapled Securityholder (Qualifying Stapled Securityholder), the REIT Trustee and the REIT
Manager will make the distributions without deducting any income tax. Also, to the extent that the
beneficial owner is a foreign non-individual Stapled Securityholder, the REIT Trustee and the REIT
Manager would undertake to deduct income tax at the reduced rate of 10.0% for distributions
made up to 31 March 2015.
A Qualifying Stapled Securityholder refers to a Stapled Securityholder who is:
a company incorporated and tax resident in Singapore;
a non-corporate entity (excluding a Singapore partnership) that is registered or constituted
in Singapore, such as:
(i) an institution, an authority, a person or a fund specified in the First Schedule of the
Income Tax Act;
(ii) a co-operative society registered under the Co-operative Societies Act, Chapter 62 of
Singapore;
(iii) a trade union registered under the Trade Unions Act, Chapter 333 of Singapore;
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(iv) a charity registered under the Charities Act, Chapter 37 of Singapore or established by
an Act of Parliament; and
(v) a town council; or
a Singapore branch of a foreign company which has obtained a letter of approval from the
IRAS granting a waiver from tax deducted at source in respect of distributions from OUE
H-REIT.
A foreign non-individual Stapled Securityholder is one who is not a resident of Singapore for
Singapore income tax purposes and:
who does not have a permanent establishment in Singapore; or
who carries on any operation in Singapore through a permanent establishment in Singapore,
where the funds used to acquire the Stapled Securities are not obtained from that operation
in Singapore.
To obtain distributions free of tax deduction at source, or at the reduced rate of 10.0%, Qualifying
Stapled Securityholders or foreign non-individual Stapled Securityholders must disclose their
respective tax status in a prescribed form provided by the REIT Trustee and the REIT Manager.
(See Appendix F, Independent Taxation Report for further details.)
Where the Stapled Securities are held in joint names, the REIT Trustee and the REIT Manager will
deduct income tax from the distributions made out of OUE H-REITs Taxable Income to the
nominee at the prevailing corporate tax rate, unless all the joint owners are individuals.
Where the Stapled Securities are held through a nominee, the REIT Trustee and the REIT
Manager will deduct income tax from the distributions made out of OUE H-REITs Taxable Income
at the prevailing corporate tax rate except in certain circumstances, including:
where the nominee can demonstrate that the Stapled Securities are held for beneficial
owners who are individuals or Qualifying Stapled Securityholders for which the REIT Trustee
and the REIT Manager would not deduct any tax from the distributions. The nominee should
make a declaration of the status of the beneficial owners of the Stapled Securities and
provide certain particulars of the beneficial owners of the Stapled Securities to the REIT
Trustee and the REIT Manager in a prescribed form provided by the REIT Trustee and the
REIT Manager; and
owners who are foreign non-individual Stapled Securityholders, for which the REIT Trustee
and the REIT Manager would deduct/withhold tax at the reduced tax rate of 10.0% from
distributions made up to 31 March 2015. The nominee should make a declaration of the
status of the beneficial owners of the Stapled Securities and provide certain particulars of the
beneficial owners of the Stapled Securities to the REIT Trustee and the REIT Manager in a
prescribed form provided by the REIT Trustee and the REIT Manager.
OUE H-REIT will distribute 100.0% of its Taxable Income for the period from the Listing Date to
31 December 2014. Thereafter, OUE H-REIT will distribute at least 90.0% of its Taxable Income
(other than gains on sale of real properties). Any amount of Taxable Income not distributed
(Retained Taxable Income) will be assessed to Singapore income tax at the prevailing
corporate tax rate, and the tax assessed will be collected from the REIT Trustee on such amount.
In the event of any subsequent distribution made out of such after tax Retained Taxable Income
by OUE H-REIT, the REIT Trustee and the REIT Manager will not have to make a further deduction
of income tax from the distribution made.
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Terms and Conditions of the Tax Ruling
The application of the Tax Ruling is conditional upon the REIT Trustee and the REIT Manager
fulfilling certain terms and conditions. The REIT Trustee and the REIT Manager are required to
take all reasonable steps necessary to safeguard the IRAS against tax leakages and to comply
with all administrative requirements to ensure ease of tax administration.
The IRAS has expressly reserved the rights to review, amend and revoke the Tax Ruling either in
part or in whole at any time.
(See Risk Factors Risks Relating to an Investment in the Stapled Securities OUE H-REIT may
be unable to comply with the terms of the Tax Ruling or the Tax Ruling may be revoked or
amended for further details.)
Taxation of OUE H-BT
OUE H-BT which is registered as a business trust in Singapore under the BTA will be treated like
a company under the one-tier corporate tax system for Singapore income tax purposes.
Consequently, OUE H-BT will be assessed to Singapore income tax on its profits, if any, at the
prevailing corporate tax rate, like any other company, in accordance with the Income Tax Act.
Taxation of Stapled Securityholders
OUE H-REIT Distributions
Individuals who hold the Stapled Securities as investment assets
Individuals who hold the Stapled Securities as investment assets (excluding individuals who hold
such Stapled Securities through a partnership in Singapore) are exempt from Singapore income
tax on the distributions (excluding distributions made out of franked dividends) made by OUE
H-REIT, regardless of the individuals nationality or tax residence status.
Distributions made out of tax-exempt income and/or income previously taxed at the Trustee level
(i.e. distributions made out of Retained Taxable Income or out of gains or profits taxed as trading
gains under Section 10(1)(a) of the Income Tax Act) will also be exempt from tax in the hands of
such individuals.
Distributions made out of gains or profits arising from a disposal of properties that have been
confirmed by the IRAS as capital gains are not taxable in the hands of individual Stapled
Securityholders.
Individuals who hold the Stapled Securities as trading assets or through a partnership in
Singapore
Singapore are subject to Singapore income tax on the gross amount of distributions that are made
out of OUE H-REITs Taxable Income. Such distributions will be taxed in the hands of the
individuals at their applicable income tax rates.
Distributions made out of tax-exempt income and/or income previously taxed at OUE H-REITs
level (i.e. distributions made out of Retained Taxable Income or out of gains or profits taxed as
trading gains under Section 10(1)(a) of the Income Tax Act) will not be subject to tax when
received by the individual Stapled Securityholders.
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confirmed by the IRAS as capital gains will also not be taxed in the hands of those individuals who
hold the Stapled Securities as trading assets.
Non-individuals
Non-individual Stapled Securityholders are subject to Singapore income tax on the gross amount
of distributions that are made out of OUE H-REITs Taxable Income, unless specifically exempted,
irrespective of whether or not tax has been deducted from the distributions by the REIT Manager
and the REIT Trustee.
Where tax has been deducted at source at the prevailing corporate tax rate (currently at 17.0%),
the tax deducted is not a final tax. Non-individual Stapled Securityholders can use such tax
deducted at source as a set off against their Singapore income tax liabilities.
received by the non-individual Stapled Securityholders.
confirmed by the IRAS as capital gains are not taxable in the hands of non-individual Stapled
Securityholders.
Distributions made by OUE H-REIT to foreign non-individual Stapled Securityholders will be
subject to tax at the reduced rate of 10.0% for distributions made up to 31 March 2015. The
reduced rate of 10.0% will also apply to distributions made to nominee Stapled Securityholders if
they can demonstrate that the beneficial owners of the Stapled Securities are qualifying foreign
non-individual investors.
OUE H-BT Distributions
Distributions made by OUE H-BT out of its profits, if any, to Stapled Securityholders will be treated
like one-tier dividends. Such distributions will be exempt from Singapore income tax in the hands
of Stapled Securityholders, regardless of their respective status.
Disposal of the Stapled Securities
Any gains on disposal of the Stapled Securities are not liable to tax provided the Stapled
Securities are not held as trading assets.
Other relevant taxes
Singapore GST
GST registration of OUE H-REIT
OUE H-REIT could be registered in Singapore for GST on the basis that it would derive rental
income from the leasing of the Hotel and the Mall in Singapore, which constitutes a taxable supply
for GST purposes.
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GST registration of OUE H-BT
OUE H-BT could not be registered in Singapore for GST on the basis that it is currently dormant
and does not derive any taxable supplies. However, in the event that it subsequently undertakes
activities and derives taxable supplies, it would be eligible for GST registration.
Issue and transfer of Stapled Securities
The issue or transfer of ownership of a unit under any unit trust in Singapore is exempt from GST.
Hence, Stapled Securityholders would not incur any GST on the subscription of the Stapled
Securities. The subsequent disposal of the Stapled Securities by Stapled Securityholders is also
exempt from GST.
Recovery of GST incurred by Stapled Securityholders
Generally, services such as legal fees, brokerage, handling and clearing charges rendered by a
GST-registered person to Stapled Securityholders belonging in Singapore in connection with their
purchase and sale of the Stapled Securities would be subject to GST at the prevailing
standard-rate of 7.0%. Similar services rendered to Stapled Securityholders belonging outside
Singapore could be zero-rated when certain conditions are met.
For Stapled Securityholders belonging in Singapore who are registered for GST, any GST on
expenses incurred in connection with the subscription/acquisition or disposal of the Stapled
Securities is generally not recoverable as input tax credit from the IRAS unless certain conditions
are satisfied. These GST-registered Stapled Securityholders should seek the advice of their tax
advisors on these conditions.
Stamp Duty
By virtue of the Stamp Duty (Real Estate Investment Trust) (Remission) Rules 2010, stamp duty
on any contract or agreement or investment entered into prior to or on 31 March 2015 relating to
the transfer of Singapore properties; and 100% of the issued share capital of Singapore
incorporated companies that hold immovable properties situated outside Singapore to real estate
investment trusts to be listed or already listed on the SGX-ST would be remitted.
As such, stamp duty will be remitted on the contracts for the sale and purchase of Singapore
properties; and 100% of the issued share capital of Singapore incorporated companies that hold
immovable properties situated outside Singapore to OUE H-REIT where the contract or
agreement or investment was entered into prior to or on 31 March 2015.
The Commissioner of Stamp Duties has confirmed that based on certain terms of the OUE H-REIT
Trust Deed:
(a) the sale, purchase and transfer of the Stapled Securities is not subject to stamp duty; and
(b) in the event of a change in the REIT Trustee, stamp duty on any document effecting the
appointment of a new trustee and the transfer of trust assets from the incumbent trustee to
the new trustee will not be subject to stamp duty.
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Property Taxes
Property tax is assessed on immovable property and is payable in advance in January by the
landowner or the registered leaseholder. It is generally computed as a percentage of the annual
value of all houses, land, buildings and tenements. The annual value is the gross amount at which
the property can reasonably be expected to be let from year to year having regard to the fact that
all outgoings and maintenance are borne by the landlord.
For hotel properties, property tax is payable at 10.0% of the total annual value of the hotel
property. Hotel properties generally comprise hotel rooms and other areas that are not used as
hotel rooms, such as F&B outlets, function rooms, retail shops and carparks, which are
assessable for property tax purposes.
The annual value of hotel rooms is assessed on a fixed percentage of gross hotel room receipts
for the preceding year. With effect from 1 January 2011, the annual value of hotel rooms will be
set at 25.0% of the preceding years gross room receipts.
The annual values of other areas assessable to tax are based on their estimated prevailing market
rentals, derived using valuation methods such as rental comparison or profits method. In
estimating the market rent of the property using market rents of comparable properties, the Chief
Assessor of the IRAS will take into account factors such as size, location, and other physical
attributes of the property.
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PLAN OF DISTRIBUTION
The Managers are making an offering of 434,598,000 Stapled Securities (representing 33.2% of
the total number of Stapled Securities in issue after the Offering) for subscription at the Offering
Price under the Placement Tranche and the Public Offer. 383,462,000 Stapled Securities will be
offered under the Placement Tranche and 51,136,000 Stapled Securities will be offered under the
Public Offer. The Stapled Securities may be re-allocated between the Placement Tranche and the
Public Offer at the discretion of the Joint Bookrunners (in consultation with the Managers) in the
event of an excess of applications in one and a deficit in the other.
The Public Offer is open to members of the public in Singapore. Under the Placement Tranche,
the Managers intend to offer the Stapled Securities by way of an international placement through
the Joint Bookrunners to investors, including institutional investors and other investors in
Singapore and elsewhere, in reliance on Regulation S.
Subject to the terms and conditions set forth in the underwriting agreement entered into between
the Joint Bookrunners, the REIT Manager, the Trustee-Manager and the Sponsor on 18 July 2013
(the Underwriting Agreement), the REIT Manager is expected to effect for the account of OUE
H-REIT and the Trustee-Manager is expected to effect for the account of OUE H-BT the issue of,
and the Joint Bookrunners are expected to severally (and not jointly) subscribe, or procure
subscribers, for 681,818,000 Stapled Securities which comprise 434,598,000 Stapled Securities
under the Offering and 247,220,000 Cornerstone Stapled Securities at the Offering Price, in the
proportions set forth opposite their respective names below.
Joint Bookrunners
Number of
Stapled Securities
Credit Suisse (Singapore) Limited 190,909,040
Goldman Sachs (Singapore) Pte. 190,909,040
Standard Chartered Securities (Singapore) Pte. Limited 190,909,040
Merrill Lynch (Singapore) Pte. Ltd. 68,181,800
Deutsche Bank AG, Singapore Branch 20,454,540
Oversea-Chinese Banking Corporation Limited 20,454,540
Total 681,818,000
The Stapled Securities will initially be offered at the Offering Price. The Offering Price per Stapled
Security in the Placement Tranche and the Public Offer will be identical.
The Managers have agreed in the Underwriting Agreement to indemnify the Joint Bookrunners
(which expression for this purpose includes affiliates and certain persons who control them)
against certain liabilities. The Sponsor has also agreed in the Underwriting Agreement to
indemnify the Joint Bookrunners against certain liabilities. The Underwriting Agreement contains
a contribution clause which provides that where the indemnification from the Managers is
unavailable to a Joint Bookrunner or is insufficient to hold harmless a Joint Bookrunner in
accordance with the indemnity, then the Managers shall contribute to the amount paid or payable
by the Joint Bookrunners as a result of such losses, claims, damages, costs, expenses or
liabilities (or actions in respect thereof) (hereinafter referred to as Losses) (a) in such proportion
as is appropriate to reflect the relative benefits received by the Managers on the one hand and the
Joint Bookrunners on the other from the offering of the Stapled Securities, or (b) if the allocation
provided by (a) above is not permitted by applicable law, then the Managers shall contribute to
such amount paid or payable by the Joint Bookrunners in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the Managers on the one hand
285
and the Joint Bookrunners on the other in connection with the statements or omissions which
resulted in Losses as well as any other relevant equitable considerations. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact relates to
information supplied by the Managers on the one hand and the Joint Bookrunners on the other and
the parties relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. No Joint Bookrunners shall be required to contribute any amount in
excess of the amount which the total fees and commissions received by such Joint Bookrunner in
respect of the Offering, as the case may be, exceeds the amount of any damages which such Joint
Bookrunner has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
The Underwriting Agreement also provides that the obligations of the Joint Bookrunners to
subscribe, or procure subscribers for, the Stapled Securities in the Offering are subject to certain
conditions contained in the Underwriting Agreement.
The Underwriting Agreement may be terminated by the Joint Bookrunners at any time prior to the
issue and delivery of the Stapled Securities upon the occurrence of certain events including,
among others, certain force majeure events pursuant to the terms of the Underwriting Agreement.
Subscribers of the Stapled Securities may be required to pay brokerage (and if so required, such
brokerage will be up to 1.0% of the Offering Price) and applicable stamp duties, taxes and other
similar charges (if any) in accordance with the laws and practices of the country of subscription,
in addition to the Offering Price.
OTHER RELATIONSHIPS
Each of the Joint Bookrunners and their respective affiliates are full service financial institutions
engaged in various activities, which may include trading, commercial and investment banking,
financial advisory, investment management, investment research, principal investment, hedging,
market making, brokerage and other financial and non-financial activities and services. Certain of
the Joint Bookrunners and their respective affiliates have provided, and may in the future provide,
financial advisory, commercial and investment banking services and other services to OUE
H-Trust, OUE H-REIT, OUE H-BT, the REIT Manager, the REIT Trustee, the Trustee-Manager
and/or the Sponsor and/or to persons and entities with relationships with OUE H-Trust, OUE
H-REIT, OUE H-BT, the REIT Manager, the REIT Trustee, the Trustee-Manager and/or the
Sponsor, for which they received or will receive customary fees and expenses.
In the ordinary course of their various business activities, the Joint Bookrunners and their
respective affiliates may purchase, sell or hold a broad array of investments and actively trade
securities, derivatives, loans, commodities, currencies, credit default swaps and other financial
instruments for their own account and for the accounts of their customers, and such investment
and trading activities may involve or relate to assets, securities and/or instruments of OUE
H-Trust, OUE H-REIT, OUE H-BT, the REIT Manager, the REIT Trustee, the Trustee-Manager and
the Sponsor and/or persons and entities with relationships with OUE H-Trust, OUE H-REIT, OUE
H-BT, the REIT Manager, the REIT Trustee, the Trustee-Manager and the Sponsor. The Joint
Bookrunners and their respective affiliates may also communicate independent investment
recommendations, market colour or trading ideas and/or publish or express independent research
views in respect of such assets, securities or instruments and may at any time hold, or recommend
to clients that they should acquire, long and/or short positions in such assets, securities and
instruments.
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Standard Chartered Bank, Singapore Branch (an affiliate of Standard Chartered Securities
(Singapore) Pte. Limited) will be providing the OUE H-REIT Debt Facilities to OUE H-REIT to
partially finance the acquisition of the Initial Portfolio. (See Capitalisation and Indebtedness for
further details.)
OVER-ALLOTMENT AND STABILISATION
The Stapled Security Lender has granted the Over-Allotment Option to the Joint Bookrunners for
the purchase of up to an aggregate of 68,182,000 Stapled Securities at the Offering Price. The
number of Stapled Securities subject to the Over-Allotment Option represents not more than
15.7% of the total number of Stapled Securities in the Offering. The Stabilising Manager (or any
of its affiliates or other persons acting on behalf of the Stabilising Manager), in consultation with
the other Joint Bookrunners, may exercise the Over-Allotment Option in full or in part, on one or
more occasions, only from the Listing Date but no later than the earlier of (i) the date falling 30
days from the Listing Date; or (ii) the date when the Stabilising Manager (or any of its affiliates or
other persons acting on behalf of the Stabilising Manager) has bought, on the SGX-ST, an
aggregate of 68,182,000 Stapled Securities, representing not more than 15.7% of the total
number of Stapled Securities in the Offering, to undertake stabilising actions. In connection with
the Over-Allotment Option, the Stabilising Manager (or any of its affiliates or other persons acting
on behalf of the Stabilising Manager) and the Unit Lender have entered into a Stapled Securities
lending agreement (the Stapled Securities Lending Agreement) dated 18 July 2013 pursuant
to which the Stabilising Manager (or any of its affiliates or other persons acting on behalf of the
Stabilising Manager) may borrow up to an aggregate of 68,182,000 Stapled Securities from the
Unit Lender for the purpose of facilitating settlement of the over-allotment of Stapled Securities in
connection with the Offering. The Stabilising Manager (or any of its affiliates or other persons
acting on behalf of the Stabilising Manager) will re-deliver to the Unit Lender such number of
Stapled Securities which have not been purchased pursuant to the exercise of the Over-Allotment
Option. The Stapled Securities Lending Agreement includes a right for the Stapled Security
Lender to recall Stapled Securities lent under such agreement by giving seven days prior written
notice to the Stabilising Manager. In the event that this right is exercised by the Stapled Security
Lender, it is possible that the Stabilising Manager may not be able to stabilise the market price of
the Stapled Securities. See Risk Factors The terms of the Stapled Securities Lending
Agreement may restrict the Stabilising Managers ability to undertake stabilisation.
In connection with the Offering, the Stabilising Manager (or any of its affiliates or other persons
acting on behalf of the Stabilising Manager) may, in consultation with the other Joint Bookrunners
and at its discretion, over-allot or effect transactions which stabilise or maintain the market price
of the Stapled Securities at levels which might not otherwise prevail in the open market. However,
there is no assurance that the Stabilising Manager (or any of its affiliates or other persons acting
on behalf of the Stabilising Manager) will undertake stabilising action. Such transactions may be
effected on the SGX-ST and in other jurisdictions where it is permissible to do so, in each case
in compliance with all applicable laws and regulations.
None of the Managers, the Sponsor, the Joint Bookrunners or the Stabilising Manager (or any of
its affiliates or other persons acting on behalf of the Stabilising Manager) makes any
representation or prediction as to the magnitude of any effect that the transactions described
above may have on the price of the Stapled Securities. In addition, none of the Managers, the
Sponsor, the Joint Bookrunners or the Stabilising Manager (or any of its affiliates or other persons
acting on behalf of the Stabilising Manager) makes any representation that the Stabilising
Manager (or any of its affiliates or other persons acting on behalf of the Stabilising Manager) will
engage in these transactions or that these transactions, once commenced, will not be
discontinued without notice (unless such notice is required by law). The Stabilising Manager will
be required to make a public announcement via SGXNET in relation to the total number of Stapled
Securities purchased by the Stabilising Manager (or any of its affiliates or other persons acting on
behalf of the Stabilising Manager), not later than 12 noon on the next trading day of the SGX-ST
287
after the transactions are effected. The Stabilising Manager will also be required to make a public
announcement through the SGX-ST in relation to the cessation of stabilising action and the
number of Stapled Securities in respect of which the Over-Allotment Option has been exercised
not later than 8.30 a.m. on the next trading day of the SGX-ST after the cessation of stabilising
action.
LOCK-UP ARRANGEMENTS
The Sponsor
Subject to the exceptions described herein, the Sponsor has agreed with the Joint Bookrunners
that it will not, (and will procure that its subsidiaries and associates will not), without the written
consent of the Joint Bookrunners (such consent not to be unreasonably withheld or delayed),
directly or indirectly, offer, issue, sell, contract to issue or sell, grant any option to purchase, grant
security over, encumber or otherwise dispose of 100.0% of its effective interest in the Lock-up
Stapled Securities, enter into any transaction (including a derivative transaction) with a similar
economic effect to the foregoing; deposit any Lock-up Stapled Securities in any depository receipt
facility save for the Sponsors CDP account; enter into a transaction which is designed or which
may reasonably be expected to result in any of the above or publicly announce any intention to
do any of the above during the Lock-up Period.
The restrictions on the Sponsor described in the preceding paragraph do not apply to:
the creation of a charge over the Lock-up Stapled Securities or otherwise grant of security
over or creation of any encumbrance over the Lock-up Stapled Securities, provided that such
charge, security or encumbrance can only be enforced after the end of the Lock-up Period;
any securities lending arrangement with the Joint Bookrunners or any sale or transfer of the
Lock-up Stapled Securities by the Sponsor pursuant to the exercise of the Over-Allotment
Option; or
the transfer of any Lock-up Stapled Securities to any wholly-owned subsidiaries of the
Sponsor, provided that such wholly-owned subsidiaries of the Sponsor have similarly
provided an undertaking to comply with the lock-up arrangements for the remaining term.
For the avoidance of doubt, any Stapled Securities returned to the Sponsor pursuant to the
Stapled Securities Lending Agreement shall be subject to the lock-up arrangements described
above for the remaining term.
The lock-up arrangements will be entered into on the date of the registration of Prospectus with
the MAS and which commences from the Listing Date until the date falling 180 days after the
Listing Date (both dates inclusive).
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The Managers
Subject to the exceptions described herein, each of the REIT Manager and the Trustee-Manager
has agreed with the Joint Bookrunners that it will not (and will procure that its associates will not),
without the written consent of any two of the Joint Global Coordinators (such consent not to be
unreasonably withheld or delayed), during the period which commences from the Listing Date until
the date falling 180 days after the Listing Date (both dates inclusive), directly or indirectly, offer,
issue, sell, contract to issue or sell, grant any option to purchase, grant security over, encumber
or otherwise dispose of, any Stapled Securities; enter into any transaction (including a derivative
transaction) with a similar economic effect to the foregoing; deposit any Stapled Securities in any
depository receipt facility save for the Managers CDP account; enter into a transaction which is
designed or which may reasonably be expected to result in any of the above or publicly announce
any intention to do any of the above.
The restrictions on the REIT Manager and the Trustee-Manager described in the preceding
paragraph do not do not apply to the issuance of (i) Stapled Securities to be offered under the
Offering; (ii) the Sponsor Stapled Securities; (iii) the Cornerstone Stapled Securities and (iv) the
Stapled Securities to the Managers in payment of any fees payable to the Managers under the
OUE H-REIT Trust Deed and the OUE H-BT Trust Deed.
The lock-up arrangements will be entered into on the date of the registration of the Prospectus
with the MAS and which commences from the Listing Date until the date falling 180 days after the
Listing Date (both dates inclusive).
SGX-ST LISTING
OUE H-Trust has received a letter of eligibility from the SGX-ST for the listing and quotation of the
Stapled Securities on the Main Board of the SGX-ST. The SGX-ST assumes no responsibility for
the correctness of any statements or opinions made or reports contained in this Prospectus.
Admission to the Official List of the SGX-ST is not to be taken as an indication of the merits of the
Offering, OUE H-Trust, OUE H-REIT, OUE H-BT, the REIT Manager, the Trustee-Manager or the
Stapled Securities. It is expected that the Stapled Securities will commence trading on the
SGX-ST on a ready basis on or about 25 July 2013.
Prior to this Offering, there has been no trading market for the Stapled Securities. There can be
no assurance that an active trading market will develop for the Stapled Securities, or that the
Stapled Securities will trade in the public market subsequent to this Offering at or above the
Offering Price.
ISSUE EXPENSES
The Managers estimate that expenses payable in connection with the Offering and the issuance
of the Sponsor Stapled Securities and the Cornerstone Stapled Securities and the application for
listing, including the Underwriting, Selling and Management Commission, professional fees and
all other incidental expenses relating to the Offering and the issuance of the Sponsor Stapled
Securities and the Cornerstone Stapled Securities will be approximately S$22.8 million based on
the Offering Price.
289
A breakdown of these estimated expenses is as follows:
S$000
(based on
the Offering
Price)
As a dollar amount
for each S$ of the
total issue
proceeds of the
Offering and the
issue of the
Sponsor Stapled
Securities and
Cornerstone
Stapled Securities
Underwriting, Selling and Management Commission
(1)
18,000 0.016
Professional and other fees
(2)
2,230 0.002
Miscellaneous Offering expenses
(3)
2,570 0.002
Total estimated expenses of the Offering
(4)
22,800 0.020
Notes:
(1) Such commission represents a maximum of 3.0% of the total amount of the Offering and the Cornerstone Stapled
Securities.
(2) Includes solicitors fees and fees for the Reporting Auditors, KPMG Services Pte. Ltd. as the independent tax adviser
(the Independent Tax Adviser), the Independent Valuers, the Independent Market Research Consultant and other
professionals fees.
(3) Includes cost of prospectus production, roadshow expenses and certain other expenses incurred or to be incurred
in connection with the Offering and the issuance of the Sponsor Stapled Securities and Cornerstone Stapled
Securities.
(4) The total expenses in relation to the Offering will be ultimately borne by the investors subscribing for the Stapled
Securities pursuant to the Offering.
DISTRIBUTION AND SELLING RESTRICTIONS
None of the Managers, the Sponsor, the Joint Global Coordinators or the Joint Bookrunners have
taken any action, or will take any action, in any jurisdiction other than Singapore that would permit
a public offering of the Stapled Securities, or the possession, circulation or distribution of this
Prospectus or any other material relating to the Offering in any jurisdiction other than Singapore
where action for that purpose is required.
Accordingly, each purchaser of the Stapled Securities may not offer or sell, directly or indirectly,
any Stapled Securities and may not distribute or publish this Prospectus or any other offering
material or advertisements in connection with the Stapled Securities in or from any country or
jurisdiction except in compliance with any applicable rules and regulations of such country or
jurisdiction.
290
Each purchaser of the Stapled Securities is deemed to have represented and agreed that it will
comply with the selling restrictions set out below for each of the following jurisdictions:
Selling Restrictions
Australia
This document and the offer is only made available in Australia to persons to whom a disclosure
document is not required to be given under either Chapter 6D or Chapter 7.9 of the Australian
Corporations Act 2001 (Cth) (Corporations Act). This document is not a prospectus, product
disclosure statement or any other form of formal disclosure document for the purposes of
Australian law, and is not required to, and does not, contain all the information which would be
required in a disclosure document under Australian law. It is made available to you on the basis
that you are a professional investor or sophisticated investor for the purposes of Chapter 6D, and
a wholesale client for the purposes of Chapter 7.9, of the Corporations Act.
If you acquire the Stapled Securities in Australia then you:
(a) represent and warrant that you are a professional or sophisticated investor;
(b) represent and warrant that you are a wholesale client; and
(c) agree not to sell or offer for sale any Stapled Securities in Australia within 12 months from
the date of their issue under the Offering, except in circumstances where:
(i) disclosure to investors would not be required under either Chapter 6D or Chapter 7.9
of the Corporations Act; or
(ii) such sale or offer is made pursuant to a disclosure document which complies with either
Chapter 6D or Chapter 7.9 of the Corporations Act.
This document has not been and will not be lodged or registered with the Australian Securities and
Investments Commission or ASX Limited or any other regulatory body or agency in Australia. The
persons referred to in this document may not hold Australian Financial Services licences. No
cooling off regime will apply to an acquisition of any interest in OUE H-Trust.
This document does not take into account the investment objectives, financial situation or needs
of any particular person. Accordingly, before making any investment decision in relation to this
document, you should assess whether the acquisition of any interest in the OUE H-Trust is
appropriate in light of your own financial circumstances or seek professional advice.
Canada
The Stapled Securities may only be offered or sold, directly or indirectly, in the provinces of
Ontario and Quebec, or to residents thereof and not in, or to the residents of, any other province
or territory of Canada. Such offers or sales will be made pursuant to an exemption from the
requirement to file a prospectus with the regulatory authorities in the provinces of Ontario and
Quebec and will be made only by a dealer duly registered under the applicable securities laws of
the province of Ontario or Quebec, as the case may be, or in accordance with an exemption from
the applicable registered dealer requirements.
291
Dubai International Financial Centre
This Prospectus relates to a fund which is not subject to any form of regulation or approval by the
Dubai Financial Services Authority (the DFSA). The DFSA has no responsibility for reviewing or
verifying this Prospectus or other documents in connection with OUE H-Trust. Accordingly, the
DFSA has not approved this Prospectus or any other associated documents nor taken any steps
to verify the information set out in this Prospectus, and has no responsibility for it.
The Stapled Securities to which this Prospectus relates may be illiquid and/or subject to
restrictions on their resale. Prospective purchasers should conduct their own due diligence on the
Stapled Securities. If you do not understand the contents of this document you should consult an
authorised financial advisor. This Prospectus is intended for distribution only to qualified investors
and must not, therefore, be delivered to, or relied on by, a retail investor.
European Economic Area
In relation to each Member State of the European Economic Area which has implemented the
Prospectus Directive (each, a Relevant Member State), an offer to the public of any Stapled
Securities which are the subject of the Offering contemplated by this Prospectus may not be made
in that Relevant Member State except that an offer to the public in that Relevant Member State of
any Stapled Securities may be made at any time under the following exemptions under the
Prospectus Directive, if they have been implemented in that Relevant Member State:
(a) to any legal entity which is a qualified investor as defined under the Prospectus Directive;
(b) to fewer than 100, or, if the Relevant Member State has implemented the relevant provisions
of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified
investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the
Joint Bookrunners for any such offer; or
(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of Stapled Securities shall result in a requirement for the REIT
Manager and the Trustee-Manager to publish a prospectus pursuant to Article 3 of the Prospectus
Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.
For the purposes of this provision, the expression an offer to the public in relation to any Stapled
Securities in any Relevant Member State means the communication in any form and by any means
of sufficient information on the terms of the Offering and any Stapled Securities to be offered so
as to enable an investor to decide to purchase any Stapled Securities, as the same may be varied
in that Member State by any measure implementing the Prospectus Directive in that Member
State, and the expression Prospectus Directive means Directive 2003/71/EC (and amendments
thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant
Member State), and includes any relevant implementing measure in each Relevant Member State
and the expression 2010 PD Amending Directive means Directive 2010/73/EU.
292
Hong Kong
This document has not been approved by the Securities and Futures Commission in Hong Kong.
Accordingly:
(a) Stapled Securities may not be offered or sold in Hong Kong, by means of this document or
any other Document other than (i) to professional investors as defined in the Securities and
Futures Ordinance (Cap. 571) of Hong Kong (SFO) and any rules made under the SFO or
(ii) in other circumstances which do not result in the document being a prospectus as
defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an
offer to the public within the meaning of that Ordinance; and
(b) no person shall issue or possess for the purpose of issue, whether in Hong Kong or
elsewhere, any advertisement, invitation or document relating to the Stapled Securities,
which is directed at, or the contents of which are likely to be accessed or read by, the public
of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other
than with respect to Stapled Securities which are or are intended to be disposed of only to
persons outside Hong Kong or only to professional investors as defined in the SFO and any
rules made under the SFO.
Indonesia
This Prospectus may not be distributed directly or indirectly in Indonesia or to any Indonesian
entity or Indonesian citizen (person), and the Underwriters, may not offer or sell, directly or
indirectly, any Stapled Securities in Indonesia or to any Indonesian entity or Indonesian citizen
(person), in a manner constituting a public offering on the Stapled Securities under the Indonesian
Capital Market Law and the applicable regulations of the Otoritas Jasa Keuangan (Financial
Services Authority) previously known as Badan Pengawas Pasar Modal dan Lembaga Keuangan
(Capital Market and Financial Institution Supervisory Agency).
The Netherlands
The Securities will only be offered in The Netherlands to Qualified Investors (as defined in the EU
Prospectus Directive), unless such offer is made in accordance with the Dutch Financial
Supervision Act (Wet op het financieel toezicht).
Norway
This Prospectus is not a prospectus within the meaning of Chapter 7 of the Norwegian Securities
Trading Act 2007 or Chapter 8 of the Norwegian Securities Funds Act of 2011, and has not been
and will not be reviewed by or registered with the Financial Supervisory Authority of Norway or any
other Norwegian regulatory body.
The existence and contents of this Prospectus is confidential, and it is provided to recipients on
a personal basis and must not be transferred or assigned to others.
The Stapled Securities are not marketed or offered in Norway other than in circumstances where
Norwegian license and prospectus requirements do not apply or exemptions from such
requirements apply.
293
This Prospectus is solely directed to and intended (i) for persons or entities based outside Norway,
(ii) for persons or entities in Norway who fall within the category professional investors as
defined in Section 7-4 first paragraph no. 8 of the Norwegian Securities Trading Act 2007 and
related regulations and (iii) for other individual distribution by the Joint Bookrunners in a way that
Norwegian license and prospectus requirements are complied with. The Prospectus should not be
acted upon or relied upon by others.
Peoples Republic of China
The Stapled Securities may not be offered or sold, and will not be offered or sold to any person
in the Peoples Republic of China (excluding Hong Kong, Macau and Taiwan, the PRC) as part
of the initial distribution of the Stapled Securities, except pursuant to applicable laws and
regulations of the PRC. This document does not constitute an offer to sell or the solicitation of an
offer to buy any securities in the PRC to any person to whom it is unlawful to make the offer or
solicitation in the PRC.
Neither the REIT-Manager nor the Trustee-Manager represents that this document may be
lawfully distributed, or that any Stapled Securities may be lawfully offered, in compliance with any
applicable registration or other requirements in the PRC, or pursuant to an exemption available
thereunder, or assume any responsibility for facilitating any such distribution or offering. In
particular, no action has been taken by the REIT Manager Trustee-Manager which would permit
a public offering of any Stapled Securities or distribution of this document in the PRC. Accordingly,
the Stapled Securities are not being offered or sold within the PRC by means of this document or
any other document. Neither this document nor any advertisement or other offering material may
be distributed or published in the PRC, except under circumstances that will result in compliance
with any applicable laws and regulations.
Qatar
This document is not intended to constitute an offer, sale or delivery of shares, units in a collective
investment scheme, stapled securities or other securities under the laws of the State of Qatar
including the rules and regulations of the Qatar Financial Centre Authority (QFCA) or the Qatar
Financial Centre Regulatory Authority (QFCRA) or equivalent laws of the Qatar Central Bank
(QCB). This document has not been lodged or registered with, or reviewed or approved by the
QFCA, the QFCRA, the QCB or the Qatar Financial Markets Authority (QFMA) and is not
otherwise authorised or licensed for distribution in the State of Qatar or the Qatar Financial Centre
(QFC). The information contained in this document does not, and is not intended to, constitute
a public or general offer or other invitation in respect of shares, Stapled Securities in a collective
investment scheme, stapled securities, or other securities in the State of Qatar or the QFC. The
stapled securities will not be admitted or traded on the Qatar Exchange.
Saudi Arabia
This document may not be distributed in the Kingdom of Saudi Arabia except to such persons as
are permitted under the Offers of Securities Regulations issued by the Capital Market Authority.
The Capital Market Authority does not make any representation as to the accuracy or
completeness of this document, and expressly disclaims any liability whatsoever for any loss
arising from, or incurred in reliance upon, any part of this document. Prospective purchasers of the
securities offered hereby should conduct their own due diligence on the accuracy of the
information relating to the securities. If you do not understand the contents of this document you
should consult an authorised financial adviser.
294
Any investor in the Kingdom of Saudi Arabia who acquires the Stapled Securities pursuant to the
offering should note that the offer of Stapled Securities is a private placement to sophisticated
investors under Article 10 of the Offer of Securities Regulations as issued by the Board of the
Capital Market Authority resolution number 2-11-2004 dated 4 October 2004, as amended by the
Board of the Capital Market Authority resolution number 1-28-2008 dated 18 August 2008 (the
KSA Regulations).
The Stapled Securities to be issued have not and will not be offered or sold in the Kingdom of
Saudi Arabia other than in compliance with the KSA Regulations, through an Authorised Person
(as defined in the Glossary of Defined Terms Used in the Regulations and Rules of the Capital
Market Authority) and following a notification to the Capital Market Authority under the KSA
Regulations.
Investors should be aware that the offer of the Stapled Securities is subject to the restrictions on
secondary market activity of offers of privately placed securities as set out in Article 17 of the KSA
Regulations.
Switzerland
The Stapled Securities may not be publicly offered, distributed or re-distributed on a professional
basis in or from Switzerland and neither this document nor any other solicitation for investments
in OUE H-Trust may be communicated or distributed in Switzerland in any way that could
constitute a public offering within the meaning of Articles 1156/652a of the Swiss Code of
Obligations (CO). This document may not be copied, reproduced, distributed or passed on to
others without the Joint Bookrunners prior written consent. This document is not a prospectus
within the meaning of Articles 1156/652a of the CO and OUE H-Trust will not be listed on the SIX
Swiss Exchange. Therefore, this document may not comply with the disclosure standards of the
CO and/or the listing rules (including any prospectus schemes) of the SIX Swiss Exchange set
forth in art. 27 et seq. of the SIX Listing Rules. In addition, it cannot be excluded that OUE H-Trust
could qualify as a foreign collective investment scheme pursuant to Article 119 of the Swiss
Federal Act on Collective Investment Schemes, as amended (CISA). OUE H-Trust will not be
licensed for distribution in and from Switzerland. Therefore, OUE H-Trust may only be distributed
to so-called qualified investors in and from Switzerland in accordance with Articles 10 and 120
CISA and Article 6 of the implementing ordinance, as amended, to the CISA.
Taiwan
The offering of the securities has not been and will not be registered with the Financial
Supervisory Commission of Taiwan, the Republic of China pursuant to relevant securities laws and
regulations and may not be offered or sold in Taiwan, the Republic of China through a public
offering or in circumstance which constitutes an offer within the meaning of the Securities and
Exchange Act of Taiwan, the Republic of China that requires a registration or approval of the
Financial Supervisory Commission of Taiwan, the Republic of China. No person or entity in
Taiwan, the Republic of China has been authorized to offer or sell the securities in Taiwan, the
Republic of China.
United Arab Emirates (excluding the Dubai International Financial Centre)
In accordance with the provisions of the UAE Securities and Commodities Authorities (SCA)
Board Decision No. 37 of 2012, the Stapled Securities to which this Prospectus relates may only
be promoted in the United Arab Emirates (the UAE) with the prior approval of the SCA and by
way of (i) private placement by persons authorised to do so by the UAE Central Bank or the SCA,
or (ii) institutional private placement by licensed representative offices subject to a minimum
subscription amount per individual institutional investor of ten (10) million UAE Dirhams.
295
Any approval of the SCA to the promotion of the Stapled Securities in the UAE does not represent
a recommendation to purchase or invest in OUE H-Trust. The SCA has not verified this document
or other documents in connection with OUE H-Trust and the SCA may not be held liable for any
default by any party involved in the operation, management or promotion of OUE H-Trust or in the
performance of their responsibilities and duties, or the accuracy or completeness of the
information in this Prospectus.
The Stapled Securities to which this Prospectus relates may be illiquid and/or subject to
restrictions on their resale. Prospective investors should conduct their own due diligence on the
Stapled Securities. If you do not understand the contents of this document you should consult an
authorised financial advisor.
United Kingdom
The Stapled Securities of OUE H-Trust are units in a collective investment scheme as defined in
the Financial Services and Markets Act 2000 (FSMA) of the United Kingdom (UK). OUE
H-Trust has not been authorised, or otherwise recognised or approved by the Financial Conduct
Authority (FCA) or the Prudential Regulation Authority (PRA) and, as an unregulated collective
investment scheme, accordingly cannot be marketed in the UK to the general public.
The issue or distribution of the Prospectus in the UK, (a) if made by a person who is not an
authorised person under FSMA, is being made only to, or directed only at, persons who (i) are
investment professionals falling within Article 19 of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (the FPO Order) who meet the requirements thereunder; or
(ii) are high net worth companies (and certain other entities) falling within Article 49 of the FPO
Order who meet the requirements thereunder; or (iii) persons to whom it may otherwise lawfully
be distributed under the FPO Order (all such persons together being referred to as FPO
persons); and (b) if made by a person who is an authorized person under FSMA, is being made
only to, or directed only at, (i) investment professionals falling within Article 14 of the Financial
Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions)
Order 2001 (the CIS Order) who meet the requirements thereunder; or (ii) high net worth
companies (and certain other entities) falling within Article 22 of the CIS Order who meet the
requirements thereunder; or (iii) persons to whom it may otherwise lawfully be distributed under
the CIS Order or Section 4.12 of the FCAs Conduct of Business Sourcebook (all such persons
together being referred to as PCIS persons and, together with the FPO persons, the relevant
persons). This document must not be acted on or relied on by persons who are not relevant
persons. Any investment or investment activity to which this document relates is available only to
relevant persons and will be engaged in only with relevant persons. Potential investors in the UK
are advised that all, or most, of the protections afforded by the UK regulatory system will not apply
to an investment in OUE H-Trust and that compensation will not be available under the UK
Financial Services Compensation Scheme.
Reliance on this promotion for the purpose of engaging in any investment activity may expose an
individual to a significant risk of losing all of the property or other assets invested or of incurring
additional liabilities. If you are in any doubt about the investment to which this communication
relates, you should consult an authorised person specialising in advising on investments of this
kind.
United States
The Stapled Securities have not been and will not be registered under the Securities Act and may
not be offered or sold within the United States except in a transaction that is exempt from, or not
subject to, the registration requirements of the Securities Act. The Stapled Securities are being
offered and sold outside of the United States in reliance on Regulation S (terms used in this
subsection that are defined in Regulation S are used herein as defined therein).
296
General
Each applicant for Stapled Securities in the Offering will be deemed to have represented and
agreed that it is relying on this Prospectus and not on any other information or representation not
contained in this Prospectus and none of OUE H-Trust, OUE H-REIT, OUE H-BT, the REIT
Manager, the REIT Trustee, the Trustee-Manager, the Sponsor, the Joint Global Coordinators, the
Joint Bookrunners or any other person responsible for this Prospectus or any part of it will have
any liability for any such other information or representation.
297
CLEARANCE AND SETTLEMENT
INTRODUCTION
A letter of eligibility has been obtained from the SGX-ST for the listing and quotation of the Stapled
Securities. For the purpose of trading on the SGX-ST, a board lot for the Stapled Securities will
comprise 1,000 Stapled Securities.
Upon listing and quotation on the SGX-ST, the Stapled Securities will be traded under the
electronic book-entry clearance and settlement system of CDP. All dealings in and transactions of
the Stapled Securities through the SGX-ST will be effected in accordance with the terms and
conditions for the operation of Securities Accounts, as amended from time to time.
CDP, a wholly-owned subsidiary of Singapore Exchange Limited, is incorporated under the laws
of Singapore and acts as a depository and clearing organisation. CDP holds securities for its
account holders and facilitates the clearance and settlement of securities transactions between
account holders through electronic book-entry changes in the Securities Accounts maintained by
such account holders with CDP.
It is expected that the Stapled Securities will be credited into the Securities Accounts of applicants
for the Stapled Securities within four Market Days
1
after the closing date for applications for the
Stapled Securities.
CLEARANCE AND SETTLEMENT UNDER THE DEPOSITORY SYSTEM
The Stapled Securities will be registered in the name of CDP or its nominee and held by CDP for
and on behalf of persons who maintain, either directly or through depository agents, Securities
Accounts with CDP. Persons named as direct Securities Account holders and depository agents
in the depository register maintained by CDP, will be treated as Stapled Securityholders in respect
of the number of Stapled Securities credited to their respective Securities Accounts.
Transactions in the Stapled Securities under the book-entry settlement system will be reflected by
the sellers Securities Account being debited with the number of Stapled Securities sold and the
buyers Securities Account being credited with the number of Stapled Securities acquired. No
transfer stamp duty is currently payable for the transfer of the Stapled Securities that are settled
on a book-entry basis.
The Stapled Securities credited to a Securities Account may be traded on the SGX-ST on the
basis of a price between a willing buyer and a willing seller. The Stapled Securities credited into
a Securities Account may be transferred to any other Securities Account with CDP, subject to the
terms and conditions for the operation of Securities Accounts and a S$10.00 transfer fee payable
to CDP. All persons trading in the Stapled Securities through the SGX-ST should ensure that the
relevant Stapled Securities have been credited into their Securities Account, prior to trading in
such Stapled Securities, since no assurance can be given that the Stapled Securities can be
credited into the Securities Account in time for settlement following a dealing. If the Stapled
Securities have not been credited into the Securities Account by the due date for the settlement
of the trade, the buy-in procedures of the SGX-ST will be implemented.
1 Market Day means any day on which the SGX-ST is open for trading in securities.
298
CLEARING FEES
A clearing fee for the trading of the Stapled Securities on the SGX-ST is payable at the rate of
0.04% of the transaction value, subject to a maximum of S$600.00 per transaction. The clearing
fee, deposit fee and Stapled Security withdrawal fee may be subject to GST (currently 7.0%).
Dealings in the Stapled Securities will be carried out in Singapore dollars and will be effected for
settlement in CDP on a scripless basis. Settlement of trades on a normal ready basis on the
SGX-ST generally takes place on the third Market Day following the transaction date and payment
for the Stapled Securities is generally settled on the following Market Day. CDP holds Stapled
Securities on behalf of investors in Securities Accounts. An investor may open a direct account
with CDP or a sub-account with any CDP depository agent. A CDP depository agent may be a
member company of the SGX-ST, bank, merchant bank or trust company.
299
EXPERTS
KPMG LLP, the Reporting Auditors, was responsible for preparing the Reporting Auditors Report
on the Profit Forecast and Profit Projection and the Reporting Auditors Report on the Unaudited
Pro Forma Financial Information found in Appendix A and Appendix B of this Prospectus,
respectively.
Cushman & Wakefield VHS Pte. Ltd. and Jones Lang LaSalle Property Consultants Pte Ltd, the
Independent Valuers, were responsible for preparing the Independent Property Valuation
Summary Reports in Appendix D of this Prospectus.
CBRE Pte. Ltd., the Independent Market Research Consultant, was responsible for preparing the
Independent Market Research Report in Appendix E of this Prospectus.
KPMG Services Pte. Ltd., the Independent Tax Adviser, was responsible for preparing the
Independent Taxation Report found in Appendix F of this Prospectus.
The Reporting Auditors, the Independent Valuers, the Independent Market Research Consultant
and the Independent Tax Adviser have each given and have not withdrawn their respective written
consents to the issue of this Prospectus with the inclusion herein of their names and their
respective write-ups and reports and all references thereto in the form and context in which they
respectively appear in this Prospectus, and to act in such capacity in relation to this Prospectus.
None of Allen & Gledhill LLP, TSMP Law Corporation, Allen & Overy LLP or Rodyk & Davidson LLP
makes, or purports to make, any statement in this Prospectus and none of them is aware of any
statement in this Prospectus which purports to be based on a statement made by it and it makes
no representation, express or implied, regarding, and takes no responsibility for, any statement in
or omission from this Prospectus.
300
GENERAL INFORMATION
RESPONSIBILITY STATEMENT BY THE DIRECTORS
(1) The Directors collectively and individually accept full responsibility for the accuracy of the
information given in this Prospectus and confirm after making all reasonable enquiries that,
to the best of their knowledge and belief, this Prospectus constitutes full and true disclosure
of all material facts about the Offering, OUE H-Trust and its subsidiaries, and the Directors
are not aware of any facts the omission of which would make any statement in this
Prospectus misleading, and the Directors are satisfied that the Profit Forecast and Profit
Projection has been stated after due and careful inquiry. Where information in the Prospectus
has been extracted from published 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 those sources and/or
reproduced in this Prospectus in its proper form and context.
MATERIAL BACKGROUND INFORMATION
(2) There are no legal or arbitration proceedings pending or, so far as the Directors are aware,
threatened against the Managers the outcome of which, in the opinion of the Managers, as
the case may be, may have or have had during the 12 months prior to the date of this
Prospectus, a material adverse effect on the financial position of the Managers.
(3) There are no legal or arbitration proceedings pending or, so far as the Directors are aware,
threatened against OUE H-REIT and/or OUE H-BT the outcome of which, in the opinion of
the Directors, as the case may be, may have or have had during the 12 months prior to the
date of this Prospectus, a material adverse effect on the financial position (on a pro forma
basis) of OUE H-REIT and/or, as the case may be, OUE H-BT.
(4) The name, age and address of each of the Directors are set out in Management and
Corporate Governance OUE H-Trust The REIT Manager Board and Management and
Corporate Governance OUE H-Trust The Trustee-Manager Board. A list of the present
and past directorships of each director and executive officer of the Managers over the last
five years preceding the Latest Practicable Date, being 28 June 2013, is set out in Appendix
H, List of Present and Past Principal Directorships of Directors and Executive Officers of the
REIT Manager and the Trustee-Manager.
(5) There is no family relationship among the directors and executive officers of the Managers.
(6) There have been no public takeover offers by third-parties in respect of the OUE H-BT Units
or by the Trustee-Manager in respect of the shares of a corporation or the units of another
business trust, that have occurred between 10 July 2013, being the date of constitution of
OUE H-BT, and the Latest Practicable Date, being 28 June 2013.
301
(7) None of the directors, executive officers or controlling shareholders
1
of the Managers, or the
controlling Stapled Securityholder
2
is or was involved in any of the following events:
(a) at any time during the last 10 years, an application or a petition under any bankruptcy
laws of any jurisdiction filed against him or against a partnership of which he was a
partner at the time when he was a partner or at any time within two years from the date
he ceased to be a partner;
(b) at any time during the last 10 years, an application or a petition under any law of any
jurisdiction filed against an entity (not being a partnership) of which he was a director
or an equivalent person or a key executive, at the time when he was a director or an
equivalent person or a key executive of that entity or at any time within two years from
the date he ceased to be a director or an equivalent person or a key executive of that
entity, for the winding-up or dissolution of that entity or, where that entity is the trustee
of a business trust, that business trust, on the ground of insolvency, saved as disclosed
in Appendix H, List of Present and Past Principal Directorships of Directors and
Executive Officers of the REIT Manager and the Trustee-Manager;
(c) any unsatisfied judgment against him;
(d) a conviction of any offence, in Singapore or elsewhere, involving fraud or dishonesty
which is punishable with imprisonment, or has been the subject of any criminal
proceedings (including any pending criminal proceedings of which he is aware) for such
purpose;
(e) a conviction of any offence, in Singapore or elsewhere, involving a breach of any law
or regulatory requirement that relates to the securities or futures industry in Singapore
or elsewhere, or has been the subject of any criminal proceedings (including any
pending criminal proceedings of which he is aware) for such breach;
(f) at any time during the last 10 years, judgment been entered against him in any civil
proceedings in Singapore or elsewhere involving a breach of any law or regulatory
requirement that relates to the securities or futures industry in Singapore or elsewhere,
or a finding of fraud, misrepresentation or dishonesty on his part, or any civil
proceedings (including any pending civil proceedings of which he is aware) involving an
allegation of fraud, misrepresentation or dishonesty on his part;
(g) a conviction in Singapore or elsewhere of any offence in connection with the formation
or management of any entity or business trust;
1 In this context, the term controlling shareholder adopts the definition used in the Third Schedule of the SFR(BT)
to mean:
(i) a person who has an interest in the voting shares of the corporation and who exercises control over the
corporation; or
(ii) a person who has an interest in the voting shares of the corporation of an aggregate of not less than 30% of
the total votes attached to all voting shares of that corporation, unless he does not exercise control over that
corporation.
2 In this context, the term controlling Stapled Securityholder tracks the definition of controlling unitholder in the
Third Schedule of the SFR(BT) and means:
(i) a person who has an interest or interests in Stapled Securities in OUE H-Trust and who exercises control over
OUE H-Trust; or
(ii) a person who has an interest or interests in Stapled Securities representing not less than 30% of the total
voting rights of all the Stapled Securityholders of OUE H-Trust, unless he does not exercise control over OUE
H-Trust.
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(h) disqualification from acting as a director or an equivalent person of any entity (including
the trustee of a business trust) in any jurisdiction, or from taking part directly or
indirectly in the management of any entity or business trust in any jurisdiction;
(i) the subject of any order, judgment or ruling of any court, tribunal or governmental body
permanently or temporarily enjoining him from engaging in any type of business
practice or activity;
(j) to his knowledge, been concerned with the management or conduct, in Singapore or
elsewhere, of the affairs of:
(i) any corporation which has been investigated for a breach of any law or regulatory
requirement governing corporations in Singapore or elsewhere;
(ii) any entity (not being a corporation) which has been investigated for a breach of
any law or regulatory requirement governing such entities in Singapore or
elsewhere;
(iii) any business trust which has been investigated for a breach of any law or
regulatory requirement governing business trusts in Singapore or elsewhere; or
(iv) any entity or business trust which has been investigated for a breach of any law
or regulatory requirement that relates to the securities or futures industry in
Singapore or elsewhere,
in connection with any matter occurring or arising during the period when he was so
concerned with the entity or business trust; or
(k) the subject of any current or past investigation or disciplinary proceedings, or has been
reprimanded or issued any warning, by the MAS or any other regulatory authority,
exchange, professional body or government agency, whether in Singapore or
elsewhere.
EXCHANGE CONTROLS
(8) As at the date of this Prospectus, there is no governmental law, decree or regulatory
requirement which may affect the repatriation of capital and the remittance of profits by or to
the REIT Manager and/or the Trustee-Manager.
MATERIAL CONTRACTS
(9) The dates of, parties to, and general nature of every material contract which the REIT
Trustee has entered into within the two years preceding the date of this Prospectus (not
being contracts entered into in the ordinary course of the business of OUE H-Trust) are as
follows:
(a) the OUE H-REIT Trust Deed;
(b) the Stapling Deed;
(c) the Property Sale and Purchase Agreement;
(d) the ROFR;
(e) the Master Lease Agreement;
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(f) the Master Property Management Agreement;
(g) the Individual Property Management Agreement; and
(h) the subscription agreements entered into between the Managers and the Cornerstone
Investors to subscribe for the Cornerstone Stapled Securities (the Cornerstone
Subscription Agreements).
(10) The dates of, parties to, and general nature of every material contract which the Trustee-
Manager has entered into within the two years preceding the date of this Prospectus (not
being contracts entered into in the ordinary course of the business of OUE H-Trust) are as
follows:
(a) the OUE H-BT Trust Deed;
(b) the Stapling Deed;
(c) the ROFR; and
(d) Cornerstone Subscription Agreements.
DOCUMENTS FOR INSPECTION
(11) Copies of the following documents are available for inspection at the registered office of the
REIT Manager at 333 Orchard Road #33-00, Singapore 238867 and of the Trustee-Manager
at 333 Orchard Road #33-00, Singapore 238867 for a period of six months from the date of
this Prospectus:
(a) the material contracts referred to in paragraphs 9 and 10 above, save for the Deeds
(which will be available for inspection for so long as OUE H-REIT and OUE H-BT are
in existence);
(b) the Reporting Auditors Report on the Profit Forecast and Profit Projection as set out in
Appendix A of this Prospectus;
(c) the Reporting Auditors Report on the Unaudited Pro Forma Financial Information as set
out in Appendix B of this Prospectus;
(d) the Independent Property Valuation Summary Reports as set out in Appendix D of this
Prospectus as well as the full valuation reports for Mandarin Orchard Singapore and
Mandarin Gallery;
(e) the Independent Market Research Report as set out in Appendix E of this Prospectus;
(f) the Independent Taxation Report as set out in Appendix F of this Prospectus;
(g) the written consents of the Reporting Auditors, the Independent Valuers, the
Independent Market Research Consultant and the Independent Tax Adviser (See
Experts for further details); and
(h) the Depository Terms and Conditions.
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CONSENTS OF THE JOINT GLOBAL COORDINATORS AND THE JOINT BOOKRUNNERS
(12) Credit Suisse (Singapore) Limited, Goldman Sachs (Singapore) Pte. and Standard
Chartered Securities (Singapore) Pte. Limited have each given and have not withdrawn their
respective written consents to being named in this Prospectus as a Joint Global Coordinator
and Issue Manager to the Offering.
(13) Credit Suisse (Singapore) Limited, Goldman Sachs (Singapore) Pte., Standard Chartered
Securities (Singapore) Pte. Limited, Merrill Lynch (Singapore) Pte. Ltd., Deutsche Bank AG,
Singapore Branch and Oversea-Chinese Banking Corporation Limited have each given and
have not withdrawn their respective written consents to being named in this Prospectus as
a Joint Bookrunner and Underwriter to the Offering.
WAIVERS FROM THE SGX-ST
(14) The Managers have obtained from the SGX-ST waivers from compliance with the following
listing rules under the Listing Manual:
(a) Rule 404(3), which relates to restrictions on investments subject to compliance with
Chapter 9 of the Listing Manual, the Code on Collective Investment Schemes and the
Business Trusts Act;
(b) Rule 404(5), which requires the management company to be reputable and have an
established track record in managing investments subject to the management in the
Managers, which are the entities responsible for managing the assets held by OUE
H-Trust, having the relevant experience;
(c) Rule 407(4), which requires the submission of the financial track record of the
investment manager and the investment adviser and persons employed by them in the
listing application;
(d) Rule 748(1), which requires an investment fund to announce via SGXNET its net
tangible assets per unit at the end of each week, subject to such disclosures being
made on a quarterly basis; and
(e) Rule 748(3), which requires an investment fund to disclose certain information in its
annual report, subject to disclosure of the information set out under Management and
Corporate Governance Annual Reports.
WAIVERS FROM THE MAS
(15) The MAS has granted the Trustee-Manager an exemption from compliance with sections
10(2)(a) and 11(1)(a) of the BTA to the extent that sections 10(2)(a) and 11(1)(a) of the BTA
require the Trustee-Manager and the Trustee-Manager Directors to act in the best interests
of the holders of OUE H-BT Units as a whole only, subject to the conditions that (a) the
Trustee-Manager shall ensure that the OUE H-BT Units remain stapled to the OUE H-REIT
Units, and (b) the Trustee-Manager and the Trustee-Manager Directors shall act in the best
interests of all the Stapled Securityholders as a whole.
(16) The MAS has also granted the Trustee-Manager an exemption from compliance with section
15(1) of the BTA to the extent that section 15(1) requires an audit committee to be
constituted, subject to the conditions that (a) the exemption shall only be in effect for so long
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as OUE H-BT is dormant, and (b) immediately upon the Trustee-Manager becoming aware
that OUE H-BT will become active, the Trustee-Manager shall ensure that an audit committee
in compliance with the requirements of the BTA and the BTR is constituted before OUE H-BT
becomes active.
(17) The MAS has also granted the Trustee-Manager an exemption from compliance with
regulations 12(1)(a) and 12(1)(b) of the BTR to the extent that regulations 12(1)(a) and
12(1)(b) of the BTR require the Trustee-Manager Directors to be independent, subject to the
following conditions:
(a) the Trustee-Manager shall ensure that the OUE H-BT Units remain stapled to the OUE
H-REIT Units;
(b) the Trustee-Manager shall ensure that, in relation to the composition of the Trustee-
Manager Board:
(i) the Trustee-Manager Directors are also the REIT Manager Directors and vice
versa;
(ii) at least a majority of the Trustee-Manager Directors shall be independent from
management and business relationships with the Managers; and
(iii) at least one-third of the Trustee-Manager Directors shall be independent from
management and business relationships with the Managers and from every
Substantial shareholder of the Managers; and
(c) the Stapling Deed shall contain covenants binding the Managers to exercise all due
diligence and vigilance to safeguard the rights and interests of the Stapled
Securityholders in the event of a conflict of interest between the Managers and their
respective shareholders, and that of the Stapled Securityholders.
For the purposes of this paragraph (17), a director shall not be considered independent from
a Substantial shareholder if he is also a director of a subsidiary or an associated company
of the Substantial shareholder (where the subsidiary or associated company is not the
Trustee-Manager or the REIT Manager).
MISCELLANEOUS
(18) The financial year-end of OUE H-Trust, OUE H-REIT and OUE H-BT is 31 December. The
annual audited consolidated financial statements of OUE H-Trust will be prepared and sent
to Stapled Securityholders within the timeframe as set out in the applicable laws, rules and
regulations and not less than 14 days before the date of the annual general meeting of
(19) While OUE H-Trust is listed on the SGX-ST, investors may check the SGX-ST website
http://www.sgx.com for the prices at which the Stapled Securities are being traded on the
SGX-ST. Investors may also check one or more major Singapore newspapers such as The
Straits Times, The Business Times and Lianhe Zaobao for the price range within which the
Stapled Securities were traded on the SGX-ST on the preceding day.
(20) Save as disclosed elsewhere in this Prospectus, there is no arrangement or understanding
with a Substantial shareholder of the Trustee-Manager, Substantial holder of OUE H-BT
Units, customer or supplier of the Trustee-Manager, pursuant to which any Trustee-Manager
Director or any executive officer of OUE H-BT was selected as a director or executive officer
of OUE H-BT.
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(21) There is no known arrangement the operation of which may at a subsequent date, result in
a change of control in the Trustee-Manager.
(22) A full valuation of each of the real estate assets held by OUE H-REIT will be carried out at
least once a year in accordance with the Property Funds Appendix. Generally, where OUE
H-Trust proposes to issue new Stapled Securities or to redeem existing Stapled Securities,
or (in the event that Unstapling has occurred), OUE H-REIT proposes to issue new OUE
H-REIT Units or to redeem existing OUE H-REIT Units, and the assets held by OUE H-REIT
were valued more than six months ago, the REIT Manager should exercise discretion in
deciding whether to conduct a desktop valuation of the real estate assets held by OUE
H-REIT, especially when market conditions indicate that real estate values have changed
materially. The REIT Manager or the REIT Trustee may at any other time arrange for the
valuation of any of the real estate assets held by OUE H-REIT if it is of the opinion that it is
in the best interest of Stapled Securityholders to do so.
(23) The REIT Manager does not intend to receive soft dollars (as defined in the CIS Code) in
respect of OUE H-REIT. Save as disclosed in this Prospectus, unless otherwise permitted
under the Listing Manual, neither the REIT Manager, the Trustee-Manager nor any of their
associates will be entitled to receive any part of any brokerage charged to OUE H-REIT or
OUE H-BT, or any part of any fees, allowances or benefits received on purchases charged
to OUE H-REIT or OUE H-BT.
TREND INFORMATION AND PROFIT FORECAST
(24) Save as disclosed under the sections entitled Risk Factors, Capitalisation and
Indebtedness, Profit Forecast and Profit Projection, Strategy and Business and
Properties of this Prospectus, the financial condition and operations of OUE H-Trust is not
likely to be affected by any of the following:
(a) known trends or demands, commitments, events or uncertainties that will result in or are
reasonably likely to result in OUE H-Trusts liquidity increasing or decreasing in any
material way;
(b) material commitments for capital expenditure;
(c) unusual or infrequent events or transactions or any insignificant economic changes that
materially affects the amount of reported income from operations; and
(d) known trends or uncertainties that have had or that OUE H-Trust reasonably expects
will have a material favourable or unfavourable impact on revenues or operating
income.
(25) Due to the nature of the business of OUE H-Trust, an order book is not maintained.
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GLOSSARY
Adjoining Property The property known as 8 Grange Road, Singapore 239695 (being
TS-21 Lot 542A)
Aggregate Leverage The ratio of OUE H-REITs total borrowings and deferred
payments (including deferred payments for assets whether to be
settled in cash or in units of the property fund) to the value of the
OUE H-REIT Deposited Property
Agreed FF&E Plan The FF&E plan of Mandarin Orchard Singapore listing out the
existing FF&E items and the anticipated FF&E works proposed
for the year, as agreed upon between the REIT Manager and the
Master Lessee
Application Forms The printed application forms to be used for the purpose of the
Offering and which form part of this Prospectus
Application List The list of applicants subscribing for the Stapled Securities which
are the subject of the Public Offer
Appraised Value In relation to each of Mandarin Orchard Singapore and Mandarin
Gallery, the value(s) for each as at 31 March 2013, as appraised
by the Independent Valuers
Associate Has the meaning ascribed to it in the Listing Manual
ATMs Automated teller machines
Authorised Investment Has the meaning ascribed to it in the Stapling Trust Deed and the
OUE H-REIT Trust Deed or the OUE H-BT Trust Deed (as the
case may be)
Authority or MAS Monetary Authority of Singapore
Available Rooms Number of hotel rooms in a hotel less permanent house use
rooms
Average Daily Rate or ADR Revenue divided by the total number of rooms occupied
Average Occupancy Rate Available Rooms occupied for a particular period divided by the
rooms available for the relevant period
Base Fee 0.3% per annum of the value of the OUE H-REIT Deposited
Property
Basic Rent In relation to Mandarin Gallery, rent which includes (i) base rent
(after rent rebates, refunds, credits or discounts and rebates for
rent-free periods, where applicable, but excluding turnover rent),
(ii) service charges payable by tenants towards covering the
operation and property maintenance expenses of Mandarin
Gallery and (iii) advertising and promotion charges payable by
tenants for advertising and promotional activities for Mandarin
Gallery
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Borrower REIT Trustee, on behalf of OUE H-REIT, in connection with the
OUE H-REIT Debt Facilities
BTA Business Trusts Act, Chapter 31A of Singapore
BTR Business Trusts Regulations
Business Day Any day (other than a Saturday, Sunday or gazetted public
holiday) on which commercial banks are open for business in
Singapore and the SGX-ST is open for trading
C&W Cushman & Wakefield VHS Pte. Ltd.
CAGR Compounded annual growth rate
CBD or Central Business
District
Central business district
CBRE or Independent Market
Research Consultant
CBRE Pte. Ltd.
CDP The Central Depository (Pte) Limited
CIS Code The Code on Collective Investment Schemes issued by the MAS
CMS Licence Capital markets services licence
Committed Occupancy Rate Occupancy rate based on all committed leases in respect of
Mandarin Gallery for the period, including legally binding letters
of offer which have been accepted for vacant units, as a function
of total lettable space (which excludes units which are
undergoing conversion, amalgamation and/or sub-division)
Companies Act Companies Act, Chapter 50 of Singapore
Consideration Stapled
Securities
626,781,999 Stapled Securities to be issued to the Vendor, in part
payment of the purchase price of the Initial Portfolio
Cornerstone Investors Credit Suisse AG, Goldhill, Mr Gordon Tang, Lucille Holdings Pte
Ltd and Splendid Asia Macro Fund
Cornerstone Stapled Securities An aggregate of 247,220,000 Stapled Securities at the Offering
Price subscribed for by the Cornerstone Investors pursuant to the
Cornerstone Subscription Agreements
Cornerstone Subscription
Agreements
The subscription agreements, entered into between the
Managers and the Cornerstone Investors to subscribe for the
Cornerstone Stapled Securities
Deeds The OUE H-REIT Trust Deed, the OUE H-BT Trust Deed and the
Stapling Deed
Depository Services Terms and
Conditions
CDPs depository services terms and conditions in relation to the
deposit of the OUE H-REIT Units and OUE H-BT Units in CDP
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Directors REIT Manager Directors and Trustee-Manager Directors
DPU Distribution per unit
Excluded Commercial Premises Refers to any specific commercial areas in Mandarin Orchard
Singapore which are not subject to the Master Lease Agreement
Executive Officers REIT Manager Executive Officers and Trustee-Manager
Executive Officers
Exempted Agreements The OUE H-REIT Trust Deed, the Stapling Deed, the Property
Sale and Purchase Agreement, the Master Lease Agreement
(including, for the avoidance of doubt, the option term), the Master
Property Management Agreement, the Individual Property
Management Agreement, the Shared Services Agreement, the
Shared Electricity Services Agreement, the Licence Agreement,
the Mandarin Gallery Licence Agreement and the leases set out
in the section Other Related Party Transactions.
Extraordinary Resolution A resolution proposed and passed as such by a majority
consisting of 75.0% or more of the total number of votes cast for
and against such resolution at a meeting of the holders of OUE
H-REIT Units or OUE H-BT Units (as the case may be) duly
convened and held
F&B Food and beverage
FF&E Furniture, fixtures and equipment
FF&E Reserve An amount equal to 3.0% of the anticipated revenue of Mandarin
Orchard Singapore as set out in the agreed budget for that fiscal
year, which may be used and disbursed only in accordance with
the Agreed FF&E Plan
Fixed Rent In respect of Mandarin Orchard Singapore, a fixed rent, payable
under the Master Lease Agreement
Forecast Period 2013 or
FP2013E
The 9-month period from 1 April 2013 and ending
31 December 2013
Full Year 2013 Distribution Full year distribution for 2013, calculated based on the unaudited
pro forma historical income available for distribution from
1 January 2013 to 31 March 2013 and the forecast income
available for distribution for the 9-month Forecast Period 2013
FY The financial year ended or (as the case may be) ending
31 December
FY2014E The financial year ending 31 December 2014
GFA Gross floor area
Gross Operating Profit The gross operating profit of the Hotel, comprising Gross
Operating Revenue less operating expenses
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Gross Operating Revenue The gross operating revenue of the Hotel
Gross Revenue Gross rental payments under the Master LeaseAgreement, which
comprise a Fixed Rent and a Variable Rent, and the Retail
Income from Mandarin Gallery
GST Goods and services tax
Head Lease The lease granted by The Ngee Ann Kongsi (as head lessor) for
99 years commencing from 1 July 1957
Hotel Management Agreement The Original Hotel Management Agreement in respect of
Mandarin Orchard Singapore, as supplemented by a
supplemental agreement to be entered into between the Master
Lessee and the Hotel Manager on the Listing Date
Hotel Manager Singapore Mandarin International Hotels Pte Ltd
Hotel Mandarin Orchard Singapore
Hotels Act Hotels Act, Chapter 127 of Singapore
ICCA International Congress & Convention Association
Income Tax Act Income Tax Act, Chapter 134 of Singapore
Independent Market Research
Report
The Independent Hotel and Retail Market Report as prepared by
CBRE Pte. Ltd.
Individual Property Management
Agreement
The individual property management agreement to be entered
into between the REIT Manager, the REIT Trustee and the
Property Manager pursuant to the Master Property Management
Agreement in respect of Mandarin Gallery and the Excluded
Commercial Premises
Independent Tax Adviser KPMG Services Pte. Ltd.
Independent Valuers C&W and Jones Lang LaSalle, being the Independent Valuers in
respect of the Initial Portfolio
Interested Party Has the meaning ascribed to it in the Property Funds Appendix
Interested Party Transaction Has the meaning ascribed to it in the Property Funds Appendix
Interested Person Has the meaning ascribed to it in the Listing Manual
Interested Person Transaction Has the meaning ascribed to it in the Listing Manual
IRs Integrated resorts
IRAS Inland Revenue Authority of Singapore
Issue Price Issue price of each Stapled Security
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Joint Bookrunners and
Underwriters or the Joint
Bookrunners
Credit Suisse (Singapore) Limited, Goldman Sachs (Singapore)
Pte., Standard Chartered Securities (Singapore) Pte. Limited,
Merrill Lynch (Singapore) Pte. Ltd., Deutsche Bank AG,
Singapore Branch and Oversea-Chinese Banking Corporation
Limited
Joint Global Coordinators and
Issue Managers or the Joint
Global Coordinators
Credit Suisse (Singapore) Limited, Goldman Sachs (Singapore)
Pte. and Standard Chartered Securities (Singapore) Pte.
Limited
Jones Lang LaSalle Jones Lang LaSalle Property Consultants Pte Ltd
km kilometres
Latest Practicable Date 28 June 2013, being the latest practicable date prior to the
lodgement of this Prospectus with the MAS
Lease Income Lease income from Mandarin Orchard Singapore under the
Master Lease Agreement, comprising a Fixed Rent and a Variable
Rent
LHPL Lucille Holdings Pte Ltd
Licence Agreement The licence agreement entered into between the Sponsor and the
Managers in respect of the OUE name and related logos for use
in connection with the business of OUE H-Trust
Listing Date The date of admission of OUE H-Trust to the Official List of the
SGX-ST
Listing Manual The Listing Manual of the SGX-ST
Lock-up Period The period commencing from the Listing Date until the date falling
180 days after the Listing Date (both dates inclusive)
Lock-up Stapled Securities The Sponsor Stapled Securities
LTA Land Transport Authority of Singapore
Mall Mandarin Gallery, part of the initial asset portfolio of OUE H-REIT
Managers The REIT Manager and the Trustee-Manager
Mandarin Gallery The retail mall known as Mandarin Gallery, located at 333A
Orchard Road, Singapore 238897
Mandarin Gallery Licence
Agreement
The licence agreement entered into between the Sponsor and the
REIT Trustee on 10 July 2013 in respect of the Mandarin Gallery
name and related logos in connection with the business of OUE
H-Trust
Mandarin Orchard Singapore The hotel known as Mandarin Orchard Singapore, located at 333
Market Day Any day on which the SGX-ST is open for trading in securities
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Master Lease Agreement The lease agreement to be entered into between the Master
Lessee and the REIT Trustee as trustee of OUE H-REIT and any
subsequent future master lessees (including, without limitation,
OUE H-BT) for Mandarin Orchard Singapore
Master Lessee The Sponsor
Master Lessor The REIT Trustee, in its capacity as trustee of OUE H-REIT, in
respect of Mandarin Orchard Singapore
Master Property Management
Agreement
The master property management agreement dated 10 July 2013
entered into between the REIT Manager, the REIT Trustee and
the Property Manager
MERS Middle East Respiratory Syndrome
Meritus Mandarin Building The building located at 333 Orchard Road, Singapore 238867,
within which Mandarin Orchard Singapore and Mandarin Gallery
are located, comprising the whole of Lot 1546 N of TS 21,
together with the building(s) and structure(s) erected or to be
erected thereon
MICE Meetings, incentives, conventions and exhibitions
MIPL Meritus International Pte. Ltd.
MRT Mass Rapid Transit
NAV Net asset value
Net Property Income or NPI Consists of Gross Revenue less Property Expenses
NLA Net lettable area
OCBC Bank Oversea-Chinese Banking Corporation Limited
Offering The initial public offering of 434,598,000 Stapled Securities by the
REIT Manager and the Trustee-Manager for subscription at the
Offering Price under the Placement Tranche and the Public Offer
Offering Price The issue price of S$0.88 for each Stapled Security under the
Offering
Operating Equipment Items customarily referred to as operating equipment in the hotel
industry including, but are not limited to, glassware, silverware,
cutlery, chinaware, crockery, linen and uniforms as well as those
items generally required for the day-to-day operation of a hotel
Ordinary Resolution A resolution proposed and passed as such by a majority
consisting of more than 50% of the total number of votes cast for
and against such resolution at a meeting of the holders of OUE
H-REIT Units or OUE H-BT Units (as the case may be) duly
convened and held
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Original Hotel Management
Agreement
The long-standing hotel management agreement under which the
Hotel Manager operates Mandarin Orchard Singapore
OUE or the Sponsor Overseas Union Enterprise Limited
OUE H-BT OUE Hospitality Business Trust
OUE H-BT Deposited Property The gross assets of OUE H-BT, including all the authorised
investments of OUE H-BT for the time being held or deemed to be
held by OUE H-Trust under the OUE H-BT Trust Deed
OUE H-BT Trust Deed The trust deed constituting OUE H-BT dated 10 July 2013
OUE H-BT Unit An undivided interest in OUE H-BT as provided for in the OUE
H-BT Trust Deed
OUE H-BT Unit Issue Mandate The general mandate to be given in a general meeting of the
holders of OUE H-BT Units
OUE H-REIT OUE Hospitality Real Estate Investment Trust
OUE H-REIT Debt Facilities A S$630.0 million financing package from Standard Chartered
Bank, Singapore Branch, on a secured basis, comprising the
Term Loan Facilities (as defined herein) and the Revolving Credit
Facility (as defined herein)
OUE H-REIT Deposited Property The gross assets of OUE H-REIT, including all the Authorised
Investments of OUE H-REIT for the time being held or deemed to
be held by OUE H-REIT under the OUE H-REIT Trust Deed
OUE H-REIT Trust Deed The OUE H-REIT trust deed dated 10 July 2013 made between
the REIT Manager and the REIT Trustee constituting OUE
H-REIT
OUE H-REIT Unit An undivided interest in OUE H-REIT as provided for in the OUE
H-REIT Trust Deed
OUE H-REIT Unit Issue Mandate The general mandate to be given in a general meeting of the
holders of OUE H-REIT Units
OUE H-Trust OUE Hospitality Trust, the stapled group comprising OUE H-REIT
and OUE H-BT
Over-Allotment Option The over-allotment option granted by the Stapled Security Lender
to the Joint Bookrunners
Participating Banks OCBC Bank, DBS Bank Ltd. (including POSB) and United
Overseas Bank Limited and its subsidiary, Far Eastern Bank
Limited
Performance Fee 4.0% per annum of the Net Property Income in the relevant
financial year
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Placement Tranche The international placement of 383,462,000 Stapled Securities to
investors, including institutional and other investors in Singapore
and elsewhere outside the United States in reliance on
Regulation S
PRC Peoples Republic of China
Profit Forecast and Profit
Projection
The forecast and projected results for Forecast Period 2013 and
Projection Year 2014 or FY2014E The financial year ending 31 December 2014
Property Expenses Comprises (i) property taxes; (ii) property management fee, and
(iii) other property operating expenses
Property Funds Appendix Appendix 6 to the CIS Code issued by the MAS
Property Manager OUE Property Management Pte. Ltd.
Property Manager Executive
Officer
An executive officer of the Property Manager
Property Sale and Purchase
Agreement
The sale and purchase agreement dated 10 July 2013 entered
into between OUE and the REIT Trustee on behalf of OUE
H-REIT for the sale and purchase of the Initial Portfolio
Public Offer 51,136,000 Stapled Securities offered by way of a public offer in
Singapore
Qualifying Stapled
Securityholder
A Stapled Securityholder who is:
a non-corporate entity (excluding a Singapore
partnership) that is registered or constituted in
Singapore, such as:
(i) an institution, an authority, a person or a fund
specified in the First Schedule of the Income Tax
Act;
(ii) a co-operative society registered under the Co-
operative Societies Act, Chapter 62 of Singapore;
(iii) a trade union registered under the Trade Unions
Act, Chapter 333 of Singapore;
(iv) a charity registered under the Charities Act,
Chapter 37 of Singapore or established by an Act of
Parliament; and
a Singapore branch of a foreign company which has
obtained a letter of approval from the IRAS granting a
waiver from tax deducted at source in respect of
distributions from OUE H-REIT
315
Recognised Stock Exchange Any stock exchange of repute in any part of the world
Regulation S Regulation S under the Securities Act
REIT Real estate investment trust
REIT Manager OUE Hospitality REIT Management Pte. Ltd.
REIT Manager Board The board of directors of the REIT Manager
REIT Manager Director A director of the REIT Manager
REIT Manager Executive Officer An executive officer of the REIT Manager
REIT Trustee RBC Investor Services Trust Singapore Limited, in its capacity as
trustee of OUE H-REIT
Related Party Refers to an interested person as defined in the Listing Manual
and/or, as the case may be, an interested party as defined in the
Property Funds Appendix.
Related Party Leases Certain related corporations of the REIT Manager which have
entered into lease agreements in relation to leases of premises at
Related Party Transactions Refers to interested person transactions (as defined in the
Listing Manual) and/or, as the case may be, interested party
transactions (as defined in the Property Funds Appendix)
Relevant Asset For the purposes of the Sponsor ROFR, means a completed
income-producing real estate which is used primarily for
hospitality and/or hospitality-related purposes, where real estate
used for hospitality purposes includes hotels, serviced
residences, resorts and other lodging facilities, whether in
existence by themselves as a whole or as part of larger mixed-use
developments, which may include commercial, entertainment,
retail and leisure facilities, and properties which are used for
hospitality-related purposes include retail and/or commercial
assets which are either complementary or adjoining to hospitality
assets which are owned by OUE H-REIT or which OUE H-REIT
has committed to buy. Where such real estate is held by a
Relevant Entity through a SPV established solely to own such real
estate, the term Relevant Asset shall refer to the shares or
equity interests, as the case may be, in that SPV. Where such real
estate is co-owned by a Relevant Entity as a tenant-in-common,
the term Relevant Asset shall refer to the ownership share of the
Relevant Entity in such real estate.
Relevant Entity For the purposes of the Sponsor ROFR, means the Sponsor or
any of its existing or future subsidiaries or existing or future
private funds managed by the Sponsor
Relevant Period FY2010, FY2011 and FY2012 and the three months ended 31
March 2012 and 31 March 2013
316
Reporting Auditors KPMG LLP
Retail Income Consists of retail rental income and other income attributable to
the operation of Mandarin Gallery
Retained Taxable Income The amount of Taxable Income not distributed
Revolving Credit Facility Arevolving credit facility obtained from Standard Chartered Bank,
Singapore Branch, by the REIT Trustee as Borrower on behalf of
OUE H-REIT
RevPAR Room revenue per Available Room, computed based on the total
room revenue of Mandarin Orchard Singapore divided by the total
number of Available Rooms for the relevant period
ROFR Right of first refusal
S$, $, or Singapore dollars and
cents
Singapore dollars and cents, the lawful currency of the Republic
of Singapore
SARS Severe acute respiratory syndrome
Securities Account Securities account or sub-account maintained by a Depositor (as
defined in Section 130A of the Companies Act) with CDP
Securities Act U.S. Securities Act of 1933, as amended
Settlement Date The date and time on which the Stapled Securities are issued as
settlement under the Offering
SFA Securities and Futures Act, Chapter 289 of Singapore
SFR(BT) Securities and Futures (Offers of Investments) (Business Trusts)
(No. 2) Regulations 2005
SGX-ST Singapore Exchange Securities Trading Limited
SLA Singapore Land Authority
Sponsor or OUE Overseas Union Enterprise Limited
Sponsor Group OUE and its subsidiaries, related corporations and associates
Sponsor Initial Stapled Security The total number of Stapled Securities in issue as at the date of
this Prospectus
Sponsor ROFR The ROFR granted by the Sponsor to OUE H-Trust which
provides OUE H-Trust with access to potential future acquisition
opportunities which are used primarily for hospitality and/or
hospitality related purposes
Sponsor ROFR Properties Properties owned or majority controlled by the Sponsor which fall
within the Sponsor ROFR
317
Sponsor Stapled Securities The Sponsor Initial Stapled Security and the Consideration
Stapled Securities
SPV Special purpose vehicle
sq ft Square feet
sq m Square metres
Stabilising Manager Goldman Sachs (Singapore) Pte.
Stapling Deed The stapling deed dated 10 July 2013 made between the REIT
Manager, the REIT Trustee and the Trustee-Manager
Stapled Securities Stapled Securities of OUE H-Trust, each comprising one OUE
H-REIT Unit and one OUE H-BT Unit stapled together under the
terms of the Stapling Deed
Stapled Security Lender The Sponsor
Stapled Securityholders The holders of the Stapled Securities
STB Singapore Tourism Board
Substantial holders of OUE
H-BT Units
Any holder of OUE H-BT Units with an interest in not less than
5.0% of all OUE H-BT Units in issue
Substantial holders of OUE
H-REIT Units
Any holder of OUE H-REIT Units with an interest in not less than
5.0% of all OUE H-REIT Units in issue
Substantial shareholder Any shareholder of the Trustee-Manager with an interest in not
less than 5.0% of the shares in issue
Substantial Stapled
Securityholder
Any holder of the Stapled Securities with an interest in not less
than 5.0% of all the Stapled Securities in issue
Take-Over Code The Singapore Code on Take-Overs and Mergers
Tax Ruling The tax ruling dated 6 June 2013 issued by the IRAS on the
taxation of OUE H-REIT and its Stapled Securityholders
Taxable Income Property-related income chargeable to tax under the Income Tax
Act after deduction of allowable expenses and capital allowances,
if any
Term Loan Facilities Term loan facilities of an amount of S$587.0 million consisting of
S$294.0 million for a five-year tenure and S$293.0 million for a
three-year tenure obtained from Standard Chartered Bank,
Singapore Branch, by the REIT Trustee, as Borrower on behalf of
OUE H-REIT
318
Total Project Costs The sum of the following:
(i) construction cost based on the project final account
prepared by the project quantity surveyor;
(ii) principal consultants fees, including payments to the
projects architect, civil and structural engineer,
mechanical and electrical engineer, quantity surveyor
and project manager;
(iii) the cost of obtaining all approvals for the project;
(iv) site staff costs;
(v) interest costs on borrowings used to finance project
cashflows that are capitalised to the project in line with
generally accepted accounting practices in Singapore; and
(vi) any other costs including contingency expenses which
meet the definition of Total Project Costs and can be
capitalised to the project in accordance with generally
accepted accounting practices in Singapore.
Trust Companies Act Trust Companies Act, Chapter 336 of Singapore
Trustee-Manager OUE Hospitality Trust Management Pte. Ltd.
Trustee-Manager Board The board comprising the Trustee-Manager Directors
Trustee-Manager Director A director on the Trustee-Manager Board
Trustee-Manager Executive
Officer
An executive officer of the Trustee-Manager
Trustees Act Trustees Act, Chapter 337 of Singapore
Turnover Rent In relation to Mandarin Gallery, rent which is generally calculated
as a percentage of the tenants gross turnover. In some cases,
turnover rent may be subject to certain thresholds before it is
payable
Unaudited Pro Forma
Information
The unaudited historical pro forma financial information
Unclaimed Monies Account A special account which holds any unclaimed monies payable to
holders of OUE H-REIT Units or, as the case may be, OUE H-BT
Units
Underwriting Agreement The underwriting agreement entered into between the Joint
Bookrunners, the REIT Manager, the Trustee-Manager and the
Sponsor on 18 July 2013
Underwriting, Selling and
Management Commission
An underwriting, selling and management, commission (including
incentive fees) of up to S$18.0 million excluding GST
Unstapling The process that results in a OUE H-REIT Unit no longer being
stapled to a OUE H-BT Unit
319
U.S. or United States United States of America
Variable Rent In relation to Mandarin Orchard Singapore, a stipulated
percentage of the Hotels Gross Operating Revenue and Gross
Operating Profit, less the sum of the Fixed Rent, payable under
the Master Lease
Vendor OUE
1Q2012 The three months ended 31 March 2012
1Q2013 The three months ended 31 March 2013
3Q2013 The three months ended 30 September 2013
4Q2012 The three months ended 31 December 2012
4Q2013 The three months ended 31 December 2013
Words importing the singular shall, where applicable, include the plural and vice versa. Words
importing the masculine gender shall, where applicable, include the feminine and neuter genders.
References to persons shall include corporations.
Any reference in this Prospectus to any enactment is a reference to that enactment for the time
being amended or re-acted.
Any reference to a time of day in this Prospectus is made by 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.
Information contained in the Managers and the Sponsors website does not constitute part of this
Prospectus.
320
APPENDIX A
REPORTING AUDITORS REPORT ON THE PROFIT FORECAST
AND PROFIT PROJECTION
The Board of Directors
(in its capacity as Manager of OUE Hospitality Real Estate Investment Trust)
333 Orchard Road
#33-00
Singapore 238867
RBC Investor Services Trust Singapore Limited
(in its capacity as Trustee of OUE Hospitality Real Estate Investment Trust)
20 Cecil Street
#28-01 Equity Plaza
Singapore 049705
18 July 2013
Dear Sirs
Letter from the Reporting Auditors on the Profit Forecast for the Period from 1 April 2013
to 31 December 2013 and the Profit Projection for the Year Ending 31 December 2014
This letter has been prepared for inclusion in the prospectus (the Prospectus) to be issued in
connection with the offering of stapled securities in OUE Hospitality Trust, comprising OUE
Hospitality Real Estate Investment Trust (OUE H-REIT) and OUE Hospitality Business Trust
(OUE H-BT) at the offering price of S$0.88 per stapled security (the Offering).
The directors of OUE Hospitality REIT Management Pte. Ltd. (the Directors) are responsible for
the preparation and presentation of the forecast statement of total return of OUE H-REIT for the
period from 1 April 2013 to 31 December 2013 (the Profit Forecast) and the projected statement
of total return of OUE H-REIT for the year ending 31 December 2014 (the Profit Projection), as
set out on pages 119 and 120 of the Prospectus, which have been prepared on the basis of the
assumptions set out on pages 120 to 130 of the Prospectus.
We have examined the Profit Forecast and Profit Projection of OUE H-REIT as set out on pages
119 and 120 of the Prospectus in accordance with Singapore Standard on Assurance
Engagements (SSAE) 3400 The Examination of Prospective Financial Information. The
Directors are solely responsible for the Profit Forecast and Profit Projection including the
assumptions set out on pages 120 to 130 of the Prospectus on which they are based.
Profit Forecast
Based on our examination of the evidence supporting the relevant assumptions, nothing has come
to our attention which causes us to believe that these assumptions do not provide a reasonable
basis for the Profit Forecast. Further, in our opinion the Profit Forecast, so far as the accounting
policies and calculations are concerned, are properly prepared on the basis of the assumptions,
are consistent with the accounting policies set out on pages C-12 to C-18 of the Prospectus, and
are presented in accordance with the applicable presentation principles of Recommended
Accounting Practice (RAP) 7 Reporting Framework for Unit Trusts (but not all the required
disclosures) issued by the Institute of Singapore Chartered Accountants, which is the framework
to be adopted by OUE H-REIT in the preparation of its financial statements.
A-1
Profit Projection
The Profit Projection is intended to show a possible outcome based on the stated assumptions.
As OUE H-REIT is newly established without any history of activities and because the length of
the period covered by the Profit Projection extends beyond the period covered by the Profit
Forecast, the assumptions used in the Profit Projection (which include hypothetical assumptions
about future events which may not necessarily occur) are more subjective than would be
appropriate for profit forecast. The Profit Projection does not therefore constitute a profit forecast.
Based on our examination of the evidence supporting the relevant assumptions, nothing has come
to our attention which causes us to believe that these assumptions do not provide a reasonable
basis for the Profit Projection. Further, in our opinion the Profit Projection, so far as the accounting
policies and calculations are concerned, are properly prepared on the basis of the assumptions,
are consistent with the accounting policies set out on pages C-12 to C-18 of the Prospectus, and
are presented in accordance with the applicable presentation principles of RAP 7 (but not all the
required disclosures), which is the framework to be adopted by OUE H-REIT in the preparation of
its financial statements.
Events and circumstances frequently do not occur as expected. Even if the events anticipated
under the hypothetical assumptions described above occur, actual results are still likely to be
different from the Profit Forecast and Project Projection since other anticipated events frequently
do not occur as expected and the variation may be material. The actual results may therefore differ
materially from those forecasted and projected. For the reasons set out above, we do not express
any opinion as to the possibility of achievement of the Profit Forecast and Profit Projection.
Attention is drawn, in particular, to the risk factors set out on pages 56 to 86 of the Prospectus
which describe the principal risks associated with the Offering, to which the Profit Forecast and
Profit Projection relate and the sensitivity analysis of the Profit Forecast and Profit Projection set
out on pages 130 to 132 of the Prospectus.
Yours faithfully,
KPMG LLP
Public Accountants
and Chartered Accountants
(Partner-in-charge: Tan Huay Lim)
Singapore
A-2
APPENDIX B
REPORTING AUDITORS REPORT ON THE UNAUDITED
PRO FORMA FINANCIAL INFORMATION
(in its capacity as Manager of OUE Hospitality Real Estate Investment Trust)
333 Orchard Road
#33-00
Singapore 238867
(in its capacity as Trustee of OUE Hospitality Real Estate Investment Trust)
20 Cecil Street
#28-01 Equity Plaza
Singapore 049705
18 July 2013
We have completed our assurance engagement to report on the compilation of unaudited pro
forma financial information set out on in Appendix C of the prospectus (the Prospectus) to be
issued in connection with the offering of stapled securities in OUE Hospitality Trust, comprising
OUE Hospitality Real Estate Investment Trust (OUE H-REIT) and OUE Hospitality Business
Trust (OUE H-BT) (the Offering). The unaudited pro forma financial information of OUE H-REIT,
comprising the unaudited pro forma statements of total return for the years ended 31 December
2010, 2011 and 2012 and the three months ended 31 March 2012 and 2013; the unaudited pro
forma statements of cash flows for the year ended 31 December 2012 and the three months ended
31 March 2013; and the unaudited pro forma statements of financial position as at 31 December
2012 and 31 March 2013, and related notes (collectively, the Unaudited Pro Forma Financial
Information), has been prepared for illustrative purposes only and is based on certain
assumptions after making certain adjustments. The applicable criteria (the Criteria) on the basis
of which OUE Hospitality REIT Management Pte. Ltd. (the Manager) has compiled the pro forma
financial information are described in Section B of Appendix C.
The pro forma financial information has been compiled by the Manager to illustrate the impact on:
(a) the total return of OUE H-REIT if it had purchased the properties comprising Mandarin
Orchard Singapore (MOS) and Mandarin Gallery (collectively, the Properties) and entered
into a master lease agreement in respect of MOS (the Master Lease Agreement) under the
same terms set out in the Prospectus on 1 January 2010;
(b) the cash flows of OUE H-REIT if it had purchased the Properties and entered into the Master
Lease Agreement under the same terms set out in the Prospectus on 1 January 2012; and
(c) the financial position of OUE H-REIT if it had purchased the Properties and entered in the
Master Lease Agreement under the same terms set out in the Prospectus on 31 December
2012 and 31 March 2013.
B-1
The dates on which the transactions described above are assumed to have been undertaken, are
hereinafter collectively referred to as the Relevant Dates.
As part of this process, information about the pro forma financial information has been extracted
by the Manager from the divisional financial statements of Overseas Union Enterprise Limited
(OUE) (which owned the Properties prior to their acquisition by OUE H-REIT) relating to the
Properties for the years ended 31 December 2010, 2011 and 2012 and the three months ended
31 March 2012 and 2013. The aforementioned financial statements are hereinafter collectively
referred to as the Relevant Financial Statements. The auditors reports on the financial
statements of OUE for the years ended 31 December 2010, 2011 and 2012 have been published.
The review report on the financial statements of OUE for the three months ended 31 March 2013
has not been published.
The Managers responsibility for the pro forma financial information
The Manager is responsible for compiling the pro forma financial information on the basis of the
Criteria.
Reporting Auditors responsibility
Our responsibility is to express an opinion about whether the pro forma financial information has
been compiled, in all material respects, by the Manager on the basis of the Criteria.
We conducted our engagement in accordance with Singapore Standard on Assurance
Engagements (SSAE) 3420 Assurance Engagement to Report on the Compilation of Pro Forma
Financial Information Included in a Prospectus, issued by the Institute of Singapore Chartered
Accountants (the ISCA). This standard requires that the Reporting Auditors comply with ethical
requirements and plan and perform procedures to obtain reasonable assurance about whether the
Manager has compiled, in all material respects, the pro forma financial information on the basis
of the Criteria.
For purposes of this engagement, we are not responsible for updating or reissuing any reports or
opinions on any historical financial information used in compiling the pro forma financial
information, nor have we, in the course of this engagement, performed an audit or review of the
financial information used in compiling the pro forma financial information.
The purpose of pro forma financial information included in a prospectus is solely to illustrate the
impact of a significant event or transaction on unadjusted financial information of the entity as if
the event had occurred or the transaction had been undertaken at an earlier date selected for
purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome
of the event or transaction at the Relevant Dates would have been presented.
A reasonable assurance engagement to report on whether the pro forma financial information has
been compiled, in all material respects, on the basis of the Criteria involves performing
procedures to assess whether the Criteria used by the Manager in the compilation of the pro forma
financial information provide a reasonable basis for presenting the significant effects directly
attributable to the event or transaction, and to obtain sufficient appropriate evidence about
whether:
the related pro forma adjustments give appropriate effect to those Criteria; and
the pro forma financial information reflects the proper application of those adjustments to the
unadjusted financial information.
B-2
The procedures selected depend on the Reporting Auditors judgement, having regard to his
understanding of the nature of the event or transaction in respect of which the pro forma financial
information has been compiled, and other relevant engagement circumstances.
The engagement also involves evaluating the overall presentation of the pro forma financial
information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Opinion
In our opinion:
(a) the Unaudited Pro Forma Financial Information has been properly prepared:
(i) from the information in the Relevant Financial Statements (which were prepared in
accordance with Singapore Financial Reporting Standards) and is presented in
accordance with the relevant presentation principles of Recommended Accounting
Practice 7 Reporting Framework for Unit Trusts issued by the ISCA;
(ii) in a manner consistent with both the format of the financial statements and the
accounting policies of OUE H-REIT; and
(iii) on the basis of the Criteria set out in Section B of Appendix C of the Prospectus; and
(b) each material adjustment made to the information used in the preparation of the Unaudited
Pro Forma Financial Information is appropriate for the purpose of preparing such financial
information.
This letter has been prepared for the inclusion in the Prospectus of OUE Hospitality Trust to be
issued in connection with the offering of stapled securities in OUE Hospitality Trust.
KPMG LLP
Public Accountants
and Chartered Accountants
(Partner-in-charge: Tan Huay Lim)
Singapore
B-3
APPENDIX C
(A) Introduction
The Unaudited Pro Forma Financial Information has been prepared for inclusion in the
prospectus (the Prospectus) to be issued in connection with the proposed listing of OUE
Hospitality Trust (OUE H-Trust) on the Singapore Exchange Securities Trading Limited (the
SGX-ST).
OUE H-Trust is a stapled group comprising OUE Hospitality Real Estate Investment Trust
(OUE H-REIT) and OUE Hospitality Business Trust (OUE H-BT). OUE H-REIT is a
Singapore-based real estate investment trust constituted pursuant to a trust deed dated
10 July 2013 (OUE H-REIT Trust Deed) made between OUE Hospitality REIT Management
Pte. Ltd. (the REIT Manager) and RBC Investor Services Trust Singapore Limited (the
REIT Trustee). OUE H-REIT is established with the principal investment strategy of
investing, directly or indirectly, in a portfolio of income-producing real estate used primarily
for hospitality and/or hospitality-related purposes, whether wholly or partially, as well as
real-estate related assets. OUE H-BT is a Singapore-based business trust constituted by a
trust deed dated 10 July 2013 (OUE H-BT Trust Deed) and will be managed by OUE
Hospitality Trust Management Pte. Ltd. (the Trustee-Manager) which will be dormant as at
the Listing Date. The securities in each of OUE H-REIT and OUE H-BT are stapled together
under the terms of a stapling deed dated 10 July 2013 entered into between the REIT
Manager, the REIT Trustee and the Trustee-Manager (Stapling Deed) and cannot be traded
separately. Each stapled security in OUE H-Trust (the Stapled Security) comprises a unit
in OUE H-REIT (OUE H-REIT Unit) and a unit in OUE H-BT (OUE H-BT Unit).
Under the proposed initial public offering of the Stapled Securities in the OUE H-Trust,
434,598,000 Stapled Securities (the Offering) will be offered at an issue price of S$0.88
(the Offering Price) per Stapled Security, payable in full on application. The Offering
consists of (i) an international placement of 383,462,000 Stapled Securities to investors,
including institutional and other investors in Singapore, and (ii) an offering of 51,136,000
Stapled Securities to the public in Singapore. Separate from the Offering, Overseas Union
Enterprise Limited (OUE) as vendor (the Vendor) of the Initial Portfolio (the Initial
Portfolio, as defined herein) will receive an aggregate of 626,781,999 Stapled Securities at
the Offering Price in part satisfaction of the purchase consideration for the Initial Portfolio. In
addition, concurrently with, but separate from the Offering, cornerstone investors have
entered into conditional subscription agreements to subscribe for an aggregate of
247,220,000 Stapled Securities at the Offering Price.
The Initial Portfolio of OUE H-REIT as at the Listing Date comprise Mandarin Orchard
Singapore (the Hotel) and Mandarin Gallery (together with the Hotel, the Properties). OUE
H-REIT will acquire the Properties from the Vendor.
On the Listing Date, OUE H-REIT will enter into a master lease agreement (the Master
Lease Agreement) with OUE (the Master Lessee of the Hotel) to lease the Hotel. The initial
term of the Master Lease Agreement is 15 years from the Listing Date with an option for
renewal for a further term of 15 years. OUE H-REIT will enter into a property management
agreement (the Property Management Agreement) with OUE Property Management Pte.
Ltd. (the Property Manager) in respect of Mandarin Gallery and the Excluded Commercial
Premises.
C-1
Details on the REIT Managers management fees, the REIT Trustees fee, the Property
Managers management fees, and the lease payments under the Master Lease Agreement
are set out in Section E.
(B) Basis of Preparation of Pro Forma Financial Information
No financial statements of OUE H-Trust have been prepared for the financial years ended 31
December 2010, 31 December 2011 and 31 December 2012 and periods ended 31 March
2012 and 2013 as OUE H-REIT and OUE H-BT were established on 10 July 2013.
No pro forma financial information of OUE H-BT has been presented as it will be dormant as
at the Listing Date. Accordingly, no consolidated pro forma financial information for OUE
H-Trust has been presented.
The unaudited pro forma financial information of OUE H-REIT set out in this report has been
prepared for illustrative purposes only and based on certain assumptions, after making
certain adjustments, and shows the Unaudited Pro Forma Statements of Total Return of OUE
H-REIT for the years ended 31 December 2010, 2011 and 2012 and the three months ended
31 March 2012 and 2013; the Unaudited Pro Forma Statements of Cash Flows of OUE
H-REIT for the year ended 31 December 2012 and the three months ended 31 March 2013;
and the Unaudited Pro Forma Statements of Financial Position of OUE H-REIT as at 31
December 2012 and 31 March 2013.
The Unaudited Pro Forma Statements of Total Return for the years ended 31 December
2010, 2011 and 2012 and the three months ended 31 March 2012 and 2013 reflect the
financial performance of OUE H-REIT, assuming OUE H-REIT had purchased the Properties
and entered into the Master Lease Agreement on 1 January 2010, pursuant to the terms set
out in the prospectus to be issued in connection with the offering of Stapled Securities in
OUE H-Trust (the Prospectus).
The Unaudited Pro Forma Statements of Cash Flows for the year ended 31 December 2012
and the three months ended 31 March 2013 reflect the cash flows of OUE H-REIT, assuming
OUE H-REIT had purchased the Properties and entered into the Master Lease Agreement on
1 January 2012, pursuant to the terms set out in the Prospectus.
The Unaudited Pro Forma Statements of Financial Position as at 31 December 2012 and 31
March 2013 reflect the financial position of OUE H-REIT, assuming OUE H-REIT had
purchased the Properties and entered into the Master Lease Agreement on 31 December
2012 and 31 March 2013 respectively, pursuant to the terms set out in the Prospectus.
The Unaudited Pro Forma Statements of Total Return, Unaudited Pro Forma Statements of
Cash Flows and Unaudited Pro Forma Statements of Financial Position (collectively, the
Unaudited Pro Forma Financial Information) have been prepared on the basis of the
accounting policies set out in Section D and is to be read in conjunction with Section E. In
addition, the Unaudited Pro Forma Financial Information has been prepared based on the
assumptions that the Stapled Securities are issued at the Offering Price and that the
over-allotment option is exercised.
The objective of the Unaudited Pro Forma Financial Information is to show what the financial
performance, cash flows and financial position might have been, had OUE H-REIT as
described above existed at an earlier date. However, the Unaudited Pro Forma Financial
Information is not necessarily indicative of the financial performance, cash flows and
financial position that would have been attained had OUE H-REIT actually existed earlier.
The Unaudited Pro Forma Financial Information, because of its nature, may not give a true
picture of OUE H-REITs actual financial performance, cash flows or financial position.
C-2
In preparing the unaudited pro forma financial information of OUE H-REIT for the years
ended 31 December 2010, 2011 and 2012 and the periods ended 31 March 2012 and 2013,
certain assumptions have been applied on (i) the unaudited divisional financial information
of the Hotel and Mandarin Gallery for the years ended 31 December 2010, 2011 and 2012,
which form part of the audited financial statements of the Vendor for the same period; and
(ii) the unaudited divisional financial information of the Hotel and Mandarin Gallery for the
periods ended 31 March 2012 and 2013, which form part of the unaudited financial
statements of the Vendor for the same period. The unaudited divisional financial statements
of the Hotel and Mandarin Gallery are hereinafter referred to as the Relevant Financial
Statements.
The audited financial statements of the Vendor for the years ended 31 December 2010, 2011
and 2012 were prepared in accordance with Singapore Financial Reporting Standards and
were audited by KPMG Singapore in accordance with auditing standards generally accepted
in Singapore. The auditors reports on the aforementioned financial statements of the
Vendor, which were published, were not subject to any qualifications, modifications or
disclaimers.
The unaudited financial statements of the Vendor for the period ended 31 March 2013 were
prepared in accordance with Singapore Financial Reporting Standards and were reviewed by
KPMG Singapore in accordance with auditing standards generally accepted in Singapore.
The review report on the aforementioned financial statements of the Vendor, which was not
published, was not subject to any qualifications, modifications or disclaimers.
The Unaudited Pro Forma Statements of Total Return have been prepared to reflect the
and entered into the Master Lease Agreement on 1 January 2010.
In arriving at the Unaudited Pro Forma Statements of Total Return for each of the years or
periods presented, the following key assumptions and adjustments were made:
Gross revenue is assumed to be computed based on the terms of the Master Lease
Agreement as set out in Section E note (d), which have been applied to the revenue in
the unaudited divisional financial statements of the Vendor relating to the Hotel, after
making certain adjustments as set out below:
FY2010 FY2011 FY2012 1Q2012 1Q2013
S$000 S$000 S$000 S$000 S$000
Revenue 133,130 151,096 154,410 37,881 37,451
Gross profit 72,929 86,912 87,652 21,540 20,644
C-3
The variable rent component of OUE H-REITs gross revenue derived from the Master
Lessee is computed as follows:
FY2010 FY2011 FY2012 1Q2012 1Q2013
S$000 S$000 S$000 S$000 S$000
33.0% of revenue
(1)
43,933 49,862 50,955 12,501 12,359
27.5% of gross profit
(1)
20,055 23,900 24,105 5,923 5,677
63,988 73,762 75,060 18,424 18,036
Less: Fixed rent (45,000) (45,000) (45,000) (11,250) (11,250)
Variable rent 18,988 28,762 30,060 7,174 6,786
Note:
(1) The revenue and gross operating profit of the Hotel on which OUE H-REITs gross revenue from the
Master Lessee is derived based on the terms of the Master Lease Agreement as set out in Section E
note (d).
FY2010 FY2011 FY2012 1Q2012 1Q2013
S$000 S$000 S$000 S$000 S$000
OUE H-REITs gross
revenue comprising
those derived from:
Master Lessee
based on terms of
Master Lease
Agreement
Fixed rent 45,000 45,000 45,000 11,250 11,250
Variable rent 18,988 28,762 30,060 7,174 6,786
63,988 73,762 75,060 18,424 18,036
95,970 107,593 107,811 26,764 26,633
Property tax is assumed to be the amounts incurred by the Vendor on the Properties in
the relevant period based on the Relevant Financial Statements, after making certain
adjustments as set out below:
FY2010 FY2011 FY2012 1Q2012 1Q2013
S$000 S$000 S$000 S$000 S$000
Property tax
Based on the
Relevant Financial
Statements 5,404 6,590 5,846 1,519 1,530
Pro forma
adjustments
(1)
(242) (565) 733 126 116
Adjusted balance 5,162 6,025 6,579 1,645 1,646
Note:
(1) Adjustments to exclude overprovisions or underprovisions in respect of prior years.
C-4
Insurance expense is assumed to be the amounts incurred by the Vendor on the
Properties in the relevant period based on the Relevant Financial Statements;
Property expenses comprises property expenses (other than property tax and
insurance expense) of Mandarin Gallery which include mainly marketing expenses,
utilities expenses, property maintenance expenses, and are based on the amounts
incurred on Mandarin Gallery;
REIT Managers management fees are based on the formula as set out in Section E
note (a);
REIT Trustees fee is based on the formula as set out in Section E note (b);
OUE H-REIT entered into the Property Management Agreement on 1 January 2010.
Property Managers management fees are based on the formula as set out in Section
E note (c);
Other trust expenses comprise annual listing fee, registry fee, audit and tax advisory
fees, valuation fees, costs associated with the preparation and distribution of reports to
holders of Stapled Securities, investor communication costs and miscellaneous
expenses. Other trust expenses of S$2,161,000 are assumed to be incurred by OUE
H-REIT for each of the years ended 31 December 2010, 2011 and 2012 and S$540,000
for each of the three months ended 31 March 2012 and 2013;
Interest income on cash and cash equivalents is based on an effective interest rate of
approximately 0.2% per annum;
Interest expense on borrowings is based on an effective interest rate of approximately
2.5% per annum (inclusive of all margins and debt-related transaction costs) and a
principal of S$587,000,000 for the years ended 31 December 2010, 2011 and 2012 and
the three months ended 31 March 2012 and 2013;
The fair value of derivatives entered into by OUE H-REIT is assumed to be zero;
100.0% of the taxable income available for distribution to the holders of the Stapled
Securities is distributed;
OUE H-REIT is not taxed on the taxable income that is distributed to holders of the
Stapled Securities;
Properties are acquired at an estimated aggregate purchase price of S$1,705,000,000
and the related transaction costs are estimated to be S$75,000;
Properties are revalued to S$1,756,000,000 based on an independent valuation by
Cushman & Wakefield VHS Pte. Ltd. as of 31 March 2013;
The aggregate valuation of the Properties of S$1,756,000,000 remained unchanged
throughout the periods presented except to the extent of the assumed capital
expenditure described below; and
C-5
Capital expenditure incurred for the respective years/periods are assumed to be paid
and capitalised as part of the value of the relevant Property and as such, would increase
the value of OUE H-REIT Deposited Property for the purposes of computation of the
management fees payable to REIT Manager and the fees payable to REIT Trustee.
Capital expenditure of S$2,865,000, S$2,110,000, S$2,638,000 and S$24,000 were
incurred by OUE H-REIT on the Properties for the years ended 31 December 2010,
2011 and 2012 and the three months ended 31 March 2013 respectively.
The Unaudited Pro Forma Statements of Cash Flows have been prepared to reflect the
and entered into the Master Lease Agreement on 1 January 2012.
In arriving at the Unaudited Pro Forma Statements of Cash Flows for each of the year or
period presented, the following key assumptions were made:
Properties are acquired at an estimated aggregate purchase price of S$1,705,000,000;
Transaction costs relating to the acquisition of the Properties are estimated to be
S$75,000 and are assumed to be funded by proceeds raised from the Offering;
Assets (comprising cash) and liabilities (comprising rental deposits of Mandarin
Gallery) directly attributable to the Properties, amounting to S$5,458,000 as at
1 January 2012, were also acquired by OUE H-REIT;
An amount of S$587,000,000 of the term loan facility was drawn down to partially fund
the acquisition of the Properties;
The date that OUE H-REITs borrowings were drawn down and the Stapled Securities
were issued correspond to the timing of the purchase of the Properties on 1 January
2012;
Interest expense on borrowings is paid on the last day of the period presented;
100.0% of the management fees payable to the REIT Manager are in the form of
Stapled Securities and are paid on a quarterly basis, in arrears in the following quarter.
Management fees payable to the Property Manager in cash are paid on a monthly basis,
in arrears in the following month;
Capital expenditure incurred for the year/period are assumed to be paid and capitalised
as part of the value of the relevant Property and as such, would increase the value of
OUE H-REIT Deposited Property for the purposes of computation of the management
fees payable to REIT Manager and the fees payable to REIT Trustee. Capital
expenditure of S$2,638,000 and S$24,000 were incurred by OUE H-REIT on the
Properties for the year ended 31 December 2012 and the three months ended 31 March
2013 respectively;
Proceeds raised from the Offering amounted to S$599,980,000;
Issue costs relating to the Offering are estimated to be S$21,309,000 and are assumed
to be funded by proceeds raised from the Offering;
OUE H-REIT entered into the Property Management Agreement on 1 January 2012;
C-6
100.0% of the taxable income available for distribution to the holders of the OUE
H-REIT Units is distributed for each of the periods presented. Distributions to holders
of the Stapled Securities are paid on a quarterly basis, in arrears; and
OUE H-REIT is not taxed on the taxable income that is distributed to holders of the
Stapled Securities.
The Unaudited Pro Forma Statements of Financial Position of OUE H-REIT have been
prepared on the basis that OUE H-REIT purchased the Properties and entered into the
Master Lease Agreement on 31 December 2012 and 31 March 2013.
In arriving at the Unaudited Pro Forma Statements of Financial Position for each of the year
or period presented, the following key assumptions were made:
Properties are acquired at estimated purchase price of S$1,705,000,000 and the
related transaction costs are estimated to be S$75,000;
Properties are revalued to S$1,756,000,000 based on an independent valuation by
Cushman & Wakefield VHS Pte. Ltd. as of 31 March 2013;
S$551,568,000 of the purchase consideration will be settled in the form of Stapled
Securities to be issued to the Vendor and the remaining consideration of
S$1,153,432,000 will be settled in cash;
Assets (comprising cash) and liabilities (comprising rental deposits of Mandarin
Gallery) directly attributable to the Properties, amounting to S$5,963,000 and
S$5,963,000 as at 31 December 2012 and S$5,860,000 and S$5,860,000 as at 31
March 2013 respectively, were also acquired by OUE H-REIT;
Proceeds raised from the Offering amounted to S$599,980,000;
Issue costs relating to the Offering are estimated to be S$21,309,000 and are assumed
to be funded by proceeds raised from the Offering;
Borrowings of S$587,000,000 were drawn down by OUE H-REIT on 31 December 2012
and 31 March 2013 to partially fund the acquisition of the Initial Portfolio; and
The fair value of derivatives entered into by OUE H-REIT is assumed to be zero.
C-7
(C) Unaudited Pro Forma Financial Information
(1)
The Unaudited Pro Forma Statements of Total Return of OUE H-REIT for the years ended 31
December 2010, 2011 and 2012 (FY2010, FY2011 and FY2012) and the three months
ended 31 March 2012 and 2013 (1Q2012 and 1Q2013) have been prepared for inclusion
in this Prospectus and are presented below. Details of the pro forma adjustments and
assumptions made are set out in the Basis of Preparation of Pro Forma Financial Information
in Section B.
Note FY2010 FY2011 FY2012 1Q2012 1Q2013
S$000 S$000 S$000 S$000 S$000
Gross revenue 9 95,970 107,593 107,811 26,764 26,633
Property expenses 10 (15,118) (13,524) (12,886) (3,817) (3,022)
REIT Managers base
management fees (5,349) (5,358) (5,353) (1,339) (1,338)
REIT Managers
performance fees (3,234) (3,763) (3,797) (918) (944)
Finance income 11 44 53 49 13 12
Finance expense 11 (14,597) (14,597) (14,597) (3,649) (3,405)
Net income 55,288 67,905 68,729 16,430 17,312
year/period 103,348 67,905 68,729 16,430 17,312
(Less)/Add: Net tax
adjustments
(2)
(40,619) 12,895 13,010 3,234 2,553
Income available for
distribution 62,729 80,800 81,739 19,664 19,865
Notes:
(1) Based on the Offering Price of S$0.88 per Stapled Security and an acquisition consideration of S$1,705
million for the Initial Portfolio.
(2) Net tax adjustments comprise non-tax (chargeable)/deductible items including the REIT Managers
management fees payable in Stapled Securities, the REIT Trustees fee, gain on revaluation of investment
properties, amortisation of debt-related transaction costs and straight-lining of rental income for all periods
presented.
C-8
(1)
The Unaudited Pro Forma Statements of Cash Flows for the year ended 31 December 2012
(FY2012) and the three months ended 31 March 2013 (1Q2013) have been prepared for
inclusion in this Prospectus and are presented below. Details of the pro forma assumptions made
are set out in the Basis of Preparation of Pro Forma Financial Information in Section B.
FY2012
S$000
1Q2013
S$000
Adjustments for:
Finance expense
(2)
14,597 3,649
REIT Managers base management fees
paid/payable in Stapled Securities 5,291 1,322
Acquisition of properties and related assets and
liabilities, including acquisition costs (1,148,049)
Payment of transaction costs relating to issuance of
units (21,309)
Net increase/(decrease) in cash and cash
equivalents 33,411 (785)
year/period 33,411
Cash and cash equivalents at end of the
year/period 33,411 32,626
Notes:
C-9
Notes to the Unaudited Pro Forma Statements of Cash Flows
The effect of acquisition of the Properties and related assets and liabilities on OUE H-REITs
pro forma cash flows for the year ended 31 December 2012 are set out below:
FY2012
S$000
Investment properties (including acquisition costs) 1,705,075
Cash 5,458
Rental deposits (5,458)
Net assets acquired 1,705,075
Purchase consideration (1,705,000)
Acquisition costs (75)
(1,705,075)
Less:
Cash acquired 5,458
Consideration satisfied in the form of Stapled Securities 551,568
Net cash outflow (1,148,049)
Significant Non-Cash Transaction
During the year ended 31 December 2012, 626,781,999 Stapled Securities, amounting to
S$551,568,000 were issued as partial satisfaction of the purchase consideration on the
Properties.
During the year ended 31 December 2012 and the three months ended 31 March 2013,
approximately 10,327,000 and 2,576,000 Stapled Securities were or would be issued at the
Offering Price, amounting to S$9,008,000 and S$2,267,000 respectively, as payment for the
REIT Managers management fees which is payable in the form of Stapled Securities (see
Section E note (a)).
C-10
(1)
The Unaudited Pro Forma Statements of Financial Position as at 31 December 2012 and 31
March 2013 have been prepared for inclusion in the Prospectus and is presented below.
Details of the pro forma assumptions made are set out in the Basis of Preparation of Pro
Forma Financial Information in Section B of the Prospectus.
Note
As at
31 December
2012
As at
31 March
2013
S$000 S$000
Non-current assets
Investment properties 3 1,756,000 1,756,000
Current assets
Trade and other receivables 4 1,902 1,902
12,258 12,155
Total assets 1,768,258 1,768,155
Current liabilities
Rental deposits 5 1,462 1,359
Borrowings (secured) 6 581,130 581,130
Rental deposits 5 4,502 4,502
585,632 585,632
Net assets 1,181,164 1,181,164
Represented by:
Unitholders funds 7 1,181,164 1,181,164
Number of OUE H-REIT Units in
issue (000) 8 1,308,600 1,308,600
Net asset value per OUE H-REIT
Unit (S$) 0.903 0.903
Note:
C-11
(D) Notes to the Unaudited Pro Forma Financial Information
1. Basis of preparation
(a) Statement of compliance
The Unaudited Pro Forma Financial Information is prepared in accordance with the
basis set out in Section B and presented in accordance with Statement of
Recommended Accounting Practice (RAP) 7 Reporting Framework for Unit Trusts
issued by the Institute of Singapore Chartered Accountants and the applicable
requirements of the Code on Collective Investment Schemes (CIS Code) issued by
the Monetary Authority of Singapore (MAS) and the provisions of the OUE H-REIT
Trust Deed.
(b) Basis of measurement
The financial information on the Pro Forma Financial Information is prepared on the
historical cost basis except as disclosed in the accounting policies below.
(c) Functional and presentation currency
The financial information is presented in Singapore Dollars (S$) which is OUE
H-REITs functional currency. All Unaudited Pro Forma Financial Information presented
in S$ has been rounded to the nearest thousand, unless otherwise stated.
(d) Use of estimates and judgments
The preparation of the financial information requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and
reported amounts of assets, liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimates are revised
and any future periods affected.
Information about critical judgments in applying accounting policies that have the most
significant effect on the amounts recognised in the financial information is included in
Note 3 Valuation of investment properties.
2. Significant accounting policies of OUE H-REIT
The accounting policies set out below have been applied consistently throughout the periods
presented in this financial information, and have been applied consistently by OUE H-REIT.
(a) Investment properties
Investment properties are properties held either to earn rental income or for capital
appreciation or both. They are not for sale in the ordinary course of business, used in
the production or supply of goods or services, or for administrative purposes.
Investment properties are initially recognised at cost, including transaction costs, and
subsequently at fair value with any change therein recognised in the statement of total
return. Cost includes expenditure that is directly attributable to the acquisition of the
investment properties.
C-12
Rental income from investment properties is accounted for in the manner described in
Note 2(g). When an investment property is disposed of, the resulting gain or loss
recognised in the statement of total return is the difference between net disposal
proceeds and the carrying amount of the property.
(b) Financial instruments
Non-derivative financial assets
OUE H-REIT initially recognises loans and receivables and deposits on the date that
they are originated. All other financial assets (including assets designated at fair value
through the statement of total return) are recognised initially on the trade date at which
OUE H-REIT becomes a party to the contractual provisions of the instrument.
OUE H-REIT derecognises a financial asset when the contractual rights to the cash
flows from the asset expire, or it transfers the rights to receive the contractual cash
flows on the financial asset in a transaction in which substantially all the risks and
rewards of ownership of the financial asset are transferred. Any interest in transferred
financial assets that is created or retained by OUE H-REIT is recognised as a separate
asset or liability.
Financial assets and liabilities are offset and the net amount presented in the balance
sheet when, and only when, OUE H-REIT has a legal right to offset the amounts and
intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
OUE H-REIT classifies non-derivative financial assets into the loans and receivables.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are
not quoted in an active market. Such assets are recognised initially at fair value plus
any directly attributable transaction costs. Subsequent to initial recognition, loans and
receivables are measured at amortised cost using the effective interest method, less
any impairment losses.
Loans and receivables comprise trade and other receivables and cash and cash
equivalents.
Cash and cash equivalents comprise cash balances.
Non-derivative financial liabilities
OUE H-REIT initially recognises debt securities issued and subordinated liabilities on
the date that they are originated. All other financial liabilities are recognised initially on
the trade date at which OUE H-REIT becomes a party to the contractual provisions of
the instrument.
OUE H-REIT derecognises a financial liability when its contractual obligations are
discharged, cancelled or expired.
Financial assets and liabilities are offset and the net amount presented in the statement
of financial position when, and only when, OUE H-REIT has a legal right to offset the
amounts and intends either to settle on a net basis or to realise the asset and settle the
liability simultaneously.
C-13
OUE H-REIT classifies non-derivative financial liabilities into the other financial liability.
Such financial liabilities are recognised initially at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition, these financial liabilities are
measured at amortised cost using the effective interest method.
Other financial liabilities comprise loans and borrowings and rental deposits.
(c) Impairment
Financial assets
A financial asset is assessed at each reporting date to determine whether there is any
objective evidence that it is impaired. A financial asset is considered to be impaired if
objective evidence indicates that one or more events have had a negative effect on the
estimated future cash flows of that asset.
Individually significant financial assets are tested for impairment on an individual basis.
The remaining financial assets are assessed collectively in groups that share similar
credit risk characteristics.
An impairment loss in respect of a financial asset measured at amortised cost is
calculated as the difference between its carrying amount, and the present value of the
estimated future cash flows discounted at the original effective interest rate.
All impairment losses are recognised in the statement of total return.
An impairment loss is reversed if the reversal can be related objectively to an event
occurring after the impairment loss was recognised. For financial assets measured at
amortised cost, the reversal is recognised in the statement of total return.
Non-financial assets
The carrying amounts of the OUE H-REITs assets, other than investment properties,
are reviewed at each reporting date to determine whether there is any indication of
impairment. If any such indication exists, the assets recoverable amounts are
estimated.
The recoverable amount of an asset or cash-generating unit is the greater of its value
in use and its fair value less costs to sell. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific
to the asset. For the purpose of impairment testing, assets that cannot be tested
individually are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other
assets or groups of assets (the cash-generating unit).
An impairment loss is recognised if the carrying amount of an asset or its cash-
generating unit exceeds its recoverable amount. A cash-generating unit is the smallest
identifiable asset group that generates cash flows that largely are independent from
other assets and groups. Impairment losses are recognised in the statement of total
return.
C-14
Impairment losses recognised in prior periods are assessed at each reporting date for
any indications that the loss has decreased or no longer exists. An impairment loss is
reversed if there has been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the assets carrying
amount does not exceed the carrying amount that would have been determined if no
impairment loss had been recognised.
(d) Issue costs
Issue costs relate to expenses incurred in connection with the issue of OUE H-REIT
units and are deducted directly against the unitholders funds.
(e) Provision
A provision is recognised if, as a result of a past event, OUE H-REIT has a present legal
or constructive obligation that can be estimated reliably, and it is probable that an
outflow of economic benefits will be required to settle the obligation.
A provision for onerous contract is recognised when the expected benefits to be derived
by OUE H-REIT from a contract are lower than the unavoidable cost of meeting its
obligations under the contract. The provision is measured at the present value of the
lower of the expected cost of terminating the contract and the expected cost of
continuing with the contract.
(f) Leases
When OUE H-REIT is a lessee of an operating lease
Where OUE H-REIT has the use of assets under operating leases, payments made
under the leases are recognised in the statement of total return on a straight-line basis
over the term of the lease. Lease incentives received are recognised in the statement
of total return as an integral part of the total lease payments made. Contingent rentals
are charged to the statement of total return in the accounting period in which they are
incurred.
When OUE H-REIT is a lessor of an operating lease
Assets subject to operating leases are included in investment properties (see Note
2(a)).
(g) Revenue recognition
Rental income from operating leases
Rental income receivable under operating leases is recognised in the statement of total
return on a straight-line basis over the term of the lease. Lease incentives granted are
recognised as an integral part of the total rental income to be received. Variable rent is
recognised as income in the accounting period in which it is earned and the amount can
be measured reliably.
C-15
(h) Expenses
REIT Managers management fees, REIT Trustees fees and Property Managers
management fees
These fees are recognised on an accrual basis using the applicable formula stipulated
in Section E.
(i) Finance income and expense
Interest income is recognised as it accrues using the effective interest method.
Borrowing costs are recognised in the statement of total return using the effective
interest method in the period in which they are incurred, except to the extent that they
are capitalised as being directly attributable to the acquisition, construction or
production of an asset which necessarily takes a substantial period of time to be
prepared for its intended use or sale.
(j) Taxation
Income tax expense comprises current and deferred tax. Current tax and deferred tax
are recognised in the statement of total return except to the extent that it relates to items
directly related to unitholders funds, in which case it is recognised in unitholders funds.
Current tax is the expected tax payable on the taxable income for the year, using tax
rates enacted or substantively enacted at the reporting date, and any adjustment to tax
payable in respect of previous years.
Deferred tax is recognised using the statement of financial position method, providing
for temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax
is not recognised for the temporary differences arising from the initial recognition of
assets or liabilities in a transaction that is not a business combination and that affects
neither accounting nor taxable profit, and differences relating to investments in
subsidiaries to the extent that it is probable that they will not reverse in the foreseeable
future.
Deferred tax is measured at the tax rates that are expected to be applied to the
temporary differences when they reverse, based on the laws that have been enacted or
substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to
offset current tax liabilities and assets and they relate to income taxes levied by the
same tax authority on the same taxable entity.
A deferred tax asset is recognised only to the extent that it is probable that future
taxable profits will be available against which the unused tax losses and credits and
temporary differences can be utilised. Deferred tax assets are reduced to the extent that
it is no longer probable that the related tax benefit will be realised.
The Inland Revenue Authority of Singapore (IRAS) has issued a tax ruling on the
taxation of OUE H-REIT for income earned and expenditure incurred after its listing on
SGX-ST. Subject to meeting the terms and conditions of the tax ruling which includes
a distribution of at least 90% of the taxable income of OUE H-REIT, OUE H-REIT will
not be taxed on the portion of taxable income of OUE H-REIT that is distributed to
holders of OUE H-REIT units (Unitholders). Any portion of the taxable income that is
C-16
not distributed to Unitholders will be taxed at OUE H-REITs level. In the event that
there are subsequent adjustments to the taxable income when the actual taxable
income of OUE H-REIT is finally agreed with the IRAS, such adjustments are taken up
as an adjustment to the taxable income for the next distribution following the agreement
with the IRAS.
Although OUE H-REIT is not taxed on its taxable income distributed, the REIT Trustee
and the REIT Manager are required to deduct income tax at the applicable corporate tax
rate from distributions of such taxable income of OUE H-REIT (i.e. which has not been
taxed in the hands of the REIT Trustee) to certain Unitholders.
Qualifying Unitholders are entitled to gross distributions from OUE H-REIT. For
distributions made to foreign non-individual Unitholders during the period from 18
February 2010 to 31 March 2015, REIT Trustee is required to withhold tax at the
reduced rate of 10% on distributions made. For other types of Unitholders, REIT Trustee
is required to withhold tax at the prevailing corporate tax rate on the distributions made
by OUE H-REIT. Such other types of Unitholders are subject to tax on the regrossed
amounts of the distributions received but may claim a credit for the tax deducted at
source at the prevailing corporate tax rate by REIT Trustee.
A Qualifying Unitholder refers to a unit holder who is:
An individual;
A company incorporated and tax resident in Singapore;
A Singapore branch of a company incorporated outside Singapore that has
obtained the IRAS approval for distributions to be made to it by OUE H-REIT
without deduction of tax;
A body of persons incorporated or registered in Singapore, including a charity
registered under the Charities Act (Cap. 37) or established by any written law, a
town council, a statutory board, a co-operative society registered under the
Co-operative Societies Act (Cap. 62) or a trade union registered under the Trade
Unions Act (Cap. 333).
A foreign non-individual Unitholder refers to a unit holder who is not a resident of
Singapore for income tax purpose and who:
does not have any permanent establishment in Singapore; or
carries on any operation through a permanent establishment in Singapore, where
the funds used by that person to acquire the units in OUE H-REIT are not obtained
from that operation in Singapore.
The above tax transparency ruling does not apply to gains from the disposal of any
properties such as immovable properties, shares, etc that are determined by the IRAS
to be revenue gains chargeable to tax and income derived by OUE H-REIT but not
distributed to the unit holders in the same year in which the income is derived. Tax on
such gains or profits will be subject to tax in accordance to Section 10(1)(a) of the
Income Tax Act (Cap. 134) and collected from the REIT Trustee. Distribution made out
of the after-tax amount will not be subject to any further tax. Where the disposal gains
are regarded as capital in nature, they will not be subject to tax and the REIT Trustee
and the REIT Manager may distribute the capital gains without tax being deducted at
source.
C-17
(k) Segment information
An operating segment is a component of OUE H-REIT that engages in business
activities from which it may earn revenues and incur expenses, including revenues and
expenses that relate to transactions with any of OUE H-REITs other components. All
operating segments operating results are reviewed and used by the board of directors
of the REIT Manager (BOD) to make decisions about resources to be allocated to the
segment and assess its performance, and is a component for which discrete financial
information is available.
No geographical segment has been presented as all the properties are located in
Singapore.
3. Investment Properties
As at
31/12/2012
As at
31/3/2013
S$000 S$000
The investment properties are mortgaged for the credit facilities granted to OUE H-REIT
(Note 6).
Description of
Property Title
Term of
lease
(years) Location
Existing
Use
Valuation
S$000
Mandarin Orchard
Singapore
Leasehold 43 Orchard Road
Singapore
Hotel 1,220,000
Mandarin Gallery Leasehold 43 Orchard Road
Singapore
Retail 536,000
1,756,000
Investment properties are stated at fair value based on an independent valuation undertaken
by Cushman & Wakefield as of 31 March 2013. The fair values are based on open market
values, being the estimated amount for which a property could be exchanged on the date of
the valuation between a willing buyer and a willing seller in an arms length transaction
wherein the parties had each acted knowledgeably, prudently and without compulsion.
The valuers have considered the discounted cash flow method, capitalisation approach and
comparison method in arriving at the open market value as at the reporting date. The
valuation methods involve certain estimates. The key assumptions used to determine the fair
value of investment properties include projected rental rates, market-corroborated
capitalisation yield, terminal yield and discount rate. In relying on the valuation reports, the
REIT Manager has exercised its judgment and is satisfied that the valuation methods and
estimates are reflective of current market conditions and that the valuation reports are
prepared in accordance with recognised appraisal and valuation standards.
Mandarin Orchard Singapore is leased to the Master Lessee for an initial term of 15 years.
The Master Lease Agreement provides the Master Lessee with option to renew the lease for
a further term of 15 years.
C-18
4. Trade and other receivables
Trade and other receivables relate to input goods and service tax to be claimed from the tax
authorities.
5. Rental deposits
Rental deposits relate to rental deposits of Mandarin Gallery.
6. Borrowings
This note provides information about the contractual terms of OUE H-REITs interest-bearing
borrowings.
As at
31/12/2012
As at
31/3/2013
S$000 S$000
Bank loans 587,000 587,000
Less: Transaction costs capitalised (5,870) (5,870)
581,130 581,130
OUE H-REIT has in place S$630 million bank facilities comprising a revolving credit facility
and term loan facilities (the OUE H-REIT Debt Facilities).
OUE H-REIT has fixed the interest rates for a S$587.0 million loan at an average rate of
approximately 2.2% per annum at the Listing Date via interest rate swaps. The interest rate
swaps have a weighted average tenure of three years.
The effective interest rate of the loans as at the reporting date is assumed to be 2.5%,
inclusive of all margins and amortisation of debt-related transaction costs.
The OUE H-REIT Debt Facilities are secured by:
A registered first legal mortgage over the Properties;
A legal assignment of all insurance taken in respect of the Properties except public
liability insurance;
An assignment of all rights, titles, benefits and interests in connection with any lease,
tenancy or property management agreements and lease or tenancy deposits/proceeds
in respect of Mandarin Gallery;
An assignment of all rights, titles, benefits and interests in connection with any master
lease, entered into by OUE H-REIT and lease or tenancy deposits/proceeds in
connection with such master lease in respect of Mandarin Orchard Singapore; and
A debenture incorporating a fixed and floating charge over generally all its present and
future assets in connection with the Properties.
C-19
7. Unitholders funds
As at
31/12/2012
As at
31/3/2013
S$000 S$000
OUE H-REIT Units in issue 1,151,548 1,151,548
Issue costs (21,309) (21,309)
Gain on revaluation of investment properties 50,925 50,925
1,181,164 1,181,164
8. Units in issue
The following represents the units in issue as at 31 December 2012 and 31 March 2013.
No. of units
000 S$000
Creation of new OUE H-REIT Units arising
from:
Establishment * **
partial satisfaction of purchase
consideration on the Properties 626,782 551,568
the Offering and Cornerstone Units 681,818 599,980
1,308,600 1,151,548
* less than 1,000 units
** less than S$1,000
Each OUE H-REIT Unit is stapled together with a unit in OUE H-BT under the terms of a
stapling deed dated 10 July 2013 entered into between the REIT Manager, the REIT Trustee
and the Trustee-Manager and cannot be traded separately.
Each Stapled Security represents an undivided interest in OUE H-REIT and OUE H-BT. A
holder of the Stapled Securities has no equitable or proprietary interest in the underlying
assets of OUE H-REIT and OUE H-BT and is not entitled to the transfer to it of any asset (or
any part thereof) or of any real estate, any interest in any asset and real estate-related assets
(or any part thereof) of OUE H-REIT and OUE H-BT.
The rights and interests of holders of the Stapled Securities include the rights to:
Receive income and other distributions attributable to the Stapled Securities held; and
Participate in the termination of OUE H-REIT or (as the case may be) OUE H-BT by
receiving a share of all net cash proceeds derived from the realisation of the assets of
OUE H-REIT or (as the case may be) OUE H-BT less any liabilities, in accordance with
their proportionate interests in OUE H-REIT or (as the case may be) OUE H-BT.
The restrictions of a holder of the Stapled Securities include the following:
No holder has the right to require that any asset of OUE H-REIT or (as the case may
be) OUE H-BT be transferred to him; and
C-20
A holder of the Stapled Securities cannot give any directions to the REIT Manager, the
REIT Trustee or the Trustee-Manager (whether at a meeting of holders of the Stapled
Securities or otherwise) if it would require the REIT Manager, the REIT Trustee or the
Trustee-Manager to do or omit from doing anything which may result in:
OUE H-REIT or OUE H-BT ceasing to comply with applicable laws or regulations;
or
The exercise of any discretion expressly conferred on the REIT Manager or the
REIT Trustee by the OUE H-REIT Trust Deed or the determination of any matter
which, under the OUE H-REIT Trust Deed, requires the agreement of either or both
of the REIT Manager or the REIT Trustee.
The liability of a holder of the Stapled Securities is limited to the amount paid or payable for
the Stapled Securities. The provisions of the OUE H-REIT Trust Deed provide that no holder
of the Stapled Securities will be personally liable to indemnify the REIT Trustee, the
Trustee-Manager or any creditor of OUE H-REIT in the event that liabilities of OUE H-REIT
or OUE H-BT exceed their respective assets.
Under the OUE H-REIT Trust Deed, every Stapled Security carries the same voting rights.
9. Gross revenue
FY2010 FY2011 FY2012 1Q2012 1Q2013
S$000 S$000 S$000 S$000 S$000
Rental income 94,728 105,650 106,413 26,392 26,248
Other income 1,242 1,943 1,398 372 385
95,970 107,593 107,811 26,764 26,633
Included in rental income is contingent rent of S$19,361,000, S$29,327,000, S$30,929,000,
S$7,440,000 and S$7,001,000 recognised in the Statement of Total Return for each of the
years ended 31 December 2010, 2011 and 2012 and for each of the three months ended 31
March 2012 and 2013 respectively.
10. Property expenses
FY2010 FY2011 FY2012 1Q2012 1Q2013
S$000 S$000 S$000 S$000 S$000
Property tax 5,162 6,026 6,579 1,645 1,646
Insurance expense 218 243 229 57 59
Property maintenance
expenses 1,015 1,140 1,216 362 284
Utilities expenses 1,724 1,827 1,858 525 368
Marketing expenses 5,755 2,736 1,619 911 303
Property Managers
management fees 1,144 1,293 1,273 310 342
Others 100 259 112 7 20
15,118 13,524 12,886 3,817 3,022
C-21
11. Finance income and expense
FY2010 FY2011 FY2012 1Q2012 1Q2013
S$000 S$000 S$000 S$000 S$000
Finance income
Interest income 44 53 49 13 12
Finance expense
Interest expense on
borrowings (13,031) (13,031) (13,031) (3,258) (3,258)
Amortisation of debt-
related transaction costs (1,566) (1,566) (1,566) (391) (147)
(14,597) (14,597) (14,597) (3,649) (3,405)
12. Financial risk management
Capital management
The REIT Managers objective when managing capital is to optimise OUE H-REITs capital
structure within the borrowing limits set out in the Code on Collective Investment Schemes
(CIS) by the Monetary Authority of Singapore to fund future acquisitions and asset
enhancement works at OUE H-REITs properties. To maintain or achieve an optimal capital
structure, the REIT Manager may issue new units or source additional borrowing from both
financial institutions and capital markets.
OUE H-REIT has a policy to maintain a strong capital base so as to maintain investor,
creditor and market confidence and to sustain future development of the business. The REIT
Manager monitors the yield, which is defined as net property income from the property
divided by the latest valuation for the property, on the properties acquired. The REIT
Manager also monitors the level of distributions made to holders of Stapled Securities.
OUE H-REIT seeks to maintain a balance between the higher returns that might be possible
with higher levels of borrowings and the advantages and security afforded by a sound capital
position.
Financial risk management objectives and policies
Exposure to credit, interest rate and liquidity risks arises in the normal course of OUE
H-REITs business. OUE H-REIT has written policies and guidelines, which set out its overall
business strategies and its general risk management philosophy.
Credit risk
Credit risk is the potential financial loss resulting from the failure of a customer to settle its
financial and contractual obligations to OUE H-REIT, as and when they fall due.
The REIT Manager has established credit limits for customers and monitored their balances
on an ongoing basis. Credit evaluations are performed by the REIT Manager and the
Property Manager before lease agreements are entered into with customers. Cash are
placed with financial institutions which are regulated.
C-22
At the reporting date, the Hotel is leased to a single Master Lessee. The maximum exposure
to credit risk is represented by the carrying value of each financial asset on the statement of
financial position.
Interest rate risk
OUE H-REITs exposure to changes in interest rates relate primarily to interest-earning
financial assets and interest-bearing financial liabilities. The REIT Managers strategy to
actively manage the risk of potential interest rate volatility may be through the use of interest
rate swap contracts and/or fixed rate borrowings. The REIT Manager will regularly evaluate
the feasibility of putting in place an appropriate level of interest rate hedges, after taking into
account the prevailing market conditions.
The OUE H-REITs interest rate risk arises primarily from its interest-bearing loans and
borrowings which are variable rate instruments. A change of 10 basis points in interest rates
at the reporting date would have increased/(decreased) total return before tax by the
amounts shown below.
10 bp
increase
10 bp
decrease
S$000 S$000
31 December 2012
Variable rate bank loans (587) 587
Interest rate swaps 587 (587)
Cash flow sensitivity (net)
31 March 2013
Variable rate bank loans (147) 147
Interest rate swaps 147 (147)
Cash flow sensitivity (net)
Liquidity risk
Liquidity risk is the risk that OUE H-REIT will encounter difficulty in meeting the obligations
associated with its financial liabilities that are settled by delivering cash or another financial
asset. The REIT Managers approach to managing liquidity is to ensure, as far as possible,
that it will always have sufficient liquidity to meet its liabilities when due, under both normal
and stressed conditions, without incurring unacceptable losses or risking damage to OUE
H-REITs reputation.
The REIT Manager monitors and maintains a level of cash and cash equivalents deemed
adequate by management to finance OUE H-REITs operations. In addition, the REIT
Manager also monitors and observes the Code on Collective Investment Schemes issued by
the MAS concerning limits on total borrowings.
The following are the contractual maturities of financial liabilities including interest payments
and excluding the impact of netting agreements:
C-23
Contractual cash flows
Carrying
amount Total
Within 1
year
Within 2
to 5 years
S$000 S$000 S$000 S$000
31 December 2012
Borrowings 581,130 652,157 13,031 639,126
Rental deposits 5,964 5,964 1,462 4,502
587,094 658,121 14,493 643,628
31 March 2013
Borrowings 581,130 652,157 13,031 639,126
Rental deposits 5,861 5,861 1,359 4,502
586,991 658,018 14,390 643,628
Accounting classifications and fair values
The fair values of financial assets and liabilities, together with the carrying amounts shown
in the Unaudited Pro Forma Statements of Financial Position are as follows:
Loans and
receivables
Other
financial
liabilities Fair value
S$000 S$000 S$000
31 December 2012
12,258 12,258
Borrowings (581,130) (581,130)
Rental deposits (5,964) (5,770)
(587,094) (586,900)
31 March 2013
12,155 12,155
Borrowings (581,130) (581,130)
Rental deposits (5,861) (5,668)
(586,991) (586,798)
C-24
Estimating fair values
Financial assets and liabilities
The carrying amounts of financial assets and liabilities with a maturity of less than one year
(including trade and other receivables and cash and cash equivalents) and variable rate bank
loans are assumed to approximate their fair values because of the short period to maturity
or repricing. All other financial assets and liabilities are discounted to determine their fair
values.
The interest rate used to discount the security deposits as at 31 December 2012 and 31
March 2013 was 2.2%.
13. Segment reporting
Hospitality Retail Total
S$000 S$000 S$000
FY2010
Gross revenue 63,988 31,982 95,970
Property operating expenses (2,152) (12,966) (15,118)
Reportable segment net property income 61,836 19,016 80,852
Unallocated items:
REIT Managers base management fees (5,349)
REIT Managers performance fees (3,234)
REIT Trustees fee (267)
Other trust expenses (2,161)
Finance income 44
Finance expense (14,597)
Net income 55,288
Gain on revaluation of investment properties 48,060
Total return for the year 103,348
FY2011
Gross revenue 73,762 33,831 107,593
Unallocated items:
Finance income 53
C-25
Hospitality Retail Total
S$000 S$000 S$000
FY2012
Gross revenue 75,060 32,751 107,811
Unallocated items:
Finance income 49
1Q2012
Gross revenue 18,424 8,340 26,764
Property operating expenses (893) (2,924) (3,817)
Unallocated items:
REIT Managers performance fees (918)
Other trust expenses (540)
Finance income 13
Total return for the period 16,430
1Q2013
Gross revenue 18,036 8,597 26,633
Property operating expenses (895) (2,127) (3,022)
Unallocated items:
REIT Managers performance fees (944)
Other trust expenses (540)
Finance income 12
Total return for the period 17,312
Segment information by geographical area is not presented as all of OUE H-REITs assets
are located in Singapore.
C-26
14. Commitments
OUE H-REIT leases out its investment properties. Non-cancellable operating lease rentals
are receivable as follows:
As at
31/12/2012
As at
31/3/2013
S$000 S$000
Receivable
Within 1 year 78,789 79,265
After 1 year but within 5 years 240,686 233,160
After 5 years 450,000 450,000
769,475 762,425
The above operating lease rental receivables comprise amounts receivable under the Master
Lease Agreement and the leases relating to Mandarin Gallery.
Rental receivable under the Master Lease is based on the terms of the Master Lease
Agreement as set out in Section E note (d). The amounts receivable computed above for the
lease are based on the fixed rent as set out in the Master Lease Agreement.
(E) REIT Managers management fees, Property Managers management fees, REIT
Trustees fee and lease payments under Master Lease Agreement
(a) REIT Managers management fees
The REIT Manager is entitled under the OUE H-REIT Trust Deed to the following
management fees:
a base fee of 0.3% per annum of the value of OUE H-REIT Deposited Property
(being the gross assets of OUE H-REIT, as stipulated in the OUE H-REIT Trust
Deed); and
a performance fee of 4.0% per annum of the Net Property Income (as defined in
the OUE H-REIT Trust Deed) of OUE H-REIT in the relevant financial year
(calculated before accounting for this additional fee in that financial year).
100.0% of the Base Fee and Performance Fee will be paid in the form of Stapled
Securities at the market price (as defined in the OUE H-REIT Trust Deed) prevailing at
the date of issue for the period from the Listing Date to the end of Projection Year 2014,
and thereafter at the discretion of the REIT Manager.
Any increase in the rate or any change in the structure of the REIT Managers
management fees must be approved by an Extraordinary Resolution at a meeting of
holders of the Stapled Securities duly convened and held in accordance with the
provisions of the OUE H-REIT Trust Deed.
The portion of the management fees payable in the form of Stapled Securities will be
made on a quarterly basis, in arrears. The portion of the management fees payable in
the form of cash will be made on a monthly basis, in arrears.
C-27
The aforementioned basis has been used to compute the REIT Managers management
fees for the purpose of the Unaudited Pro Forma Statements of Total Return.
(b) REIT Trustees fee
Pursuant to the OUE H-REIT Trust Deed, the REIT Trustees fees are charged at a flat
rate of 0.015% per annum of the value of the Deposited Property (as defined in the OUE
H-REIT Trust Deed) for the first 12 months (commencing from the date of inception of
OUE H-REIT). Thereafter, the REIT Trustees fees are charged on a scaled basis of up
to 0.02% per annum of the value of the Deposited Property (as defined in the OUE
H-REIT Trust Deed), subject to a minimum sum of $20,000 per month, excluding
out-of-pocket expenses and GST. In addition, OUE H-REIT will pay the REIT Trustee a
one-time inception fee of S$20,000. The REIT Trustees fee is payable out of the
Deposited Property of OUE H-REIT on a monthly basis, in arrears.
Any increase in the rate or any change in the structure of the REIT Trustees fees must
be approved by an Extraordinary Resolution at a meeting of holders of the Stapled
Securities duly convened and held in accordance with the provisions of the OUE
H-REIT Trust Deed.
The aforementioned basis has been used to compute the REIT Trustees fee for the
purpose of the unaudited pro forma financial information.
(c) Property Managers management fee
Under the property management agreement in respect of Mandarin Gallery and the
Excluded Commercial Premises, the property management fees are charged as follows:
(i) 2.0% per annum of the gross revenue of Mandarin Gallery and the Excluded
Commercial Premises;
(ii) 2.0% per annum of the net property income of Mandarin Gallery and the Excluded
Commercial Premises (calculated before accounting for the property management
fee in that financial period); and
(iii) 0.5% per annum of the net property income of Mandarin Gallery (calculated before
accounting for the property management fee in that financial period), in lieu of
leasing commissions otherwise payable to the Property Manager and/or third party
agents.
The property management fees are payable monthly in arrears.
(d) Lease payments under the Master Lease Agreement
Under the terms of the Master Lease Agreement, OUE H-REIT will be entitled to an
annual rental payment for the duration of the term of the Master Lease Agreement
comprising the following:
A fixed rent of S$45.0 million; and
A variable rent computed based on the sum of 33.0% of the Hotels Gross
Operating Revenue and 27.5% of the Hotels Gross Operating Profit for the
prevailing financial year, less the fixed rent.
Should the calculation of the variable rent yield a negative figure, the variable rent will
be deemed to be zero.
C-28
D-1
APPENDIX D
INDEPENDENT PROPERTY VALUATION SUMMARY REPORTS
Cushnan & WakefieId VH5 Pte. Ltd.
Company Reglstratlon No. 200709839D

3 Cburcb Street
#09-03 Samsung Hub
Slngapore 049483
Tel: (65) 6535 3232
Fa: (65) 6535 1028

www.cusbmanwaketlelo.com

31 May 2013

(the "REIT Manager")
333 Orchard Road #33-00
Singapore 238867

OUE Hospitality Trust Management Pte. Ltd.
(the "Trustee-Manager")
Singapore 238867

(in its capacity as trustee of OUE Hospitality Real Estate Investment Trust)
(the "REIT Trustee")
20 Cecil Street #28-01
Equity Plaza
Singapore 049705

Dear Sirs

VALUATION OF THE FOLLOWING PROPERTIES:

1. MANDARIN ORCHARD SINGAPORE AT 333 ORCHARD ROAD, SINGAPORE 238867 (THE HOTEL)
2. MANDARIN GALLERY AT 333A ORCHARD ROAD, SINGAPORE 238897 (THE RETAIL PROPERTY)

Cushman & Wakefield VHS Pte Ltd (C&W) have been instructed by OUE Hospitality REIT Management Pte.
Ltd. (the "REIT Manager"), to provide the market values as at 31 March 2013 and formal valuation reports in
respect of the above mentioned properties (the Properties), subject to the proposed master lease on the hotel
and existing tenancies and occupancy arrangements of the retail property, as disclosed.

C&W have prepared the formal valuation reports (the Reports) in accordance with the requirements of the
instructions and the following international definition of Market Value:

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

The valuations have been made on the assumption that the owner sells the properties on the open market in their
existing state taking into account the terms of the proposed master lease for the hotel and hotel management
agreement, where appropriate, but without the benefit of a deferred term contract, joint venture or any similar
arrangement which would affect the values of the Properties.

For the specific purposes of this prospectus, we provide a valuation summary of the Reports with a brief
description of the Properties together with the key factors that have been considered in determining the market
values of the Properties. The value conclusions reflect all information known by the valuers of C&W who worked
on the valuations in respect to the Properties, market conditions and available data.

D-2

Page 2
VALUATION OF PORTFOLIO OF MANDARIN ORCHARD SINGAPORE AND MANDARIN GALLERY
_________________________________________________________________________________

Reliance on This Letter

This letter together with its attachments is a summary of the full Reports that C&W have carried out and it does
not contain all the necessary information and assumptions that are included in the Reports. Further reference may
be made to these Reports, copies of which are held by the REIT Manager.

The valuation contained in the Reports are not guarantees or predictions but are based on the information
obtained from reliable and reputable agencies and sources, the Owner and other related parties. Whilst C&W
have endeavoured to obtain accurate information, it has not independently verified all the information provided by
the REIT Manager or other reliable and reputable agencies.

Where applicable, information as to ownership, site area and zoning has been obtained from our searches at the
local authorities. C&W have also relied to a considerable extent the property data provided by the REIT Manager
on matters such as floor areas, proposed master lease terms, tenancy details, income and expenses information,
hotel management agreement, hotel operational details, site and building plans, dates of completion and all other
relevant matters.

Also, in the course of the valuation, we have assumed that all the leases are legally valid and enforceable and the
Properties have proper legal titles that can be freely transferred (subject to the existing hotel management
agreements in place), leased and sub-leased in the market without being subject to any land premium or any
extra charges, C&W have no reason to doubt the truth and accuracy of the information provided to us by the REIT
Manager which is material to the valuation.

No allowance has been made in the valuation for any charges, mortgages or amounts owing on the Properties.
C&W have assumed that the Properties are free from encumbrances, restrictions or other outgoings of an
onerous nature which would affect their market value, other than those which have been made known to C&W.

The methodologies used in valuing the Properties, namely, the Discounted Cash Flow Analysis, Capitalization
Approach and Comparison Method, are based on our professional opinion and estimates of the future results and
are not guarantees or predictions. These valuation methodologies are summarized in this letter. Each
methodology is based on a set of assumptions as to the income and expenses taking into considerations the
changes in economic conditions and other relevant factors affecting the Properties. The resultant value is, in our
opinion, the best estimate but it is not to be construed as a guarantee or prediction and it is fully dependent upon
the accuracy of the assumptions made. This summary does not contain all the necessary support data and details
included in our Reports. For further information on that, reference should be made to the Reports to understand
the complexity of the methodologies and the variables involved in order to appreciate the context in which the
values are arrived at.

We have inspected the exterior and, where possible, the interior of the Properties. No structural surveys have
been made, but in the course of our inspection, we did not note any serious defect to the completed buildings. We
are not, however, able to report that the Properties are free from rot, infestation or any structural defect. No tests
were carried out to any of the services.

We have also not carried out investigations on site in order to determine the suitability of ground conditions, nor
have we undertaken archaeological, ecological or environmental surveys. Our valuation is on the basis that these
aspects are satisfactory.

D-3

Page 3
_________________________________________________________________________________

Valuation Rationale

In arriving at our valuation, we have considered relevant general and economic factors and in particular have
investigated recent sales transactions of comparable properties that have occurred in the vicinity or in similar
standard localities. We have utilized the Discounted Cash Flow Analysis, Capitalization Approach and/ or
Comparison Method, where appropriate, in undertaking our assessment for the Properties.

Discounted Cash Flow Analysis

We have carried out a discounted cash flow analysis over a 10-year investment horizon in which we have
assumed that the property is sold at the commencement of the eleventh year of the cash flow. This form of
analysis allows an investor to make an assessment of the long term return that is likely to be derived from a
property with a combination of both net income/rental and capital growth over an assumed investment horizon in
undertaking this analysis, a wide range of assumptions are made including a target or pre-selected discounted
rate, rental growth, sale price of the property at the end of the investment horizon as well as costs associated with
its disposal at the end of the investment period.

We have investigated the current market requirements for an investment return over a 10-year period from the
relevant market sector in order to determine the appropriate discount rates for each property.

Our selected terminal capitalization rates, used to estimate the terminal sale price, takes into consideration
perceived market conditions in the future, estimated tenancy and cash flow profile and the overall physical
condition of the building in 10 years time. The adopted terminal yield rate, additionally, has regard to the duration
of the remaining tenure of properties at the end of the cash flow period.

Capitalization Approach

Where appropriate, we have cross-checked the property interests using the Capitalization Approach by taking into
account estimated sustainable revenues of the property, adjusting to reflect anticipated operating expenses or
outgoings, deriving a net income which is then capitalized at appropriate capitalization rate over the remaining
lease term or tenure. Capitalization rate was obtained by comparing capitalization rates of similar properties in
market transactions, where available.

Comparison Method

Where appropriate, we have cross-checked the property interests by the Comparison Method by making
reference to comparable sale transactions as available in the relevant market. Appropriate adjustments are made
for any differences between the property and the comparable.

Our valuations have been undertaken on a Goods and Services Tax or Consumption Tax exclusive basis.

Summary of Valuation

Our opinion of the market value of each of the Properties is stated in the tables below, subject to proposed master
lease for the hotel and existing tenancies and occupancy arrangements for the retail property, as disclosed. The
following summarizes the market value for each property: -

D-4
Page4
Predominant Market Value as at Value Per Room/
Property Address Use 31 March 2013 Value per sq ft
1. Mandarin Orchard Singapore Hotel S$1 ,220,000,000 S$1, 160,799 per room
2. Mandarin Gallery Retail S$536, 000,000 S$4,278 per sq ft
Total S$1 '756,000,000
More property details and the key valuation assumptions for each of the Properties are found in the Valuation
Certificates attached to this letter.
Disclaimer
We have prepared this valuation summary that appears in the Prospectus and specifically disclaim liability to any
person in the event of any omission from or false or misleading statement included in the Prospectus, other than
in respect of the information provided within the valuation reports and summary. We do not make any warranty or
representation as to the accuracy of the information in any part of the Prospectus other than as expressly made or
given in this valuation summary.
All information provided to us by the REIT Manager is treated as correct and true and we accept no responsibility
for subsequent changes in information and reserve the right to change our valuation if any information provided
were to materially change.
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.
We have no present or prospective interest in the Properties and are not a related corporation of nor do we have
a relationship with the property owner(s) or other party/parties whom the REIT Manager is contracting with.
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.
We hereby certify that the Valuers undertaking the valuation are authorized to practice as valuers and have the
necessary experience in valuing similar types of properties.
Yours faithfully
For and on behalf of
CUSHMAN & WAKEFIELD VHS PTE. L TO.
Managi ng Director, Singapore
MRICS
Encl
Chew May Yenk
Executive Director, Valuation & Advisory
MSISV, Licensed Appraiser No. AD041-2004419H
D-5

Page 5
_________________________________________________________________________________

VALUATION CERTIFICATE
Date of Valuation: 31 March 2013
Property: Mandarin Orchard Singapore at 333 Orchard Road, Singapore 238867 (the hotel)
Legal Description: Lot 1546N of Town Subdivision 21
Registered Owner: Overseas Union Enterprise Limited
Tenure/ Interest Valued: Leasehold for a term of 99 years from 1 July 1957
Brief Description of
Property:
Mandarin Orchard Singapore is strategically located along Orchard Road, the premier hotel/
shopping belt and tourist precinct of Singapore. It is situated within an integrated development
comprising the subject hotel and Mandarin Gallery, an upmarket retail mall.
The hotel is situated within walking distances to the Orchard and Somerset MRT Stations and
is some 20 km from the Changi Airport. Surrounding developments comprise mainly prime
retail malls as well as international class hotels and high-end residential developments.
Mandarin Orchard Singapore is a full-serviced five-star hotel, presently with a total of 1,051
guest rooms housed within a hotel building comprising the 39-storey Orchard Wing and the
37-storey Main Tower and standing atop a 5-storey podium which also houses the Mandarin
Gallery. An additional 14 guest rooms will be added to the hotel room inventory in August
2013 and followed by 11 guest rooms in January 2014, arising from conversion of the Main
Tower 34th/ 36th storey existing GMs apartment and business lounge and the Meritus Club
Lounge within the hotel. Presently, the hotel facilities include an outdoor swimming pool, a
fitness centre, tennis court, business centre, five food & beverage (F&B) outlets comprising
restaurants and bar, three ballrooms, meeting/function rooms, five retail units and the Meritus
Club Lounge. There are also 441 car park lots at the basement levels and upper floors from
the 2nd to 5th storey. The Orchard Wing was opened in 1973 while the Main Tower was
opened in 1980. Progressive renovation/ reconfiguration works of hotel F&B facilities and soft
refurbishment works to guest rooms have been carried out in stages since then.
Master Plan 2008: Zoned Hotel use with a gross plot ratio of 4.9+
Site Area: 10,305.3 square metres/ 110,925 square feet
Gross Floor Area (GFA): Approximately 91,999.8 square metres/ 990,277 square feet
No. of Hotel Rooms: There are 1,051 guest rooms in seven room/ suite categories with room sizes ranging
between 28.4 square metres and 153.7 square metres. According to information provided, an
additional 14 guest rooms will be opened in August 2013 and followed by 11 guest rooms in
January 2014.
Hotel Management: The hotel is presently managed by Singapore Mandarin International Hotels Pte. Ltd. (the
Operator), for an operating term of 10 years commencing from 1 January 2004 and ending
31 December 2013. The operating term is subject to extension of two further periods of 5
years each on the same terms and condition and at the Owners option.

D-6

Page 6
_________________________________________________________________________________

Historical Performance: According to information supplied, the historical performance of the hotel is as follows:-

Cccupancy: 84.6 83.8 86.3
Average8oom8aLe
1
(S$): 234 277 281
8evA8(S$): 213 238 243
1oLal8evenue(S$'000) 133,130 131,096 134,410
CrossCperaLlngroflL(S$'000) 72,929 86,912 87,632
Master Lease:
According to information provided, the hotel will be leased to Overseas Union Enterprise
Limited (the Master Lessee) under a Master Lease Agreement (MLA) with RBC Investor
Services Trust Singapore Limited (in its capacity as trustee of OUE Hospitality Real Estate
Investment Trust) as the Master Lessor, upon the sale of the property. The lease shall be for a
term of 15 years commencing from the Listing Date (the Term), with an option to renew for a
renewal term of 15 years commencing immediately after the date of expiry of the Term.
The Master Lessee shall pay to the Master Lessor a gross rent comprising two components,
namely an annual Fixed Rent and a Variable Rent. Variable Rent is computed based on the
sum of a fixed portion of the hotels gross operating revenue (GOR) and a fixed portion of the
hotels gross operating profit (GOP)
2
for that fiscal year, less the fixed rent for the relevant
fiscal year. If the calculation of the Variable Rent yields a negative figure, the Variable Rent
shall be deemed to be zero. The annual Fixed Rent shall be S$45,000,000 and the Variable
Rent shall be computed based on 33.0% of GOR and 27.5% of GOP for each fiscal year.
The Master Lessor shall be responsible for certain insurance and property tax expenses as
well as capital expenditures involving major mechanical and equipment (M&E) and structural
in nature. The Master Lessee shall be responsible for the FF&E reserve, repair and
maintenance of the property, its infrastructure, plant and equipment which are not capital in
nature during the MLA term.
Methods of Valuation: Discounted Cash Flow Analysis and Comparison Method
Basis of Valuation: The property in its existing use and condition and subject to the proposed master lease
agreement.
Terminal Yield: 7.00%
Discount Rate: 8.50%
Market Value: S$1,220,000,000/-
Value per room: S$1,160,799/-
Remarks: This Valuation Certificate is a summary of the full report that Cushman & Wakefield have
carried out and it does not contain all the necessary information, assumptions and limiting
conditions that are included in the report. Further reference may be made to the report, copies
of which are held by the REIT Manager.

1
Excluding rooms service charge.
2
According to information provided, for the purpose of rent calculation in the Master Lease Agreement, GOR shall mean the total revenues,
receipts and income of any kind derived in connection with the hotel and the hotel business operations and GOP shall mean gross operating
profit before any management fee.
D-7

Page 7
_________________________________________________________________________________

VALUATION CERTIFICATE
Date of Valuation: 31 March 2013
Property: Mandarin Gallery at 333A Orchard Road, Singapore 238897
Legal Description: Lot 1546N of Town Subdivision 21
Tenure/ Interest Valued: Leasehold for a term of 99 years from 1 July 1957
Property:
The property is strategically located along Orchard Road, the premier hotel/ shopping belt and
tourist precinct of Singapore. It is situated within walking distance to the Orchard and
Somerset MRT Stations and is some 20 km from the Changi Airport. Mandarin Gallery is
situated within an integrated development comprising the subject property and Mandarin
Orchard Singapore Hotel, an international class hotel. Surrounding developments comprise
mainly prime retail malls as well as international class hotels and high-end residential
developments.
Mandarin Gallery is a high-end retail mall occupying the 1
st
to 4
th
storeys of the 5-storey (with
2 basement levels) Orchard Wing of Mandarin Orchard Singapore Hotel. It houses 86 high-
end fashion, lifestyle, services and food & beverage tenants. The retail mall has undergone
addition and alteration works that were completed in November 2009.
Car parking facilities are available in Basement 1 and 2 and on Levels 2 to 5 of Mandarin
Orchard Singapore Hotel.
Registered Owner: Overseas Union Enterprise Limited
Town Planning: Zoned Hotel use
Site Area: 10,305.3 square metres/ 110,925 sq ft
Gross Floor Area (GFA): Approximately 18,240.2 square metres/ 196,336 sq ft
Net Lettable Area (NLA): Approximately 11,640.1 square metres/ 125,293 sq ft
Tenancy:
According to the tenancy schedule provided to us as at 31 March 2013, the retail mall is fully
leased, taking into consideration the existing tenancies, pre-committed leases and renewals.
Major tenants within the property include Montblanc, Rimowa, Mulberry, Marc by Marc Jacobs
and Emporio Armani, and other mini-major tenants such as Bread & Butter, Boss, Vertu,
amongst others.
Methods of Valuation: Discounted Cash Flow Analysis, Capitalization Approach and Comparison Method
Capitalization Rate: 5.25%
Terminal Yield: 5.75%
Discount Rate: 7.50%
Market Value: S$536,000,000/-
Value psf of GFA: S$2,730/-
Value psf of NLA: S$4,278/-
Remarks: This Valuation Certificate is a summary of the full report that Cushman & Wakefield have
carried out and it does not contain all the necessary information, assumptions and limiting
conditions that are included in the report. Further reference may be made to the report, copies
of which are held by the REIT Manager.

D-8

Valuation Summary for Mandarin Orchard Singapore Page 1
Prepared for OUE Hospitality REIT Management Pte. Ltd., Valuation as at 31 March 2013
OUE Hospitality Trust Management Pte. Ltd. and
As Client:

OUE Hospitality REIT Management Pte. Ltd. (the "REIT Manager") and OUE Hospitality Trust
Management Pte. Ltd. (the "Trustee-Manager")
Singapore 238867

RBC Investor Services Trust Singapore Limited (in its capacity as trustee of OUE Hospitality Real
Estate Investment Trust) (the "REIT Trustee")
20 Cecil Street
#28-01 Equity Plaza
Singapore 049705

Copy to:

Standard Chartered Bank
Real Estate, Wholesale Bank
8 Marina Boulevard Level 25
Singapore 018981

27 June 2013

Dear Sirs,

VALUATION SUMMARY
MANDARIN ORCHARD SINGAPORE

We are pleased to submit to you our Valuation Summary in respect of the Mandarin Orchard Singapore (the
Hotel).

1. Client Brief and Purpose of Valuation

This summary report is prepared in accordance with our agreed instructions received from OUE
Hospitality REIT Management Pte. Ltd. (the "REIT Manager"), OUE Hospitality Trust Management Pte.
Ltd. (the "Trustee-Manager") and RBC Investor Services Trust Singapore Limited as trustee of OUE H-
REIT (the "REIT Trustee") (together, the Client) to undertake a valuation of the Mandarin Orchard
Singapore (the Hotel). Our instructions were confirmed by way of signed acceptance by the Client of
our proposal dated 11 April 2013, received on 11 April 2013.

We understand that the 99-year leasehold interest expiring in approximately 43.3 years on 30 June
2056 (the Head Lease) in the Property will be acquired by the REIT Trustee, who will in turn grant a
master lease (the Master Lease) to a related entity lessee, Overseas Union Enterprise Limited.

We have been instructed to provide the Client with our opinion of the Market Value of 99-year leasehold
interest in the Hotel subject to the proposed Master Lease as at 31 March 2013 for potential IPO
purposes.

We have prepared a comprehensive valuation report on the Hotel in accordance with the instructions of
the Client. This letter and its attachments (including valuation summary) should be read in conjunction
with our full valuation report dated 24 June 2013 (the Full Valuation Report), as this letter does not
Jones Lang LaSalle Property Consultants Pte Ltd
9 Raffles Place #39-00 Republic Plaza Singapore 048619
tel +65 6536 0606 fax +65 6533 2107

Company Reg No. 198004794D
CEA Licence No. L3007326E
D-9

contain all the information and assumptions which are included in the Full Valuation Report. The Full
Valuation Report forms an integral part of our advice and provides descriptive commentaries on the
Property and its local market, and details the key assumptions under which the valuation has been
prepared.

2. The Property

Mandarin Orchard Singapore, 333 Orchard Road, Singapore 238867, and Mandarin Gallery, 333A

The subject Property comprises two principal components as follows:

Mandarin Orchard Singapore (the Hotel);
Mandarin Gallery (the Shopping Gallery).

We understand that the Hotel and Shopping Gallery form a single legal title; however, you have
requested we provide herein our opinion of the value of the Hotel component only. You have also
instructed Jones Lang LaSalle to provide a valuation of the Shopping Gallery within a separate report
(the Shopping Gallery Valuation Report). The Shopping Gallery Valuation Report details our key
findings and opinion of value of the Shopping Gallery element. This report should be read in conjunction
with our Shopping Gallery Valuation Report so as to be conversant with the pertinent issues affecting
the Shopping Gallery element of the Property. Our valuation assumes that the Hotel and Shopping
Gallery form a single title and no allowance is made for any impact on value as a result of a separation
of the current title or creation of strata title interests in respect of the component parts of the Property.

We understand that the Property is held by way of a private leasehold interest for a term of 99 years
from 1 July 1957 expiring in approximately 43.3 years on 30 June 2056 (the Head Lease). This
leasehold interest is the subject of this valuation. The relevant interest is to be owned by the REIT
Trustee, who will in turn grant a master lease (the Master Lease) to a related entity lessee, Overseas
Union Enterprise Limited. We have been instructed to provide the Client with our opinion of the Market
Value of the Head Lease interest in the Hotel Component only of the Property subject to the proposed
Master Lease (as defined below) for potential Initial Public Offering (IPO) purposes on the Main Board
of the Singapore Exchange Securities Trading Limited (SGX-ST) as at 31 March 2013.

Our valuation assumes that the relevant interest in the Property is wholly owned and we have not been
instructed to value the owning company or shares within the company.

3. Basis of Valuation

Our Valuations are prepared in accordance with the International Valuation Standards Council (IVSC)
definition of Market Value and adopted by the Singapore Institute of Surveyors and Valuers (SISV) and
the Royal Institution of Chartered Surveyors (RICS), which is:

The estimated amount for which an asset or liability should exchange on the valuation date between a
willing buyer and a willing seller in an arms-length transaction after proper marketing where the parties
had each acted knowledgeably, prudently and without compulsion.

The Valuation Standards provide interpretive commentaries on the above definition.

Except where stated, our valuation has been prepared in accordance with the RICS Valuation -
Professional Standards (incorporating the IVSC International Valuation Standards), the SISV Valuation
D-10

Standards and Guidelines and our General Principles Adopted in the Preparation of Valuations and
Reports (the General Principles), which are contained within Appendix II and should be read in
conjunction with the following report. In this instance we are acting as external valuers. Your attention is
also drawn to the General Assumptions and Limiting Statements set out in Appendix I.

We understand that the Head Lease interest in the Hotel, which is the subject interest of this valuation,
is to be owned by H-REIT (the Master Lessor), which will in turn lease the Hotel by way of a master
lease (the Master Lease) to Overseas Union Enterprise Limited (the Master Lessee) in whom the
operation is understood will be vested.

In accordance with your instructions, we provide herein our opinion of the Market Value of the remaining
43.3-year leasehold interest in the Hotel held by H-REIT subject to the proposed Master Lease to
Overseas Union Enterprise Limited.

4. Valuation Date

As instructed, the date of the valuation is 31 March 2013 (the Valuation Date).

The Hotel was inspected on 17 April 2013.

The value assessed herein may change significantly and unexpectedly over a relatively short period and
we do not accept liability for losses arising from such subsequent changes in value. Without limiting the
generality of the above comment we do not assume any responsibility or accept any liability where this
valuation is relied upon after the expiration of six months from the Valuation Date, or in the event of a
significant event that may have an effect on value or such earlier date as you become aware of any
factors that may have an effect on value.

5. Qualifications and Assumptions

This valuation is prepared on the basis of the General Principles Adopted in the Preparation of
Valuations and Reports, which comprises a list of the major assumptions and limiting conditions under
which our opinion is given. These are contained within Appendix II (attached to this letter) and should
be read in conjunction with this letter and the Valuation Summary. Other key assumptions are set out in
the General Assumptions and Limiting Statements which are contained within Appendix I. It is a
condition of the use of this valuation that the recipient of the report accepts these statements.

Key assumptions made in respect of the valuation are set out in the commentary provided in the Full
Valuation Report.

We understand that the leasehold interest in the Hotel is assumed to be subject to the Master Lease
between the REIT Trustee and Overseas Union Enterprise Limited. We understand that the proposed
Master Lease has yet to be drafted, however, we have been provided with a summary of key terms. We
have assumed that the Master Lease will incorporate these headline terms set otherwise will be drafted
on commercially acceptable terms with no unusual and onerous clauses which may affect its value or
marketability. Should any terms and conditions subsequently change materially from those provided,
there may be an effect on value and, if this occurs, we reserve the right to amend our valuation
accordingly without liability.

Our valuation does not investigate or consider the entity ownership of the Property upon the successful
acquisition of the Property, nor does it have regard to any lease or side agreements or leases not
registered on the title documents (other than the proposed Master Lease) and assumes that the
D-11

ownership and operating structure, particularly in respect of any applicable provisions of the Master
Lease or management agreement, would not obstruct the ordinary sale of the Hotel. This assumption
has been made in the absence of an expert legal interpretation and opinion. As we are not legal experts,
we recommend that appropriate expert advice be sought to confirm the validity of this assumption.

We would draw your attention to the fact that our valuation has been prepared on the basis of the
following Special Assumptions:

That the Head Lease leasehold interest in the Hotel (99-year leasehold with a remaining term of
43.3 years remaining as at the Valuation Date) has been transferred to and is held by the REIT
Trustee.
It is assumed that the leasehold (Head Lease) interest by the Hotel is held is subject to the Master
Lease between the REIT Trustee and Overseas Union Enterprise Limited. As the proposed Master
Lease is not yet fully drafted, it is expressly assumed that the Master Lease will be executed
incorporating the principal terms as provided to us. In all other respects, it is assumed that the
Master Lease will be drafted on commercially acceptable terms and will contain no unusual or
onerous clauses or rights of first refusal/offer in favour of any party that would affect value or
marketability.
We have been advised by the Client that under the terms of the Master Lease, the Master Lessor
will be responsible for only structural and major mechanical and equipment capital expenditure,
while the rest of the capital expenditure will be borne by the Master Lessee. We understand that, as
part of the transaction to execute the Master Lease, the Master Lessee will enter into a commitment
to carry out certain alteration and refurbishment works at its own cost. We have been advised that
these works include the addition of 26 rooms to the Hotel and a refurbishment of a number of
rooms in the Main Tower. For the purpose of our valuation, we have made the specific Assumption
that the Master Lessee will be obliged to carry out these works immediately after commencement of
the Master Lease and that the benefit of this obligation would transfer to any purchaser of the
Master Lessors interest.
On this basis, our valuation takes into account the phasing of the planned new additional guest
rooms (i.e. existing room count of 1,051 is increased to 1,065 by August 2013 and then to 1,077 by
the end of 2013) and impact on trading during the construction period. It is also assumed that the
Master Lessee will carry out a refurbishment of 144 keys in the Main Tower which will be completed
by December 2013 and a further 286 rooms in the Main Tower by December 2014. Although the
exact timing of the proposed works is yet to be decided, we have made such assumptions as to
timing and phasing of works as we consider reasonable based on our understanding of the
proposals. In accordance with the above, it is expressly assumed that the Master Lessee will be
responsible for the costs of these works and that a hypothetical purchaser would benefit from a
commitment by the Lessee to carry out these works and would not be required to fund them. The
total capital expenditure assumed would be borne by the Master Lessee is approximately $23
million.
We would highlight again that our valuation makes no allowance for any impact on value as a result of a
separation of the current title or creation of strata title interests in respect of the Hotel and Shopping
Gallery components of the Property and we would advise that this report be read in conjunction with our
Shopping Gallery Valuation Report in order to understand our valuation rationale in respect of the
Shopping Gallery component.

No allowances has been made of any expenses of realisation, or for taxation (including GST) which
might arise in the event of a disposal and the property has been considered free and clear of all
mortgages or other charges which may be secured thereon.
D-12


For the avoidance of doubt, these Special Assumptions are in addition to all other Assumptions, and
other qualifications set out in this letter and our Full Valuation Report. We would stress again the
importance of reading this letter and considering our valuation in conjunction with our Full Valuation
Report in order to be fully conversant with our understanding of the key Assumptions and expectations
upon which our valuation has been prepared.

6. Information and Confidentiality

The Client has provided us with relevant information, including Hotel trading performance upon which
we have relied. We have assumed that all such information is correct and complete in all material
respects.

Our valuation and Valuation Summary, which is attached, is based upon material in our possession,
some of which was supplied to us by the Client. Whilst due care has been undertaken in the application
of that information, its accuracy and completeness cannot be fully verified by Jones Lang LaSalle, and
we cannot offer any warranty that factual errors may not have occurred. We would like to be told of any
such errors or incorrect assumptions that the Client becomes aware of so that they can be rectified.

Should it be revealed that any of this information is inaccurate or misleading so that its use would
materially affect the valuation, Jones Lang LaSalle reserves the right to amend its opinion of value
without liability. Jones Lang LaSalle takes no responsibility for any damage or loss by reason of
inaccuracy or incorrectness of this report as a result of information provided to us.

This letter contains information of a confidential nature relating to the ownership, management, business
and financial performance of the Property and has been supplied to Jones Lang LaSalle for the specific
purpose of this valuation.

7. Scope of Work and Approach

To accomplish the objectives of this instruction we have:

Physically inspected the Hotel;
Received information from the Client and made enquiries during the course of our site inspection;
Made appropriate enquiries about the local markets with relevant authorities; and
Used Jones Lang LaSalle valuation computer modelling to prepare our analysis and conclusions.

Our valuation has been undertaken utilising the methods that are mainly considered by potential
investors, namely:

Discounted cash flow (DCF) approach; and
Capitalisation approach.

The selected valuation criteria used in these approaches have been derived from recent market
transactions and the resultant values checked against these transactions on a value per room basis.

Please note, our projections of occupancy and average daily rate did not involve the undertaking of a
specific market demand study but rather are based on our knowledge and understanding of the local
hotel market and our experience of the operating performance of hotels of similar size and standard.

The cash flow forecasts and value estimate have been prepared having regard to:
D-13


Historical room supply, room demand and average daily rates;
Emerging trends in the local hotel market; and
The expected future supply of hotel accommodation in the local market as at the date of our
assessment.

The assumptions in respect to future events are our best estimates at the date of preparing the
valuations. To the extent that any of the assumptions made (and which are noted in our Full Valuation
Report) are not realised, the indicative cash flow projections and estimates of value may be materially
affected.

Our assessments are based upon current as well as expected future conditions as perceived by the
market. We do stress that the estimation of future market conditions is a very problematic exercise
which at best should be regarded as an indicative assessment of possibilities rather than absolute
certainties.

The process of making forward projections involves assumptions regarding a considerable number of
variables which are acutely sensitive to changing conditions. To rely upon our valuations, therefore, the
reader must be satisfied as to the reasoning behind these future estimates.

8. Valuation Methodology

This section briefly summarises Jones Lang LaSalle's approach to the valuation of hotels.

Leased hotel investments for which the rent is wholly or partially based on a proportion of hotel revenue
or profit are generally purchased on the basis of future income potential. Past performance provides
some guide to the future performance of a hotel, but often new macro-economic factors or local supply
issues mean that a fresh view needs to be taken of the performance potential of the hotel.

Generally for hotel properties, we apply both the Capitalization and the Discounted Cash flow (DCF)
approaches. The DCF approach assesses investment value by providing an explicit measurement of
future expected cash flows. We also utilise an income capitalisation approach as well as direct market
comparison

Discounted Cashflow (DCF)

To arrive at an estimate of the Hotel's capital value, we have prepared a projection of the gross and net
rental that may be reasonably expected to be generated by the Hotel, based on our understanding of
the terms of the Master Lease.

In this instance, where a proportion of the receivable income is based on Hotel performance, we have
prepared an income and expenditure forecast for the Hotel, which is used to calculate the gross rental
payable by the Lessee. This forecast represents what we believe a potential purchaser would adopt as
being realistic estimates of the Hotel's future income potential. This is not necessarily the same as what
current Hotel management may project, but represents what a prospective purchaser might believe was
reasonable as a basis for acquisition. From the gross rental, we have made allowances for a capital
reserve to reflect the Lessors responsibilities for capital improvements and repair of the Hotel as well as
allowances for property tax and the Lessors insurance to arrive at a forecast of net income, which we
have then capitalised using a discounted cash flow model.

D-14

The forecast is prepared for a 10-year period. A discount rate is then applied to projections. The cash
flow in the final year of the projection period year is capitalised at an assumed capitalisation rate, and
deferred at the discount rate, and incorporated to arrive at the total investment figure. The choice of
capitalisation rate is selected by reference to historic hotel transaction evidence, yield evidence of other
forms of commercial property, the level of actual rent relative to the market rental level, market factors
and the age, location and condition of the property. In order to arrive at our discount rate, we take
account of long term inflation and the expected growth rate implicit in our cash flow projections.

In accordance with our normal practice, we have cross checked the valuation against other measures
such as the resultant running yields and price per room. Having arrived at an estimate of total
investment, which we consider reasonable, we then deduct, if appropriate, any capital expenditure,
which an investor would require to spend in the foreseeable future over and above the capital reserve as
per the Lessors obligations detailed in the Master Lease.

International and domestic purchasers remain concerned with cash flows and with established or
achieved trading figures, as well as readily foreseeable income flows. These factors have a strong
impact on purchasing decisions and we therefore have regard to the initial and likely returns to an
investor/purchaser in the early years.

We have included in our Full Valuation Report our cash flow projections and comments thereon.

Capitalisation

Capitalisation methodology converts the foreseeable income capacity of the Hotel into a current capital
value by the application of a market/required yield. The income stream utilised in our assessment is the
projected net rental income (including fixed and variable components) after deduction of any non-
recoverable outgoings.

The yield is selected after taking into consideration:

Demonstrated market yields;
The physical appeal and quality of the building and its facilities;
The location, zoning and potential of the underlying freehold or leasehold (as appropriate) land
parcel;
The earnings profile over the last four years (where available);
Expectations of earnings growth; and
The suitability of the current operator and terms of the management agreement.

Again, the capital value produced is then cross checked against other measures such as price per room.

9. Pecuniary Interest

We confirm that we are not a related corporation of the Client and that the Valuers and Jones Lang
LaSalle have no economic interest in the Client or the subject Hotel that would conflict with the proper
valuation of the Hotel or could reasonably be regarded as being capable of affecting the Valuers ability
to give an unbiased opinion.

10. Use of Report

In accordance with our standard practice we must state that this valuation and report is for the use of the
Client and its nominees. No responsibility or liability is accepted to any third parties and neither the
D-15

whole nor any part nor any reference thereto may be published in any document, statement or circular
nor in communication with third parties without our prior written approval of the form and context in
which it will appear.

Notwithstanding the above, in the event our consent is given and this valuation summary appears in the
Prospectus to be issued by the Manager in connection with the offering of units in the OUE Hospitality
Trust, we specifically disclaim liability to any person in the event of any omission from or false or
misleading statement included in the Prospectus, other than in respect of the information provided within
the valuation report and summary. We do not make any warranty or representation as to the accuracy of
the information in any part of the Prospectus other than as expressly made or given in this valuation
summary.

In the event that Jones Lang LaSalle consents to the disclosure of this valuation report in connection
with the proposed IPO, such disclosure is approved solely for the purpose of providing information to
potential investors or any other interested person. This report does not purport to contain all the
information that a potential purchaser or any other interested party may require. It does not take into
account the individual circumstances, financial situation, investment objectives or requirements of a
potential purchaser or any other person. It is intended to be used as a guide only and does not
constitute advice, including without limitation, investment, tax, legal or any other type of advice.

The valuation stated herein is, in the opinion of Jones Lang LaSalle, the best estimates and should not
to be construed as a guarantee or prediction and the valuations are fully dependent upon the accuracy
of the assumptions made. Investors and/or potential investors should not rely on any material contained
in this report as a statement or representation of fact but should satisfy themselves as to its correctness
by such independent investigation as they or their legal or financial advisors see fit after reviewing the
valuation report to understand the particular assumptions and methodologies made in the preparation of
the valuations and to appreciate the context in which the value is arrived at.

This report includes information provided by third parties. Figures, calculations and other information
contained in this report that has been provided to Jones Lang LaSalle by third parties have not been
independently verified by Jones Lang LaSalle and Jones Lang LaSalle takes no responsibility for it and
subsequent conclusions related to such data.

Jones Lang LaSalle / Jones Lang LaSalle Property Consultants Pte Ltd, its directors, employees,
affiliates and representatives shall not be liable (except to the extent that liability under statute or by
operation of law cannot be excluded) to any person for any loss, liability, damage or expense arising
from or connected in any way with any use of or reliance on this report.

CEA Licence: L3007326E

Ed Fitch MA MRICS
Executive Vice President
Hotels & Hospitality Group
Tan Keng Chiam BSc (Est. Mgt.) MSISV
AD041-2004796D
Regional Director

D-16

VALUATION SUMMARY

Property : Mandarin Orchard Singapore, 333 Orchard Road, Singapore 238867

The Property forms part of a mixed development which comprises both the Mandarin
Orchard Hotel Singapore and the underlying retail podium known as Mandarin Gallery (the
Shopping Gallery) (collectively, the Property). This valuation report is of that component
of the Property comprising the Mandarin Orchard Hotel Singapore (as described in this
report) only.

Tenure / Legal Description : The Land is defined TS21-01546N as comprised in the Certificate of Volume 693 Folio 94.

The private leasehold interest for a term of 99 years from 1 July 1957 expiring in
approximately 43.3 years on 30 June 2056.

Assumed Interest Valued : We understand that the Property is held by way of a private leasehold interest for a term of
99 years from 1 July 1957 expiring in approximately 43.3 years on 30 June 2056 (the Head
Lease). This leasehold interest is the subject of this valuation. The relevant interest is to
be owned by the REIT Trustee, who will in turn grant a master lease (the Master Lease) to
a related entity lessee, Overseas Union Enterprise Limited.

Location : The Property is located along Orchard Road, at the centre of the prime shopping belt of
Singapore. The immediate vicinity of the Property is primarily commercial and several
hotels are also located this area. The Orchard Road area is the main shopping district in
Singapore and features a diverse mix of retail complexes, hotels and commercial buildings.

The Property is approximately five kilometres from the Central Business District / Raffles
Place and other major shopping areas further east such as City Hall and Suntec City Mall.
Orchard and Somerset MRT Stations are approximately a five-minute walk and equidistant
from the Hotel while Changi International Airport is approximately 22 kilometres to the east
(a 20-minute drive subject to traffic conditions).

Property Description : The Mandarin Orchard Singapore, which officially opened in August 1971, comprises of
1,051 guestrooms housed across two main blocks: a 37-storey block known as the Main
Tower and a 39-storey block known as the Orchard Wing. Both blocks sit on top of a five-
storey podium comprising of four levels of the Mandarin Gallery and one level for the Hotel
lobby and public facilities on the fifth floor providing access to both guestroom wings.

The Hotel comprises a city centre upscale hotel with five F&B outlets, one lounge, three
ballrooms and eight meeting rooms, fitness centre, outdoor swimming pool, tennis court,
business centre and 441 parking lots. The main lobby to the Hotel is located on level 5 to
which guest access is via lifts either through the main entrance along Orchard Link or
through Mandarin Gallery.

Repair and Condition : The overall standard of maintenance appears to be good and the Property generally
presents well.

Site Area : 10,305.3 sq m (approximately 110,925 sq ft)

Gross Floor Area (GFA) : Approximately 91,999.8 sq m (approximately 990,277 sq ft)

Zoning: : Zoned for hotel use with a gross plot ratio of 4.9+.

Tenancy (Master Lease) : It is assumed that the private leasehold (Head Lease) interest in the subject Property will be
owned by the REIT Trustee (the Master Lessor). The Master Lessor will in turn lease the
Hotel component of the Property to Overseas Union Enterprise Limited (the Master
Lessee) by way of a master lease (the Master Lease) for an initial term of 15 years from
commencement date (undefined) but for the purpose of this valuation, assumed to be the
Valuation Date, subject to a further extension of 15 years upon expiry of the initial term at
D-17

the Master Lessees option.

Lessor:

RBC Investor Services Trust Singapore Limited as trustee of OUE H-REIT
Lessee: Overseas Union Enterprise Limited
Term: Initial term of 15 years from commencement date (assumed to be the
Valuation Date).

Extension term of 15 years upon expiry of the initial term at the Lessees
option.

Rent: Gross Rent: Fixed Rent plus Variable Rent
- Fixed Rent: (S$ 45 million per annum), payable monthly;
- Variable Rent is 33.0% of Hotels Gross Revenue and 27.5% of
Hotels Gross Operating Profit (GOP) less Fixed Rent, subject to a
minimum of zero.
Therefore total rent payable is effectively 33.0% of Hotels Gross Revenue
and 27.5% of Hotels Gross Operating Profit (GOP), subject to a minimum
rent.

Repair: Lessees Obligations
Lessee to repair and maintain the Property, its infrastructure, plant and
equipment which are not capital in nature;

Lessors Obligations
Master Lessor is responsible for all structural and major machinery and
equipment capital expenditure.

We understand that the Hotel will be further subject to an internal Hotel Management
Agreement between the Lessee and the Hotel Manager, a subsidiary of Overseas Union
Enterprise Limited.

The above lease summary is intended to identify and prcis selected key terms only and should not be relied on in isolation.
Where matters arise relating to the content of the Master Lease and its interpretation, independent legal advice is to be
obtained by the reader. Furthermore it is essential that the entire Master Lease is referenced by the reader and its legal
advisors. Jones Lang LaSalle does not provide legal advice and does not extend any liability in this regard.

Methodology : Discounted Cashflow, Capitalisation

Market Value
Subject to the Comments
and Assumptions
contained within our Full
Valuation Report
: Mandarin Orchard Singapore
S$1,180,000,000 (One Billion One Hundred Eighty Million Singapore Dollars)

Date of Valuation : 31 March 2013

Notice : This valuation summary should be read in conjunction with the foregoing letter, the General
Principles and Limiting Conditions to which it refers and also our Full Valuation Report
dated 24 June 2013, which details the conditions and assumptions under which this
valuation is prepared.
D-18

APPENDIX I

GENERAL ASSUMPTIONS AND LIMITING STATEMENTS
D-19

GENERAL ASSUMPTIONS AND LIMITING STATEMENTS

Our assessment is based upon current market, as well as likely future conditions as perceived by the market. We
do stress that the estimation of future market conditions is a very problematic exercise which, at best, should be
regarded as an indicative assessment of possibilities rather than absolute certainties. The process of making
forward projections involves assumptions regarding a considerable number of variables, which are acutely
sensitive to changing conditions. To rely upon this therefore, readers must satisfy themselves as to the reasoning
behind these future estimates.

Our valuations have been prepared in accordance with the General Principles contained in Appendix 5 of our
report. We would draw you attention to the following assumptions which have been made in the preparation of our
advice:
Unless otherwise stated, our valuation is on the basis of Market Value, which is defined as The estimated
amount for which an asset or liability should exchange on the valuation date between a willing buyer and a
willing seller in an arms-length transaction after proper marketing where the parties had each acted
knowledgeably, prudently and without compulsion.

We have assumed that the information provided to us is correct, particularly that the Hotels historic operating
figures accurately reflect its trading history.

It is assumed that the Hotel includes all operating equipment, furniture, fixtures, fittings and equipment
necessary to manage a hotel of this standard, that they would remain in the Hotel on sale and that this
equipment is owned, not leased. We have not separately assessed the transferable value of the goodwill nor
made an inventory or separately assessed the value of furniture, fittings, plant and equipment.

Our valuation assumes the Hotel is open for business will continue to trade normally up until the date of sale.
The valuation further assumes a prospective purchaser would engage the existing staff (but not necessarily
the senior management) and take over the benefit of future bookings.\

We have not fully searched nor verified the authenticity of the land titles. Our valuation is prepared on the
assumption that the Hotel and title is free and clear of encumbrances, restrictions, or other impediments of an
onerous nature, which would affect value. Our valuation is made on the basis that the Hotel is free of
mortgages, charges and other financial liens.

We have not conducted a land survey to verify the land boundaries and site areas and whether all
developments and improvements are within such boundaries. We have assumed, unless otherwise stated,
that all developments and improvements are within the boundaries of such land parcel as described in this
report and the land parcel is fully owned by the Hotel owner.

We have not had sight of a zoning certificate, building, fire safety certificate or other statutory requirements,
and it is assumed, unless otherwise stated, that all appropriate licences and approvals are held to operate the
hotel and the various food and beverage facilities. It is assumed that the Hotel complies with the
requirements of all local government regulations. It is also assumed that the Hotel has the benefit of all
necessary planning consents and that they are subject to no unusual, onerous or restrictive conditions.

We have not carried out a structural survey nor have we tested any of the service installations, and therefore
are unable to state the Hotel is free from defect. Unless advised to the contrary, we have assumed that the
premises contain no deleterious materials such as high alumina cement concrete, woodwool, permanent
shuttering or asbestos.

Our inspection is limited to areas where we have access to and viewing of typical guestroom and other
facilities. We have relied on information provided by the Hotel Management, including the Hotel fact sheets
and marketing materials, with respect of room inventory, types, sizes and configurations, Food and Beverage
outlets, meeting, recreation and other facilities.
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Our valuation assumes that the Hotel is sold in the open market without the benefit of a leaseback, joint
venture, or any similar agreement, which could serve to affect the value of the Hotel.

We have assumed that the Hotel would be properly and effectively marketed to both domestic and
international purchasers allowing a reasonable period of time (being between six and nine months) for
exposure to the market and negotiation. We have also assumed that the Hotels existing management would
assist in the marketing process and provide all relevant information.

No allowances are made for any expenses or taxation, which might arise in the event of a sale or disposal.
The Hotel is assumed to be free and clear of all mortgages, encumbrances, outstanding premiums, charges
and liabilities.

The valuation assumes any funds accumulated as FF&E Reserve, if any, is the Hotel of the owner in any sale
and is accordingly excluded from this valuation.

We have assumed stability in business, tourism, economic and political situations in Singapore and that no
significant changes of an adverse nature will occur. We also assume the level of the Singapore Dollar against
other world currencies will remain as attractive to overseas visitors as at the Valuation Date.

D-21

APPENDIX II

GENERAL PRINCIPLES ADOPTED IN THE PREPARATION
OF VALUATIONS AND REPORTS
D-22

General Principles Adopted in the Preparation of Valuations and Reports

It is our objective to discuss and agree the terms of our instructions and the purpose and basis of the valuation, at the outset, to ensure that we fully
understand and meet our client's requirements.
This document sets out the general principles upon which our Valuations and Reports are normally prepared in our capacity as overseas consultants,
and the conditions that apply to and form part of our Valuations and Reports. They apply unless we have specifically mentioned otherwise in the body of
the report. Where appropriate, we will be pleased to discuss variations to suit any particular circumstances, where appropriate, or to arrange for the
execution of structural or site surveys, or any other more detailed enquiries. Any such variations to these general principles and/or conditions must be
confirmed in writing.
These General Principles should be read in conjunction with Jones Lang LaSalles General Terms and Conditions of Business.
1. Valuation Standards:
Valuations and Reports are prepared in accordance with the International Valuation Standards published by the International Valuation
Standards Council (IVSC) subject to variations to meet local established law, custom, practice and market conditions. Where the Valuation
Standards are silent on subjects requiring guidance, we would refer to the RICS Valuation - Professional Standards published by the Royal
Institution of Chartered Surveyors ("RICS"), subject to variation to meet local established law, custom, practice and market conditions with the
RICS Valuation - Professional Standards prevailing over IVSCs International Valuation Standards to the extent of any inconsistency.
2. Valuation Basis:
Properties are generally valued to Market Value or alternatively another basis of valuation as defined in the Valuation Standards. Market
Value is defined as The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a
willing seller in an arms-length transaction after proper marketing where the parties had each acted knowledgeably, prudently and without
compulsion.
This assumes:
a willing seller and a willing buyer;
that, prior to the Valuation Date, there had been a reasonable period (having regard to the nature of the property and the state of the
market) for the proper marketing of the interest, for the agreement of the price and terms and for the completion of the sale;
that the value of the property is an estimated amount, rather than a predetermined or actual sale price on the Valuation Date;
that the estimate specifically excludes an estimated price inflated or deflated by special terms or circumstances such as atypical financing,
sale and leaseback arrangements, special considerations or concessions granted by anyone associated with the sale, or any element of
special value;
that the state of the market, level of values and other circumstances were, on any earlier assumed date of exchange of contracts, the
same as on the Valuation Date; that both parties to the transaction had acted knowledgeably, prudently and without compulsion;
that the transaction is presumed to be between unrelated parties each acting independently.
The full definition of any other basis, which we may have adopted, is either set out in our report or in the Valuation Standards.
There are interpretative commentaries on the definitions which are set out in the Valuation Standards and which we will be pleased to supply
on request.
In our valuations no allowances are made for any expenses of realisation, or for taxation, which might arise in the event of a disposal. All
property is considered as if free and clear of all mortgages, outstanding premiums, charges and liabilities, or similar financial encumbrances,
which may be secured thereon.
Our valuations are made on the assumption that the owner sells the property on the open market without benefit of a deferred terms contract,
leaseback, joint venture or similar arrangement which would serve to affect the value of the property.
Unless otherwise stated, our valuations are of each separate property. Portfolio valuations are aggregates of individual valuations rather than
the portfolio having been valued as a whole. No allowance is made for the effect of the simultaneous marketing of all/or a proportion of the
properties.
Each valuation is current as at the Valuation Date only. The value assessed may change significantly and unexpectedly over a relatively short
period (including as a result of general market movements or factors specific to the particular property). We do not accept liability for losses
arising from such subsequent changes in value. Without limiting the generality of preceding half of this paragraph, we do not assume any
responsibility or accept liability where this valuation is relied upon after the expiration of six months from the Valuation Date.
3. Source of Information:
We accept as being reliable, complete and correct the information provided to us, by the sources listed, as to details of tenure, tenancies,
tenant's improvements, planning consents and other relevant matters, including trading information, as summarised in our report. Unless
D-23

stated otherwise, the information on which our valuations are based is supplied to us by the Client and/or their advisors. We make no
representations or warranties as to the reasonableness, reliability or accuracy of the information provided to us.
4. Title and Other Documentation:
We do not normally read leases or documents of title. We assume, unless informed to the contrary, that each property has a good and
marketable title, that all documentation is satisfactorily drawn and that there are no encumbrances, restrictions, easements or other outgoings
of an onerous nature, which would have a material effect on the value of the interest under consideration, nor material litigation pending. We
also assume that all property taxes and any other statutory dues have been paid.
Where we have been provided with documentation we recommend that reliance should not be placed on our interpretation without verification
by your lawyers.
5. Tenants:
Although we reflect our general understanding of a tenant's status in our valuations, enquiries as to the financial standing of actual or
prospective tenants are not normally made unless specifically requested and agreed to in writing. Where properties are valued with the benefit
of lettings, it is therefore assumed, unless we are informed otherwise, that the tenants are capable of meeting their financial obligations under
the lease and that there are no arrears of rent or undisclosed breaches of covenant.
6. Measurements:
We do not normally measure premises unless specifically requested and agreed in writing, and we base our valuation on the information made
available to us. Where measurement is undertaken this is carried out in accordance with either the relevant local codes or the Code of
Measuring Practices issued by the Royal Institution of Chartered Surveyors except in the case of agricultural properties or where we
specifically state that we have relied on another source.
We have not conducted a land survey to verify the land boundaries and site areas and whether all developments and improvements are within
such boundaries. We have assumed, unless otherwise stated, that all developments and improvements are within the boundaries of such land
parcel as described in this report and the land parcel is fully owned by the property owner.
7. Planning and Other Statutory Regulations:
Where possible, information on Planning or Zoning, wherever possible, is obtained verbally from the relevant competent Local Planning
Authority. In certain jurisdictions, however, it is often not possible to make such verbal enquiries.
We do not make formal legal enquiries and, if reassurance is required, we recommend that verification be obtained from your lawyers that:-
7.1. the position is correctly stated in our report;
7.2. the property is not adversely affected by any public schemes such as road and drainage improvements or any other decisions made, or
conditions prescribed, by public authorities;
7.3. there are no outstanding statutory notices.
Our valuations are prepared on the basis that the premises (and any works thereto) comply with all relevant local statutory regulations,
including enactments relating to fire regulations, access and use by disabled persons and control and remedial measures for asbestos. Where
required by local legislation, it is assumed that they have been, or will be issued with a Certificate of Statutory Completion by the competent
authority. We will not undertake independent verification of the compliance with statutory norms that regulate the development of the
respective properties and the information on land use, development mix and size which have been provided by the Client. For development
projects we will assume that all the relevant approvals have been obtained and all fees and charges payable, if any, have been fully settled.
8. Structural Surveys:
We have not carried out a building survey nor any testing of services and we therefore do not give any assurance that any property is free from
defect. We seek to reflect in our valuations any readily apparent defects or items of disrepair, which we note during our inspection, or costs of
repair which are brought to our attention, however, we are not able to give any assurance in respect of rot, termite or past infestation or any
other defects.
We have not inspected those parts of the property which are inaccessible. We cannot express an opinion about or advise upon the condition
of parts that have not been inspected and this Report should not be taken as making any implied representation or statement about such parts.
9. Deleterious Materials:
We do not normally carry out investigations on site to ascertain whether any building was constructed or altered using deleterious materials or
techniques (including, by way of example, high-alumina cement concrete, woodwool as permanent shuttering, calcium chloride or asbestos).
Unless we are otherwise informed, our valuations are on the basis that no such materials or techniques have been used.
10. Site Conditions:
We do not normally carry out investigations on site in order to determine the suitability of ground conditions and services for the purposes for
which they are, or are intended to be, put; nor do we undertake archaeological, ecological or environmental surveys. Unless we are otherwise
D-24

informed, our valuations are on the basis that these aspects are satisfactory and that, where development is contemplated, no extraordinary
expenses or delays will be incurred during the construction period due to these matters.
11. Environmental Contamination:
We do not carry out site surveys or environmental assessments, or investigate historical records, to establish whether any land or premises
are, or have been, contaminated. Therefore, unless advised to the contrary, our valuations are carried out on the basis that properties are not
affected by environmental contamination. However, should our site inspection and further reasonable enquiries during the preparation of the
valuation lead us to believe that the land is likely to be contaminated we will discuss our concerns with you.
12. Insurance:
Unless expressly advised to the contrary we assume that appropriate cover is and will continue to be available on commercially acceptable
terms. Accordingly, our opinions of value make no allowance for the risk that insurance cover for any property may not be available, or may
only be available on onerous terms, including against risk of loss or damage from terrorism, fire, flood, rising water and deleterious materials
such as composite panels.
13. Outstanding Debts:
In the case of property where construction works are in hand, or have recently been completed, we do not normally make allowance for any
liability already incurred, but not yet discharged, in respect of completed works, or obligations in favour of contractors, subcontractors or any
members of the professional or design team.
14. Disposal Costs and Liabilities
No allowance for expenses of sale, which may be considerable, or liabilities to taxation (including GST or VAT), which might arise on a
disposal. No allowance is made for transfer costs in disposing of the Property (whether payable by the vendor or purchaser) as such matters
often depend on the manner in which the sale is conducted, nor for any interest, which might accrue prior to a disposal. All property is
considered free and clear of all mortgages or other charges, which may be secured thereon unless otherwise advised.
15. Currency:
Valuations are prepared in the appropriate local currency. In some countries, particularly where inflation rates are unduly high, property values
are often expressed in an international currency (eg. US Dollars).
16. Tax:
Valuations are prepared and expressed exclusive of any applicable local tax (including GST or VAT) unless otherwise stated. Income upon
which our valuation is based, including any cash flow forecasts (as set out in the report) are exclusive of any such taxes.
17. Confidentiality and Third Party Liability:
Our Valuations and Reports are confidential to the party to whom they are addressed for the specific purpose to which they refer, and no
responsibility whatsoever is accepted to any third parties. Neither the whole, nor any part, nor reference thereto, may be published in any
document, statement or circular, nor in any communication with third parties, without our prior written approval of the form and context in which
it will appear.
18. Valuations Prepared On Limited Information:
In the event that we are instructed to provide a valuation without the opportunity to carry out an adequate inspection and/or without the extent
of information normally available for a formal valuation, we are obliged to state that the valuation is totally dependent on the adequacy and
accuracy of the information supplied and/or the assumptions made. Should these prove to be incorrect or inadequate, the accuracy of the
valuation may be affected.
19. Reinstatement Cost Estimates
Where we provide an opinion of Reinstatement Cost Estimates, our opinion is of the current reinstatement cost of the building as it exists at the
Valuation Date.
The figure includes estimates of demolition cost, professional fees, furniture, fittings and equipment costs but excludes taxes. The figure is
based on the estimated cost of work as at the date of assessment and no allowance is made for depreciation of the existing buildings. We
make no allowance for the potential loss of income or rent during the reinstatement period in the reinstatement cost figure reported, nor do we
allow for the cost of alternative accommodation. The reinstatement cost assessment does not include any consequential loss and liabilities to
third parties.
Such estimates are based on information provided by the client and such construction cost data as may be available in the public domain
(notably the Davis, Langdon and Seah cost index and similar publications) and our own experience of development in the relevant market. It
should be noted that, in many markets, publicly available data is limited and reliable information as to actual building costs is scarce. Our
estimates should, therefore, be regarded as a guide to check the current level of cover only and not as a basis for placing insurance. We would
be pleased to arrange such an exercise, on your behalf, should you require it. We recommend that the client satisfy themselves as to the likely
reinstatement cost for insurance purposes by obtaining a formal estimate prepared by a Quantity or Building Surveyor or other person with
sufficient current experience of reinstatement costs in the relevant market.
D-25

20. Hotels:
Hotels and certain similar properties are usually sold as fully operational entities, including trade fixtures, fittings, furniture, furnishings and
equipment. The new owner will normally engage the existing staff and sometimes the management and would expect to take over the benefit
of future bookings, which are an important feature of the continuing operation.
Accordingly, our valuations assume that the hotel is open for business and trading up to the date of sale. Unless stated to the contrary, it is
assumed that it has the benefit of all necessary licences, consents, registration certificates and permits, as appropriate (including fire
certificates), and that they can be renewed. Consumable stocks are excluded from the valuation of the property.
Fixtures, fittings, furniture and stock are taken into account as apparent on inspection (or otherwise indicated to us) on the basis that the hotel
is suitably equipped for the satisfactory continuation of the business and that all such furniture, fittings and equipment will be included in any
sale.
Unless informed to the contrary, we assume that no particular value attaches to any item of furniture or work of art and also that all furniture,
fittings and equipment is owned and not subject to any lease arrangement.
In arriving at our valuation we consider trading accounts for previous years, where they are available and, where appropriate, we have regard
to management accounts, forecasts and projections of future trading activity as indicators of future potential. Such information is checked
where appropriate but is normally accepted as accurate unless contrary indications are received. In the event of a future change in the trading
potential or actual level of trade from that indicated by such information and assumptions, the value of the hotel could vary, and could fall as
well as rise.
No allowance is made for any contingent tax liabilities or liability to staff (whether relating to redundancy payments, pensions or otherwise)
unless expressly stated.
Unless otherwise instructed, we adopt the date of the inspection as the Valuation Date.

Copyright Jones Lang LaSalle - January 2013
D-26

APPENDIX III

STANDARD TERMS AND CONDITIONS OF BUSINESS

D-27

Jones Lang LaSalle General Terms and Conditions of Business

1. General
1.1 These General Terms and Conditions of Business (the Terms and Conditions) shall apply to all dealings between Jones
Lang LaSalle (we, us and/or the Firm) and its client (the Client) and, for the avoidance of doubt, shall be treated as
applying separately to each Instruction given by the Client to Jones Lang LaSalle.
1.2 The appointment shall, unless otherwise specifically agreed, be exclusive and commence on the date the Client confirms
our instruction by returning a signed copy of the letter of instruction.
1.3 These Terms and Conditions are deemed incorporated into the letter of instruction signed by the Client and Jones Lang
LaSalle and shall govern the provision of services to the Client thereunder.
2. Performance of the Services
2.1 Jones Lang LaSalle is to provide all Services to the specification and performance level stated in writing or, if none is
stated, to the specification and performance level that it ordinarily provides. Jones Lang LaSalle has no responsibility for
anything that is beyond the scope of the Services so defined.
2.2 Jones Lang LaSalle shall exercise all reasonable skill and care in providing the Services under the Instruction and shall
inform the Client if it becomes apparent that the Services need to be varied. The Client and Jones Lang LaSalle shall
confirm in writing any variation of the Services to be provided under the Instruction.
3. Assignment and Sub-Contracting
3.1 The Client shall, with the prior written consent of Jones Lang LaSalle, have the right to assign the whole or any part of the
benefit or to transfer in any way the obligation contained in the Instruction, such consent shall not to be unreasonably
withheld (and it is hereby acknowledged that if the proposed assignee or novatee is, in the reasonable opinion of Jones
Lang LaSalle, less creditworthy than the Client, it shall be reasonable to withhold such consent)..
3.2 Jones Lang LaSalle shall have the right to sub-contract the performance of all or part of the Services from time to time.
Should this occur, Jones Lang LaSalle will nevertheless and unless otherwise specifically agreed, remain responsible to the
Client for the due and proper performance of the Services.
4. Information provided by Client
4.1 The Client shall promptly provide to Jones Lang LaSalle all information as is necessary or reasonably requested by Jones
Lang LaSalle in order to enable Jones Lang LaSalle to properly perform the Services.
4.2 The Client accepts that Jones Lang LaSalle is entitled to rely on the accuracy, sufficiency and consistency of any and all
information supplied by the Client. Jones Lang LaSalle accepts no liability for any inaccuracies contained in information
disclosed by the Client, whether prepared by the Client or by a third party and whether or not supplied directly to Jones
Lang LaSalle by that third party.
4.3 Save as expressly agreed herein, except where required by law or by any proper authority or where the Client has waived
such rights in writing, all confidential information provided by the Client shall be kept confidential by Jones Lang LaSalle.
4.4 Jones Lang LaSalle shall ensure that all persons whether employed by it or working under its direction in the course of
performing the Services abide strictly by the obligation to keep all confidential information provided by the Client
confidential.
4.5 All confidential information provided by the Client will be returned, destroyed or erased upon the Clients request. Save that
Jones Lang LaSalle reserves the right to retain one copy of the confidential information for the purpose of compliance with
professional, legal or regulatory requirements or obligations (subject always to its continuing duty to treat such information
as confidential).
5. Information provided by Jones Lang LaSalle
5.1 Copyright in all material of whatever nature prepared by Jones Lang LaSalle and provided to the Client or otherwise
generated in the course of carrying out the Services shall remain the property of Jones Lang LaSalle. No part of any report,
document or publication may be reproduced or transmitted or disclosed in any form or by any means, or stored in any
database or retrieval system of any nature, without the prior written permission of Jones Lang LaSalle.
5.2 All information and advice made available by Jones Lang LaSalle to the Client is for the sole use of the Client and for the
sole purpose for which it was prepared in connection with the Services.
6. Duty of care to third parties
Jones Lang LaSalle owes a duty of care to only its Client. No third party has any rights unless there is specific written agreement to
the contrary.
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7. Third Party Liability
7.1 Jones Lang LaSalle has no liability for products or services that it reasonably needs to obtain from others in order to
provide services. Jones Lang LaSalle may delegate to a third party the provision of any other part of services, but if it does
so:
(a) without the Client's approval, Jones Lang LaSalle shall be responsible for the actions or omissions of that third party;
(b) with the Client's approval or at the Client's request, Jones Lang LaSalle shall not be responsible for the actions or
omission of that third party. In this event, Jones Lang LaSalle does not warrant the performance, work or the products
of others and the Client shall not hold Jones Lang LaSalle responsible for the inspection or supervision of the
execution of such performance, work or products.
7.2 Unless otherwise specifically agreed in writing neither these Terms and Conditions of Business or the Services provided
pursuant to the Instruction are intended, either expressly or by implication, to confer any benefit on any third party
(excepting that is as provided specifically herein to the employees and subcontractors of Jones Lang LaSalle). The liability
of Jones Lang LaSalle to any third party is expressly disclaimed.
8. Delay
We shall not be responsible for any delay to the performance of the Services, where matters beyond our control cause such delay.
9. Payment of Fees, Expenses and Disbursements
9.1 Payment of the fees for the Services shall be calculated, charged and made as set out in the letter of instruction or any
variation thereto agreed by the Client and Jones Lang LaSalle.
9.2 The Client shall pay the expenses of and reimburse the disbursements incurred on its behalf by the Firm as specified, or on
the basis set out in the Instruction or any variation thereto agreed by the Client and the Firm.
9.3 All references to fees, expenses and disbursements are exclusive of any applicable government taxes. Any such taxes
chargeable on the Firms fees expenses and disbursements shall be paid by the Client.
9.4 Where for any reason the Firm provides only part of the services as specified in the attached proposal, the Firm shall be
entitled to fees proportionate to those services set out in the attached proposal that apportioned, based on our estimate of
the percentage of completion.
9.5 In the event that invoices are not settled in full within 28 days of submission, the Firm reserves the right to withdraw
responsibility for work performed.
9.6 If an invoice is not paid in full within 30 (thirty) days from the date of issuance, Jones Lang LaSalle shall be entitled to
charge interest on the balance due at a daily rate of 0.05%.
10. Termination
10.1 In the event that either party is in material or persistent breach of any of the terms of the Instruction, the other party may
terminate the instruction if, upon the expiry of 14 days after serving notice on the party in default, steps have not been taken
to remedy the breach.
10.2 On termination of the Instruction, the Firm shall be entitled to, and shall be paid, fees for all Services provided to that time,
in accordance with the above clause.
10.3 On termination, Jones Lang LaSalle shall return to the Client or, if the Client so instructs in writing, destroy all Client
information that is to be kept confidential, but Jones Lang LaSalle may keep (and must continue to keep confidential) one
copy of that information to comply with legal, regulatory or professional requirements.
11. Liability
11.1 Our liability to the Client for loss or damage shall be limited to such sum as Jones Lang LaSalle or Jones Lang LaSalle
Property Consultants Pte Ltd (us, we and/or the Firm) ought reasonably to pay having regard to its direct responsibility
for the same and on the basis that all other third parties shall, where retained by the Client, be deemed to have provided to
the Client contractual undertakings in terms no less onerous than this clause in respect of the performance of their services
in connection with the instruction, and shall be deemed to have paid to the Client such proportion as may be just and
equitable having regard to the extent of their responsibility for such loss or damage.
11.2 Unless otherwise agreed, our liability to the Client for loss or damage claimed in respect of any Instruction shall,
notwithstanding the provisions of the paragraph above, in any event be limited to an aggregate sum not exceeding
S$1,000. This cap on liability will not apply to loss caused by the Firm in the case of its fraud or wilful default. In no event
shall the Firm be liable to the Client or to any third party with respect to the Instruction for any (a) incidental, special,
D-29

punitive, consequential or indirect damages or (b) damages resulting from loss of sale, business, profits, opportunity or
goodwill.
11.3 Unless, and to the extent finally and judicially determined to have been caused by fraud, wilful default or negligence of the
Firm, the Client agrees to indemnify on demand and hold harmless the Firm against all actions, claims, proceedings,
losses, damages, costs and expenses whatsoever and howsoever arising from or in any way connected with the Instruction
or the provision of Services thereunder.
11.4 Unless and until any such agreement is reached and recorded in writing, Jones Lang LaSalle will accept no responsibility or
owe no duties to the Client which relate to matters beyond the scope of the Services.
11.5 The Client acknowledges that any action, claim or proceedings arising out of the Services provided under the Instruction
shall be brought against the Firm with whom the Client has contracted and not against any employee, director or
subcontractor of Jones Lang LaSalle involved directly or indirectly in the delivery of the Services.
11.6 The Client agrees that (except for fraud or a criminal offence) no employee, consultant or agent of any member of the
Jones Lang LaSalle group of companies has any personal liability to the Client, and that neither the Client nor anyone
representing the Client will make a claim or bring proceedings against an employee, consultant or agent personally.
12. Indemnity from the Client
12.1 The Client agrees that it shall indemnify and keep indemnified the Firm from and against all claims, actions, proceedings,
demands, liabilities, losses, damages, costs (including reasonable legal costs) and expenses ("Losses") which the Firm
may suffer or incur in any jurisdiction arising out of or in connection with:
(i) a breach by the Client of the Agreement or the Terms and Conditions; or
(ii) any negligence, act, default or omission by the Client, or the Client's consultants, employees or agents; or
(iii) any inaccuracies or omissions in information supplied by Clients and/or its agents to the Firm and/or its agents; or
(iv) any claim by a third party that any information or material infringes the intellectual property rights of a third party where
such information or material was provided by the Client and/or its agents to the Firm and/or its agents; or
(v) the Instruction or the provision of Services thereunder
provided that the Client shall be relieved from its indemnity obligations to the extent that any Losses are directly caused by
or attributable to Jones Lang LaSalle's fraud, negligence or wilful default under the letter of instruction or these Terms and
Conditions. Without prejudice to any claim that Jones Lang LaSalle may have against the Client, no proceeding may be
taken against any director, officer, employee or agent of the Client in respect of any claim except for fraud or a criminal
offence.
13. Duty of care to the Client
13.1 Jones Lang LaSalle owes to the Client a duty to act with reasonable skill and care in providing services, complying with the
Client's instructions where those instructions do not conflict with:
(i) these Terms and Conditions,
(ii) the Agreement, or
(iii) applicable law and professional rules and internal policies of Jones Lang LaSalle including but not limited to the Code
of Business Ethics.
13.2 Jones Lang LaSalle has no liability for the consequences of any failure by the Client or any agent of the Client to promptly
provide information or other material that Jones Lang LaSalle reasonably requires, or where that information or material is
inaccurate or incomplete.
14. Dispute Resolution Procedure
14.1 In the event of any complaint, dispute or difference arising out of or in connection with these Terms and Conditions or the
related letter of instruction, senior representatives of the Client and the Firm shall, within fourteen (14) days of a notice from
either party to the other, meet in good faith in an effort to resolve the issue amicably.

14.2 If the parties are unable to resolve the issue within twenty eight (28) days of a meeting involving the parties senior
representatives, then, either party may submit such dispute to arbitration. Any such arbitration shall take place at the
Singapore International Arbitration Centre (SIAC) in accordance with the then prevailing rules of SIAC. The arbitration
tribunal shall consist of one arbitrator selected by SIAC. The arbitration shall be conducted in English. The arbitral award
will be final and binding upon both parties. Each party will bear its own attorneys fees and costs related to the arbitration.
Judgment upon the award may be entered in any court of competent jurisdiction for execution.

D-30

15. On line Services
Jones Lang LaSalle may in order to facilitate delivery of the Services and/or general communication with the Client, offer and/or
provide from time to time electronic systems and/or software to the Client which shall be provided on the then prevailing terms and
conditions by which Jones Lang LaSalle provides such electronic systems and/or software.
16. Severance
Any provision of the Instruction, including any provision contained in the General Conditions, which is declared void or unenforceable
by any competent authority or court shall, to the extent of such invalidity or unenforceability, be deemed severable and shall not affect
the other provisions of the Instruction and General Conditions, which will continue unaffected.

Definitions
Affiliate: means each subsidiary, associate and holding company and each subsidiary and associate of any such holding company and their
respective directors, officers, employees and agents.
Client: means the person, firm or company named in the Instruction as requiring the Services.
General Conditions: means these General Terms and Conditions of Business subject only to such amendments as may be agreed with
Jones Lang LaSalle.
Instruction: shall mean the letter of instruction between Jones Lang LaSalle and the Client as signed by both parties or as otherwise
evidenced in writing and which sets out the requirements of the Client and which shall incorporate details of the Services and the Fees,
Expenses and Disbursements, together with these General Conditions and conditions and/or documents expressly referred to in the
Instruction, all of which shall be read as one as if set out in full in it.
Schedule: shall mean, where appropriate, any description of Services, Fees, Expenses and Disbursements, whether letter, list or other
document.
Special Conditions: shall mean any conditions specifically applicable to the instruction and which, in case of conflict with the General
Conditions, shall prevail.
Services: shall mean the services to be provided by Jones Lang LaSalle as specified in the instruction or variations or amendments thereto
agreed by Jones Lang LaSalle in writing.
Agreed by Jones Lang LaSalle and consent of Jones Lang LaSalle shall mean the agreement in writing by an authorised person in Jones
Lang LaSalle (or of any successor or assign).

D-31

Jones Lang LaSalle Property Management Pte Ltd
tel +65 6220 3888 fax +65 6438 3362

Company Reg No. 198004794D Agency Licence No. L3007326E
Company Reg No. 197600508N

Your Ref : -
Our Ref : TKC:CHH:ih:130156

(the "REIT Manager")
Singapore 238867

(the "Trustee-Manager")
Singapore 238867

(in its capacity as trustee of OUE Hospitality Real Estate Investment Trust)
(the "REIT Trustee")
20 Cecil Street #28-01
Equity Plaza
Singapore 049705

June 20, 2013

Dear Sirs,

VALUATION 333A ORCHARD ROAD, MANDARIN GALLERY (THE SHOPPING
GALLERY) (COLLECTIVELY, THE PROPERTY) SINGAPORE 238897

We have been instructed by OUE Hospitality REIT Management Pte Ltd (the REIT Manager),
OUE Hospitality Trust Management Pte Ltd (the Trustee-Manager) and RBC Investor Services
Trust Singapore Limited (the REIT Trustee), to assess the Market Value of the abovementioned
Property (the Property) as at March 31, 2013. We confirm that we have inspected the Property
and conducted relevant enquiries and investigations as we considered necessary for the purposes of
providing you with our opinion of the Market Value of the Property.

Our valuation is prepared in accordance with our `General Principles Adopted in the Preparation
of Valuations and Reports', a copy of which is attached.

Our valuation of the Property is our opinion of the market value which we would define as
intended to mean "the best price at which the sale of an interest in a Property might reasonably be
expected to have been completed unconditionally for cash consideration on the date of valuation,
assuming :

(a) a willing seller;

(b) that, prior to the date of valuation, there had been a reasonable period having regard to
the nature of the property and the state of the market for the property marketing of the
interest, for the agreement of price and terms and for the completion of the sale;

(c) that the state of the market, level of values and other circumstances were, on any earlier
assumed date of exchange of contracts, the same as on the date of valuation;

(d) that no account is taken of any additional bid by a purchaser with a special interest; and

(e) that both parties to the transaction had acted knowledgeably, prudently and without
compulsion.

..../Page 2

Certificate No. SG04/00074

Certificate no. SG04/00075
Valuation (Land & Building)
D-32

tel +65 6220 3888 fax +65 6438 3362


Page 2
OUE Hospitality REIT Management Pte. Ltd. (the REIT Manager)
OUE Hospitality Trust Management Pte. Ltd. (the Trustee-Manager)
RBC Investor Services Trust Singapore Limited (the REIT Trustee)
- 333A Orchard Road, Mandarin Gallery (The Shopping Gallery)
(Collectively, The Property) Singapore 238897 June 20, 2013

Our valuation has been made on the assumption that the owner sells the Property in the market
subject to the existing leases and occupancy arrangements.

We have relied on the information provided by OUE on matters such as land area, tenure, gross
floor area, tenancy details, annual value, etc. All information provided is treated as correct and
Jones Lang LaSalle accepts no responsibility for subsequent changes in information and reserve
the right to change our opinion of value if any other information provided were to materially
change.

No allowance has been made in our valuation for any charges, mortgages or amounts owing on
the Property, nor for any expenses or taxation which may be incurred in effecting a sale. It is
assumed that the Property is free from, except the existing lease and occupancy arrangement, any
major or material encumbrances, restrictions and outgoings of an onerous nature which could
affect its value.

We have not carried out investigations on site in order to determine the suitability of ground
conditions, nor have we undertaken archaeological, ecological or environmental surveys. Our
valuation is on the basis that these aspects are satisfactory.

In arriving at our opinion of value, we have considered the prevailing market conditions,
especially those pertaining to the retail sectors of the property market. The valuation methods
adopted to arrive at our opinion of values are the Discounted Cash Flow Analysis and Direct
Capitalisation Approach.

A copy of the valuation certificate is attached.

This valuation summary is for the use of OUE Hospitality REIT Management Pte Ltd, OUE
Hospitality Trust Management Pte Ltd and RBC Investor Services Trust Singapore Limited.

In accordance with our standard practice we must state that this valuation and report is for the use
of the Client and its nominees. No responsibility or liability is accepted to any third parties and
neither the whole nor any part nor any reference thereto may be published in any document,
statement or circular nor in communication with third parties without our prior written approval
of the form and context in which it will appear.

Notwithstanding the above, in the event our consent is given and this valuation summary appears
in the Prospectus to be issued by the Manager in connection with the offering of units in the OUE
Hospitality Trust, we specifically disclaim liability to any person in the event of any omission
from or false or misleading statement included in the Prospectus, other than in respect of the
information provided within the valuation report and summary. We do not make any warranty or
representation as to the accuracy of the information in any part of the Prospectus other than as
expressly made or given in this valuation summary.

./Page 3

D-33

tel +65 6220 3888 fax +65 6438 3362


Page 3
OUE Hospitality REIT Management Pte. Ltd. (the REIT Manager)
OUE Hospitality Trust Management Pte. Ltd. (the Trustee-Manager)
RBC Investor Services Trust Singapore Limited (the REIT Trustee)
- 333A Orchard Road, Mandarin Gallery (The Shopping Gallery)
(Collectively, The Property) Singapore 238897 June 20, 2013

In the event that Jones Lang LaSalle consents to the disclosure of this valuation report in
connection with the proposed IPO, such disclosure is approved solely for the purpose of
providing information to potential investors or any other interested person. This report does not
purport to contain all the information that a potential purchaser or any other interested party may
require. It does not take into account the individual circumstances, financial situation, investment
objectives or requirements of a potential purchaser or any other person. It is intended to be used
as a guide only and does not constitute advice, including without limitation, investment, tax, legal
or any other type of advice.

The valuation stated herein is, in the opinion of Jones Lang LaSalle, the best estimates and
should not to be construed as a guarantee or prediction and the valuations are fully dependent
upon the accuracy of the assumptions made. Investors and/or potential investors should not rely
on any material contained in this report as a statement or representation of fact but should satisfy
themselves as to its correctness by such independent investigation as they or their legal or
financial advisors see fit after reviewing the valuation report to understand the particular
assumptions and methodologies made in the preparation of the valuations and to appreciate the
context in which the value is arrived at.

This report includes information provided by third parties. Figures, calculations and other
information contained in this report that has been provided to Jones Lang LaSalle by third parties
have not been independently verified by Jones Lang LaSalle and Jones Lang LaSalle takes no
responsibility for it and subsequent conclusions related to such data.
Jones Lang LaSalle / Jones Lang LaSalle Property Consultants Pte Ltd, its directors, employees,
affiliates and representatives shall not be liable (except to the extent that liability under statute or
by operation of law cannot be excluded) to any person for any loss, liability, damage or expense
arising from or connected in any way with any use of or reliance on this report.

We hereby certify that our valuers undertaking this valuation is authorized to practise as valuers
and have the necessary expertise and experience in valuing similar types of properties.

Faithfully,

_______________________
Tan Keng Chiam
B.Sc. (Est. Mgt.) MSISV
AD041-2004796D
Regional Director
JONES LANG LASALLE

Enc
D-34

TKC:CHH:ih:130156
June 20, 2013
VALUATION SUMMARY

Property : 333A Orchard Road, Mandarin Gallery
(the Shopping Gallery) (collectively, the Property)
Singapore 238897

Legal Description : Lot 1546N Town Subdivision 21

Site Area : 10,305.3 sq.m. / 110,925 sq.ft.

Tenure : 99 years lease from July 1, 1957

Property
: Mandarin Gallery comprises a 4-storey shopping podium of the 5-
storey (with 2 basements) Orchard Road wing of the Mandarin
Orchard Singapore Hotel. It is erected on an almost L-shaped plot of
land. It has 2 direct frontages at Orchard Road and Orchard Link. In
addition, it has direct access to the hotel component at 1st storey. The
Propertys major facelift was completed on December 4, 2009.

The Property has a good mix of tenants comprising 86 tenants/101
committed retail tenancies high-end fashion, lifestyle, services and
food and beverages. The food and beverages spaces are mainly located
on Level 2 to Level 4 and other retail spaces are located on Level 1 to
Level 4.

Gross Floor Area : Approximately 18,240.2 sq.m. / 196,336 sq.ft.

Lettable Area : Approximately 11,640.1 sq.m. / 125,293 sq.ft.

Annual Value
(2013)
: Approximately S$32,000,000/-

Master Plan Zoning
(2008 Edition)
: Hotel with a gross plot ratio of 4.9+

Capitalization Rate : 5.25%

Terminal Yield : 5.5%

Discount Rate : 8%

Methods of Valuation : Capitalisation Approach and Discounted Cashflow Approach

Market Value as at
March 31, 2013
: S$525,000,000/- (Singapore Dollars Five Hundred And Twenty-
Five Million)

______________________
Tan Keng Chiam
B.Sc. (Est. Mgt.) MSISV
AD041-2004796D
Regional Director
JONES LANG LASALLE
D-35

GENERAL PRINCIPLES ADOPTED IN THE PREPARATION OF VALUATIONS AND REPORTS

These are the general principles upon which our Valuations and Reports are normally prepared; they apply unless we have specifically mentioned
otherwise in the body of the report.

1) VALUATION STANDARDS
All work are carried out in accordance with the Singapore Institute of Surveyors and Valuers (SISV) Valuation Standards and Guidelines
and International Valuation Standards (IVS), subject to variations to meet local laws, customs, practices and market conditions.

2) VALUATION BASIS
Our valuations are made on the basis of Market Value, defined by the SISV as follows:

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

3) CONFIDENTIALITY
Our Valuations and Reports are confidential to the party to whom they are addressed or their other professional advisors for the specific
purpose(s) to which they refer. No responsibility is accepted to any other parties and neither the whole, nor any part, nor reference thereto
may be included in any published document, statement or circular, or published in any way, nor in any communication with third parties,
without our prior written approval of the form and context in which they will appear.

4) SOURCE OF INFORMATION
Where it is stated in the report that information has been supplied by the sources listed, this information is believed to be reliable and we
shall not be responsible for its accuracy nor make any warranty or representation of the accuracy of the information. All other information
stated without being attributed directly to another party is obtained from our searches of records, examination of documents or enquiries
with the relevant authorities.

5) DOCUMENTATION
We do not normally read leases or documents of title and, where appropriate, we recommend that lawyers advice on these aspects should
be obtained. We assume, unless informed to the contrary, that all documentation is satisfactorily drawn and that good title can be shown
and there are no encumbrances, restrictions, easements or other outgoings of an onerous nature which would have an effect on the value of
the interest under consideration.

6) TOWN PLANNING AND OTHER STATUTORY REGULATIONS
Information on Town Planning is obtained from the set of Master Plan, Development Guide Plans (DGP) and Written Statement published
by the competent authority. Unless otherwise instructed, we do not normally carry out requisitions with the various public authorities to
confirm that the property is not adversely affected by any public schemes such as road and drainage improvements. If reassurance is
required, we recommend that verification be obtained from your lawyers.

Our valuations are prepared on the basis that the premises and any improvements thereon comply with all relevant statutory regulations. It
is assumed that they have been, or will be issued with a Certificate of Statutory Completion by the competent authority.

7) TENANTS
Enquiries as to the financial standing of actual or prospective tenants are not normally made unless specifically requested. Where
properties are valued with the benefit of lettings, it is therefore assumed that the tenants are capable of meeting their obligations under the
lease and that there are no arrears of rent or undisclosed breaches of covenant.

8) STRUCTURAL SURVEYS
We have not carried out a building survey nor any testing of services, nor have we inspected those parts of the property which are
inaccessible. We cannot express an opinion about or advise upon the condition of uninspected parts and this Report should not be taken as
making any implied representation or statement about such parts. Whilst any defects or items of disrepair are noted during the course of
inspection, we are not able to give any assurance in respect of rot, termite or past infestation or other hidden defects.

9) SITE CONDITIONS
We do not normally carry out investigations on site in order to determine the suitability of the ground conditions and services for the
existing or any new development, nor have we undertaken any archaeological, ecological or environmental surveys. Unless we are
otherwise informed, our valuations are on the basis that these aspects are satisfactory and that, where development is proposed, no
extraordinary expenses or delays will be incurred during the construction period.

10) OUTSTANDING DEBTS
In the case of buildings where works are in hand or have recently been completed, we do not normally make allowance for any liability
already incurred, but not yet discharged, in respect of completed works, or obligations in favour of contractors, sub-contractors or any
members of the professional or design team.

11) INSURANCE VALUE
Our opinion of the insurance value is our assessment of the reinstatement cost for insurance purpose and it comprises the total cost of
completely rebuilding the property to be insured, together with allowances for inflation, demolition and debris removal, professional fees,
the prevailing G.S.T. (goods and services tax) and, if applicable, compliance with current regulations and by-laws.

Copyright Jones Lang LaSalle
Year 2009


6 Battery Road #32-01
Singapore 049909

T (65) 6326 1200
F (65) 6226 1606
www.cbre.com
Co. Reg. No.: 200814055H

To:
OUE Hospitality REIT Management Pte.
Ltd. (the "REIT Manager")
Singapore 238867

OUE Hospitality Trust Management
Pte. Ltd. (the "Trustee-Manager")
Singapore 238867
RBC Investor Services Trust Singapore
Limited (in its capacity as Trustee of,
OUE Hospitality Real Estate Investment
Trust)
20 Cecil Street
#28-01 Equity Plaza
Singapore 049705

11 June 2013

Dear Sirs,

1 Independent Market Research Report Introduction
Instructions 1.1
We refer to written instructions received from OUE Hospitality REIT Management Pte.
Ltd., as manager (the REIT Manager) of OUE Hospitality Real Estate Investment Trust,
and OUE Hospitality Trust Management Pte. Ltd., as trustee-manager (the Trustee-
Manager) of OUE Hospitality Business Trust and RBC Investor Services Trust
Singapore Limited, as REIT Trustee), (The Clients) to prepare an independent market
research report in relation to the following properties:
x Mandarin Orchard Singapore, 333 Orchard Road, Singapore 238867, and
x Mandarin Gallery, 333A Orchard Road, Singapore 238897
E-1
APPENDIX E
INDEPENDENT MARKET RESEARCH REPORT

Page 2
This report is provided in relation to a prospectus (Prospectus) relating to the
proposed initial public offering of stapled securities (the Stapled Securities) of OUE
Hospitality Trust (the Trust).
The instructions requested that CBRE prepare overviews for the Singapore Tourism
and Hotel and Retail markets for the purpose of inclusion in a prospectus for the
Clients proposed listing of its hotel assets by way of a stapled group structure
comprising a Real Estate Investment Trust and a Business Trust in Singapore. We
have made independent enquiries and have prepared the market overviews on the
basis of our in-house databases, and our knowledge of these markets.
Scope of Services 1.2
Our scope of work for each property included, but was not limited to, providing the
following:
Economic Overview
Regional context and background, government measures, the key drivers of economy
and contribution to GDP, economic overview, outlook for growth and inflation.
Tourism and Hospitality Market Overview
Overview of each tourism market, visitor arrival details and trends, factors driving the
tourism industry, key players and competition and key growth areas.
Hotel Market Overview
Review of each lodging market, highlighting various segments and market trends,
historical and 5 year projections for average room rate, RevPAR etc., future supply,
historical hotel transactions and key competitors and the hotel landscape including
ownership.
Retail Market Overview
Overview of the retail industry landscape, highlighting the retail sales performance
and overall competitiveness of the Singapore against global cities. Review of the
retail property market with a focus on the Orchard Road micromarket, analysing key
demand and supply factors including total stock, net absorption, future supply, rent
and retail investment sales.
Overview of Subject Properties
Benchmarking analysis of ADR, occupancy and RevPAR vs. existing market rates, a
review & SWOT of the hotel/residences and an analysis of business mix.

E-2

Page 3
Major Assumptions 1.3
Our market assessments are based upon the current market, as well as likely future
conditions as perceived by the market.
We stress that the estimation of future market conditions is a very problematic
exercise which, at best, should be regarded as an indicative assessment of
possibilities rather than absolute certainties. The process of making forward
projections and market outlook involves assumptions regarding a considerable
number of variables, which are acutely sensitive to changing conditions.
Some assumptions inevitably will not materialise and unanticipated events and
circumstances may occur. To rely upon this report therefore, readers must satisfy
themselves as to the reasoning behind these future estimates.
Information Utilised 1.4
Our market research is based on information developed from research of the
market, knowledge of the industry and certain information provided by the Client,
which is integral to the outcome of our estimations. We have also obtained data and
information for this assignment from a wide range of sources. Whilst due care has
been undertaken in the application of this information, its accuracy cannot be verified
by CBRE. Should it be revealed that any of this information is inaccurate or
misleading such that its use would affect our study, then CBRE reserves the right to
amend its opinions and report. The sources and bases of the estimates and
assumptions are stated in the body of the document. We have no responsibility to
update this summary letter for events and circumstances occurring after the date of
issuance.
Statement of Assumptions and Limiting Conditions 1.5
This market overview is prepared for The Clients in relation to the proposed listing of
hotel and retail assets by way of a stapled group structure comprising a Real Estate
Investment Trust and Business Trust in Singapore and is not to be copied or
redistributed to any other person or corporation without the prior written consent of
CBRE.
The information contained in the report has been prepared in good faith and with
due care by CBRE. Data contained in the report are based on figures provided to
CBRE. Certain monetary amounts set out in this report have been subject to rounding
adjustments. Accordingly, figures shown as totals in tables and charts may not be an
arithmetic aggregation of the figures that precede them. The outlooks contained in
the report therefore represent best estimates only and may be based on assumptions
which, while reasonable, may not be correct. Such outlooks represent only one
possible result, depending on the assumptions adopted.

E-3

Page 4
CBRE Pte. Ltd.

Mr. Robert McIntosh BSc, FRICS, FAPI
CEA Registration No.: R003904J
Executive Director, Asia Pacific CBRE Hotels
E-4
Independent Market Research Report Singapore
June 2013

Page 5 of 91

Contents

Page
1 INDEPENDENT MARKET RESEARCH REPORT INTRODUCTION ............................................. 1
Instructions 1 1.1
Scope of Services 2 1.2
Major Assumptions 3 1.3
Information Utilised 3 1.4
Statement of Assumptions and Limiting Conditions 3 1.5
2 EXECUTIVE SUMMARY ....................................................................................................... 7
3 ECONOMIC OVERVIEW..................................................................................................... 9
Overview of the International Environment 9 3.1
Key Economic Indicators and Trends in Singapore 10 3.2
3.2.1 Economic and GDP growth........................................................................ 10
3.2.2 Population and GDP per Capita ................................................................ 12
3.2.3 Foreign Direct Investment .......................................................................... 13
3.2.4 Prices and Wages ...................................................................................... 13
3.2.5 Exchange Rate Developments .................................................................... 15
Outlook 15 3.3
4 TOURISM & HOSPITALITY OVERVIEW ............................................................................... 16
Destination Marketing 16 4.1
Travel and Tourism Competitiveness 16 4.2
Visitor Arrivals and Tourism Receipts 19 4.3
International Market 23 4.4
Purpose of Visit 25 4.5
Major Events and Attractions 25 4.6
MICE in Singapore 28 4.7
Medical Tourism 31 4.8
Airport Passenger Movements 33 4.9
5 HOTEL MARKET OVERVIEW .............................................................................................. 36
Key Hospitality Players & Competitors 38 5.1
Hotel Performance 39 5.2
Market Tiers 40 5.3
Singapore Accommodation Supply and Demand 43 5.4
5.4.1 Future Hotel Supply ................................................................................... 43
5.4.2 Hotel Demand and Performance Outlook .................................................. 47
Hotel Investment Market Overview 53 5.5
5.5.1 Hotel Sales ................................................................................................ 53
5.5.2 Hotel Sales Volume ................................................................................... 54
5.5.3 Yield Profile ............................................................................................... 55
E-5
June 2013

Page 6 of 91

6 SINGAPORE RETAIL MARKET OVERVIEW ........................................................................... 56
Retail Industry Landscape 56 6.1
6.1.1 Retail Landscape Overview ........................................................................ 56
6.1.2 Singapore Retail Competitiveness .............................................................. 57
6.1.3 Retail Sales Performance ........................................................................... 60
6.1.4 Urban Infrastructure .................................................................................. 64
Retail Real Estate Market 65 6.2
6.2.1 General Overview ..................................................................................... 65
6.2.2 Retail Stock ............................................................................................... 66
6.2.3 Potential Supply ......................................................................................... 67
6.2.4 Demand ................................................................................................... 70
6.2.5 Rent .......................................................................................................... 72
6.2.6 Investment Sales Transactions .................................................................... 74
Retail Trend & Market Outlook 76 6.3
7 THE PROPERTIES .............................................................................................................. 78
Overview of Mandarin Orchard Singapore 79 7.1
7.1.1 Key Competitors ........................................................................................ 79
7.1.2 SWOT Analysis .......................................................................................... 82
7.1.3 Outlook for Mandarin Orchard ................................................................. 82
Overview of Mandarin Gallery 82 7.2
7.2.1 Tenancy Trade Mix .................................................................................... 82
7.2.2 Foot Fall, Mall Revenue and Occupancy Cost............................................. 84
7.2.3 Rents ......................................................................................................... 85
7.2.4 SWOT Analysis .......................................................................................... 85
7.2.5 Competition .............................................................................................. 87
7.2.6 Outlook for Mandarin Gallery ................................................................... 89

E-6
June 2013

Page 7 of 91

2 Executive Summary
Singapore is one of the worlds most developed countries with a high Gross Domestic Product
(GDP) per capita. Following the Global Financial Crisis (GFC), Singapore has maintained
strong economic growth and is now expected to move on to a somewhat lower growth path.
As the Singapore economy remains largely unchanged structurally and is to open to the
global market, concerns about fiscal sustainability in the Eurozone continue to cloud the near-
term horizon. The Singapore economy is expected to record 1.0% to 3.0% growth in 2013.
Singapore is the fourth largest economy within the Association of Southeast Asian Nations
(ASEAN) with a balanced mix of economic drivers. With strong manufacturing, financial
services, shipping and logistics sectors, Singapore is well positioned as an ASEAN hub and as
a strategic base for companies to expand in Asia. Singapore is also a major gateway for the
tourism industry in the Asia Pacific region.
The Singapore hotel and retail markets have a wide variety of sources of demand with the
former including business, leisure, Meetings, Incentives, Conferences, and Exhibitions (MICE)
and medical tourism. This is partly due to the strong marketing efforts made by the Singapore
Tourism Board (STB). As a result, Singapore recorded an increase in visitor arrivals of more
than 39.7% from 2007 to 2012. 2012 was a record year for the tourism and hospitality
sector in Singapore, with 14.4 million visitor arrivals, the highest number of tourists received
by the city-state in a year according to statistics from the STB. This amounted to a 9.1%
increase year-on-year.
The market faces some continued uncertainty in 2013, reflecting the outlook for the global
economy. The occupancy levels certainly support rises in room rates but the lower confidence
levels amongst hoteliers have, and will, tend to restrict these increases. However, the hotel
industry has been performing at record levels with occupancy at 86.4% in 2012, the third
highest in the period from 2005 to 2012. Room rates for 2012 were at S$261.21, up by
6.6% from the previous record year of 2011. Correspondingly, revenue per available room
(RevPAR) in 2012 was at S$225.64, 6.5% higher than 2011.
The hotel market in Singapore is characterised by the following features:
Demand growth and supply constraints have led to record occupancy levels of over
86% has substantially exceeded pre GFC levels.
There has been an average increase in supply of 8.4% annually for the last three years.
However, the development of new demand drivers, such as the Integrated Resorts (IR),
has encouraged more visitors to come to Singapore. Room supply is expected to
increase at a Compound Annual Growth Rate (CAGR) of 6.2% from the end of 2012 to
2015 which will place some pressure on occupancy rates.
Currently, the investment market for hotel property is strong. Singapore is a developed and
mature market with established regulatory structure and political stability and carries less
country risk than most other Asian markets.
E-7
June 2013

Page 8 of 91

The market is characterised by:
Singapores hospitality real estate market being tightly held and illiquid, with very few
investment opportunities each year (8 hotel sales in 2012).
Prevailing yields range between 4% and 6% with Internal Rate of Return (IRR) between 7%
and 9%.
Capital values have appreciated and yields have tightened due to the increased interest
from purchasers in this market. The lack of investment stock is a real issue and prices are
expected to rise.
The retail market is strong with a high proportion of the worlds luxury brands represented in
Singapore. The Orchard Road belt (which includes part of Scotts Road) is Singapores most
established and pre-eminent location for shopping. There has been substantial growth in
retail expenditure over the last year and occupancy in the Orchard Road precinct remains
high at above 90%.
There were not many major en-bloc retail property investment transactions over the last few
years. Transactions over the past two years indicate capitalisation rates of between 5.0% and
6.0% and we forecast rental growth of approximately 3% in the near future.

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3 Economic Overview
The purpose of the economic overview is to review available economic and demographic
data to provide the background conditions within which the subject hotel and retail properties
operate.
Overview of the International Environment 3.1
Global economic growth is likely to be tepid. In the United States, the economy has shown
signs of improvement especially in the housing and financial sectors but the fiscal tightening
coupled with tax increases and reduced spending will remain a drag on the US economy. For
the whole of 2012, the US economy grew 2.2%, compared to 1.8% in 2011.
GDP growth across Asia Pacific improved slightly in Q4 2012 to 4.3% year-on-year, up from
4.1% in Q3, primarily due to a mild revival in growth in China and reduced concerns over
the Eurozone debt crisis as well as a fiscal cliff in the United States. Merchandise export
growth staged a mild upturn during the period, mainly driven by an uptick in exports from
China and the recovery of intra-regional trade in Southeast Asia.
Business sentiment and consumer confidence also posted minor improvement towards the
end of 2012. An increase in the business sentiment could be seen from the Thomson
Reuters/INSEAD Asia Pacific Corporate Sentiment Index which rose from 62 in Q3 2012 to
63 in Q4 2012. Generally, an index reading above 50 indicates a positive outlook. However,
employers remain cautious as global economic uncertainty continues to be a major business
risk and the cost of doing business rises further. Likewise, consumer confidence as indicated
by AC Nielsen Consumer Confidence rose from 100 in Q3 2012 to 101 in Q4 2012.
Growth performance varied among individual economies. The Philippines and Thailand grew
well. Chinas GDP year-on-year growth tempered in 2012 to 7.8% from 9.3% the year
before, as did Indonesias from 6.5% to 6.2%; India slowed to 5.0%.
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Real GDP % change per annum 2011 2012
China 9.3 7.8
Philippines 3.9 6.6
Thailand 0.1 6.4
Indonesia 6.5 6.2
Malaysia 5.1 5.6
India 7.5 5.0
Vietnam 6.0 5.0
Asia Pacific 4.2 4.4
Australia 2.4 3.6
World 2.9 2.3
South Korea 3.7 2.0
Japan -0.5 2.0
Hong Kong 4.9 1.4
Singapore 5.2 1.3
Taiwan 4.1 1.3
Source: Oxford Economics

Despite relatively better performance towards the end of the year, the economic situation in
the United States and Eurozone will continue to weigh on sentiment and dampen prospects of
a significant upturn. Most Asia Pacific markets look set to face another challenging year,
although Southeast Asia should perform comparatively better because of strong domestic
consumption and foreign investment. Growth in China is expected to be moderate with a
GDP growth rate to be set at 7.5%, a level where the government attempts to strike a balance
between maintaining economic growth and keeping the residential property market and
inflation in check.
Key Economic Indicators and Trends in Singapore 3.2
3.2.1 Economic and GDP growth
Being an open and trade-oriented market, Singapores economy was badly hit by the global
financial crisis (GFC). As a result, Singapores economic growth was adversely affected with a
0.8% contraction in real GDP in 2009. Fortunately, Singapore recovered quickly from the
GFC on the back of the restoration of economic stability through fine tuning fiscal policies.
Also, the relatively strong growth from China boosted export growth which enabled
Singapore to rebound from the economic slowdown in 2009 with a growth rate of 14.8% in
real GDP in 2010. Between 2007 and 2011, Singapore experienced a CAGR of 5.1% in real
GDP growth.

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-5%
0%
5%
10%
15%
20%
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Singapore Real GDP in Local Currency
GDP Forecasts Change
millions change

The Ministry of Trade and Investment (MTI) reported that Singapores economy grew 1.3% in
real GDP terms in 2012, moderating from the 5.2% growth in 2011. This decline was
primarily attributed to a weakness in externally-oriented sectors such as Manufacturing and
Wholesale & Retail trade.
The Manufacturing sector was the primary drag to the lacklustre economic performance as it
grew at 0.1% as compared to the 7.8% growth in 2011. The Services Producing industries
posted growth, but at a considerably slower pace of 1.2%, 3.4 percentage points lower than
in 2011. The poor performance was mainly due to the decelerating activity in Wholesale &
Retail trade which contracted by 0.7%.
Growth in the Accommodation & Food Services industry slowed to 2.8% compared to 8.2% in
preceding year. In contrast, on the back of the recovery in private sector building activities,
the Construction sector grew by 8.2% year-on-year and 15.1% quarter-on-quarter. For the
whole of 2012, Singapores economy was primarily supported by expansions in the Finance
& Insurance sector, Business Services sector as well as other Services industries.
The government has recently released the GDP performance in first quarter 2013 and
reported that the Singapore economy expanded by 1.8% on a quarter-on-quarter seasonally-
adjusted annualised basis. The good performance was primarily attributable to the strong
gains in the financial sector. According to MTI, the finance & insurance sector surged by an
annualised rate of 50.6% on a quarter-on-quarter basis as underpinned by the stimulus
programs which created significant investment demand for emerging-market investment
assets. In contrast, manufacturing sector remained as the primary drag for Singapore
economic growth, contracting by an annualised rate of 12.3% quarter-on-quarter, reflecting a
contraction in the output of the biomedical manufacturing and transport engineering clusters.
In terms of the Accommodation & Food Services sector, the industry grew by an annualised
rate of 6.2% quarter-on-quarter compared to 2.8% in preceding quarter.

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3.2.2 Population and GDP per Capita
Based on the data provided by the Singapore Department of Statistics (Singstat) between
2007 and 2012, the population grew by 15.8%, representing a CAGR of 3.0%. Within this
period the population increased the most in 2008, with a growth rate of 5.5%. In February
2013, the Singapore Government issued a white paper outlining a plan to increase the
population from the current figures of 5.3 million to 6.9 million by 2030 in an effort to solve
the issue of slowing population growth.
The population is made up of a mix of Citizens, Permanent Residents and Non-Residents, the
latter comprising close to 28% of the total.
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
2007 2008 2009 2010 2011 2012
Population ('000s)
Singapore Citizens Singapore Permanent Residents Non-Residents
Source: Singstat

In terms of GDP per capita (as expressed in US dollars), Singapore is ranked as one of the
most affluent countries in the world with a GDP per capita of US$ 52,065 in 2012, up by
1.6% over 2011. Meanwhile, GDP per capita for China and Indonesia was US$ 6,003 and
US$ 3,688 with a year-on-year growth rate of 11.6% and 2.7% respectively.
-10%
-5%
0%
5%
10%
15%
20%
25%
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GDP per capita, nominal, US$
Singapore Forecasts Change
y-o-y change
US$

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3.2.3 Foreign Direct Investment
Singapore is well structured to ensure political and economic stability. The government has
made concerted efforts in creating a very favourable environment for foreign companies by
offering very generous fiscal incentives such as low corporate tax rates, a skilled workforce,
extensive infrastructure, a strong technology base, etc. This positioning has helped the country
to achieve stable and sustainable growth in Foreign Direct Investment (FDI) over the past
decade. In times of global economic slowdown, more foreign direct investments are attracted
to Asia, especially to Singapore. According to Oxford Economics, in 2010 Singapore received
FDI of US$ 28,466 million, an increase of 183.0% over 2007, before the GFC. Since then,
the volume of investment has been growing with FDI reaching US$ 33,589 million in 2012.
Between 2007 and 2012, it enjoyed a CAGR of 27.3%.
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Singapore FDI (Millions)
US$

Based on The United Nations Conference on Trade and Developments (UNCTAD) FDI
Attraction index which measures a countrys success in attracting FDI over a rolling three year
period, Singapore continues to be one of the top performers and ranked 3
rd
in 2011 from 4
th

place in 2010, reflecting the improvement in the attractiveness of its investment climate over
the period. Moreover, Singapore has once again been awarded the Worlds Easiest Place
for Doing Business according to the World Bank Report Doing Business 2012. This is the
6
th
time in a row that Singapore has maintained its top position in the index.
By means of favourable policies to establish a business friendly regime, a large number of
international Multi-National-Corporations (MNCs) are attracted to Singapore to set up their
regional headquarters. UNCTAD reported that the number of MNCs has doubled to 14,000
over the 8 year period from 2002 to 2010.
3.2.4 Prices and Wages
According to the Monetary Authority of Singapore (MAS), following the turnaround in the
domestic economy and the resultant rise in resource utilisation, cost and price stresses have
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emerged. Headline inflation in Singapore caused some concern when the inflation rate rose
to 5% for the 1st half of 2012. However, inflationary pressure eased slightly towards the end
of 2012 and Singapores inflation for 2012 was at 4.5%.
The high inflation in 2012 was mainly due to higher accommodation costs and transportation
costs. According to the Ministry of Trade and Investment (MTI), housing costs and transport
costs rose by 7.8% and 7.1% respectively. In addition, given stricter foreign labour policy
which imposed quotas and levies on firms hiring overseas workers, service related items are
likely to encounter higher CPI inflation. It has been reported that nominal wage in 2012 rose
by 0.4%.
Headline inflation is expected to remain elevated in the short term due to increasing imputed
rentals on owner-occupied accommodation and motor vehicle prices, while imported inflation
is expected to be moderated in light of the prolonged weakness of global markets.
0%
1%
2%
3%
4%
5%
6%
7%
90
100
110
120
130
140
150
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Inflation
CPI Forecast Annual Increase
CPI change

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3.2.5 Exchange Rate Developments
80
85
90
95
100
105
110
115
120
125
130
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Exchange Rate
US Dollars Renmibi Indonesian Rupiah Source: Oxford Economics
Index

The strengthening of the Singapore Dollar in recent years was mainly because of the
following: 1) The demand from the investors seeking higher yield amidst stronger growth
prospects in Singapore resulting in more money being injected into the country for the past
few years, 2) Singapore implemented a tighter monetary policy in 2010 by establishing a
gradual and modest appreciation path for the trade-weighted Singapore dollar policy band
to fight inflation and achieve sustainable growth simultaneously. The MAS has further
tightened monetary policy in April 2012 to reduce high inflationary pressures.
Against this backdrop, the Singapore Dollar strengthened 0.7% year-on-year in 2012 against
the US Dollar and 7.7% against the Indonesian Rupiah. In contrast, the Singapore dollar
weakened by -1.7% against the Chinese Renminbi.
Outlook 3.3
The global economic outlook remains somewhat uncertain due to the fear of the potential
worsening of the debt crisis in the Eurozone. However the outlook in the United States has
improved, mainly due to cost reductions, particularly labour. There is some slowing of growth
in China but this is still at high levels compared to other developed economies. We consider
that the Asian economies will continue to improve on the back of resilient domestic demand
and modest growth in external demand. Likewise, the Singapore economy will remain
cautiously positive although it has shown signs of easing in the first quarter. According to MTI,
the GDP growth is likely to be maintained between 1.0% to 3.0% in 2013.

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4 Tourism & Hospitality Overview
This section reviews the Singaporean tourism industry, examining the recent performance of
the sector.
Destination Marketing 4.1
The Uniquely Singapore brand was launched in March 2004 and had been used to raise
the profile of Singapore as a business and leisure destination. Uniquely Singapore was used
to highlight Singapore as a city that represents a unique, sophisticated mix of traditions and
modernity, which is rich in colour and contrast, as well as a harmonious blend of culture,
cuisine, arts and architecture.
A new brand, YourSingapore, was introduced last year. The Singapore Tourism Board (STB)
describes this as characterising the unique truth of Singapore that its concentration of
offerings is so easily accessible and user-friendly, empowering travellers to easily personalise
their own Singapore experience according to what they like, how and when they like it.
Travel and Tourism Competitiveness 4.2
According to the World Economic Forums Travel & Tourism Competitiveness Report 2013,
Singapore maintained its competitiveness in Travel & Tourism for six years and remained in
first place in Asia in developing the travel and tourism industry or 10th globally (out of 139
countries), measured for the attractiveness of their environment.
Singapore continued to dominate the top spot for its policy environment, reflecting favourable
rules and regulations that are highly conducive for the development of its travel and tourism
industry. Such policies include those that facilitate foreign ownership and Foreign Direct
Investment, well-protected property rights, few visa restrictions and transparency of policy
making. Singapore has also done well in areas like human resources by scoring high in the
quality of its education system, extent of staff training, ease of hiring foreign labour, as well
as its hiring and firing practices. Further, Singapore benefits from an excellent transport
infrastructure with high quality roads, port infrastructure and ground transport network.
Tourism demand, tourist arrivals and hotel demand in Asia Pacific continued to outperform
with much of the growth driven by intra-regional travel. Singapore remains a popular holiday
destination. Based on the preliminary results published by Pacific Asia Travel Association
(PATA), international tourist arrivals to Asia Pacific increased by more than 5% or 18 million
international tourist arrivals in 2012, reaching over 350 million in what was a record year for
Asia Pacific tourism. Within the region, the Southeast Asian submarket continued to maintain
the lead with a 9.9% increase, with most of the ASEAN regions marking new highs in terms of
international arrivals. Myanmar posted a spectacular growth of 52%, surpassing a million
arrivals for the first time. Healthy gains were reported in Singapore (+9%) and Indonesia
(+8%) while Malaysia lagged behind with a marginal improvement of 1%.
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International visitor arrivals to Northeast Asia posted a growth rate of 4% in 2012. Japan
made a strong recovery from the disaster-hit year of 2011, posting a 35% gain in visitor
arrivals from 6.22 million to 8.37 million in 2012. Visitor arrivals in South Korea reached
11.1 million, about 13.4% higher year-on-year, thanks to Chinese and Japanese visitors.
Visitors to China fell 2.2% to 132.41 million, including 57.72 million overnight visitors.
However, international arrivals to China excluding Hong Kong, Macau and Taiwan actually
increased by 1.6%.
-
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
International Overnight Visitor Arrivals to Asian Countries for 2012
Source: Various Tourism Boards

With regard to the hotel performance of the region, based on the latest data provided by
Smith Travel Research (STR), occupancy in the region rose by 0.5% to 68.3% in 2012.
Occupancy improvements were seen in Tokyo (+12.3%), Bangkok (11.2%), Shanghai
(+6.1%), Beijing (+1.8%), Kuala Lumpur (+2.4%), Hong Kong (+0.7%) and Jakarta
(+0.4%). Tokyo and Bangkok recovered from the natural crisis experienced in the previous
year. Markets like Tokyo, Singapore, Hong Kong and Seoul have been operating at above
80% occupancy, nearing full capacity. On the other hand, markets like Bali (-2.9%) and Ho
Chi Minh City (-4.2%) experienced declines in occupancy rates, arising from the influx of a
large supply of hotels in the last few years.

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-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Occupancy by Country
2012 Change from 2011
Source: STR Global
Occupancy Change

In 2012, the three markets that saw the largest year-on-year growth in ADR in US$-
denominated terms were Taipei (+15.8% to US$196.76), Jakarta ( +9.0% to US$100.85),
and Tokyo (+6.2% to US$185.39). Other markets like Beijing, Seoul, Singapore and
Bangkok also posted positive increases while Shanghai, Kuala Lumpur, Bali, Hong Kong saw
declines. Among these, Shanghai posted the largest decline of 4.5% to US$115.81 due to the
supply overhang.
-10%
-5%
0%
5%
10%
15%
20%
$0
$50
$100
$150
$200
$250
$300
ADR by Country in (US$)
2012 Change from 2011 Source:STR Global
Change
US$

As a result of given occupancy levels and ADRs, the top three markets that experienced the
largest RevPAR growth in 2012 were Tokyo, Taipei and Bangkok, indicative of strong growth
in the respective economies and in visitor arrivals.
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-10%
-5%
0%
5%
10%
15%
20%
25%
$0
$50
$100
$150
$200
$250
RevPAR by Country in (US$)
2012 Change from 2011
Source:STR Global
Change
US$

Visitor Arrivals and Tourism Receipts 4.3
Between 2007 and 2012, Singapore experienced a 39.7% increase in tourist arrivals and a
62.9% growth in tourism receipts. In 2007, tourist arrivals reached 10.3 million, breaching
the 10.0 million mark. Amid the global economic downturn, tourist arrival figures dropped
slightly to 10.1 million and 9.7 million in 2008 and 2009 respectively. Growth was strong but
it started to slow down in late 2010 as shown on the graph. Nevertheless, the growth was still
over 20%.
2011 was another record year as visitor arrivals reached 13.2 million, 13.2% more than in
2010 while visitor arrivals growth moderated in 2012 with 14.4 million visitor arrivals in
Singapore, a 9.1% increase year-on-year. In part, the strong tourism performance was due
to the introduction of major tourist draws such as the Integrated Resorts, Universal Studios,
the Formula One race and MICE events. In our opinion, the Singapore tourism sector will
continue to perform well with the recent openings of new attractions like River Safari, Gardens
by the Bay and Marine Life Park.
According to STB, Singapore Annual Visitor Arrivals refers to all the visitors who go through
immigration clearance regardless of their length of stay and it excludes all Malaysian citizens
arriving by land, returning Singapore citizens residing abroad, non-resident air and sea crew
(except for sea crew flying in to join a ship), and air transit and transfer passengers.
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7.6
6.1
8.3
8.9
9.8
10.3 10.1
9.7
11.6
13.2
14.4
15.2
16.0
16.8
17.6
18.3
-20%
-10%
0%
10%
20%
30%
40%
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
M
i
l
l
i
o
n
s
Singapore Visitor Arrivals
Vi si tor Arri vals Vi si tor Arri vals Forecast
STB Forecasts Change in Visitor Arrivals
Source: STB,CBRE Hotels
Change

According to the STB, Singapore is expecting to attract between 14.8 and 15.5 million visitors
in 2013 (the graph shows the median point) , implying a range of a 3.0% to 7.9% increase
from 2012. For the first quarter of 2013, visitor arrivals reached 3.8 million, registering a
growth rate of 6.4% year-on-year over the same period. STB also estimated that the visitor
arrivals will reach 17 million by the end of 2015. This is equivalent to a CAGR of 5.8% over
the period from 2012 to 2015.
CBRE estimates are aligned with STB estimates and we project that in 2013, Singapore will
welcome a total number of 15.2 million visitor arrivals, representing a 6.0% growth over
2012. In the next 3 years, we expect that visitor arrivals will grow at 5% per year and by the
end of 2016, the number of visitor arrivals is expected to reach 17.6 million. We have
reduced our growth rate estimates for 2017 to 4% and as a result, visitor arrivals will reach
18.3 million by end of 2017.
We have reviwed the seasonal nature of the tourism industry and have identified both peak
and low periods. In general, a peak period for tourism sector falls during June and August. A
surge in tourist arrivals during this period can be due to reasons such as the following. 1)
Great Singapore Sale, 2) Influx of Australian travellers due to the winter season and 3)
Summer holidays in Europe and the United States. Another peak season is from late
November to December where many tourists spend their Christmas holidays in Singapore. In
contrast, periods from January to February, April to May and September to mid-November
are relatively quiet for the tourism sector.
The number of visitor arrivals for 2012 surpassed the 2011 level for every month but the
growth of visitor arrivals on a month-on-month basis varied.
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800,000
900,000
1,000,000
1,100,000
1,200,000
1,300,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Seasonality
2010 2011 2012
Source: STB
Visitors per month

According to the STB, 22.0% of visitors arriving in Singapore in 2011 stayed less than a day
in the city, and in particular, 74.5% stayed less than the average 3.7 days recorded in 2011.
This breakdown outlines the fact that Singapore still has significant potential to encourage
visitors to extend their stay in the country.
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
2007 2008 2009 2010 2011
Breakdown of Length of Stay
Under 1 day 1-3 days 4-7 days 1- 4 weeks More than 1 month
Source: STB
Visitor Days

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Under 1 day
22%
1-3 days
53%
4-7 days
17%
1- 4 weeks
7%
More than 1 month
1%
Breakdown of length of stay in 2011
Source: STB

In tandem with the rise in visitors, Tourism Receipts (TRs) increased tremendously over the
past 5 years from 2007 and 2012, recording an increase of 62.9%. In 2012, TRs registered a
record level of S$23.0 billion, 3.2% more than the previous year. According to STB, TRs are
mainly generated by 5 components which are shopping, accommodation, F&B, Sightseeing &
Entertainment (including Gaming) and other TR Components which includes expenditure on
airfares, port taxes, local transportation, business, medical, education and transit visitors.
Sightseeing & Entertainment accounted for the biggest share of tourism receipts (22.4%) in
2012, followed by Accommodation (21.8%) and shopping (20.7%). TRs from Accommodation
registered the highest growth of 14.2% whereas TRs from Sightseeing and Entertainment
components experienced -4.3% TR change over 2011.
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Tourism Receipts
Source:STB
CAGR= 10.0%
SG$ (Millions)

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0 500 1,000 1,500 2,000 2,500
Indonesia
PR China
India
Australia
Japan
Malaysia
Philippines
USA
Thailand
Vietnam
TOP 10 Markets TRs - YTD Sep 2012
Shopping Accommodation Food & Beverage Other TR Component
Source:STB
S$ (Millions)

According to STB, for the period ending September 2012, Tourism Receipts (TRs) by country
generated by Indonesian tourists were the largest S$ 2,298 million, accounting for 17.7% of
the total. The breakdown of Indonesian expenditure shows that of the TRs that were
generated 31% were from shopping and 19% were from accommodation. China market
ranked 2
nd
and produced a total TRs amount of S$ 1,860 million for the period ending
September 2012.
STB has previously stated a tourist visitor arrival goal of 17 million and a tripling of TR to
S$30 billion by 2015.
International Market 4.4
Over the past decade, approximately three quarters of the visitor arrivals were from the Asia
Pacific region, indicating that Singapore remains an attractive destination for travellers in the
region where economic growth remains positive, with limited exposure to the US and Europe
tourist markets.
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
2007 2008 2009 2010 2011
Singapore Visitor Arrivals by region
Americas Asia Europe Oceania Africa Others
Source: STB

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For the nine months ending September 2012, Indonesia (2,085,171), P R China (1,515,238),
Malaysia (877,792), Australia (763,016) and India (669,570) were Singapores top five
visitor-generating markets. Those markets accounted for over 55.1% of total visitor arrivals. In
terms of the composition of the origin of visitor, there are minimal differences between 2011
and 2012.
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
2007 2008 2009 2010 2011 2011 YTD Sep 2012 YTD Sep
Singapore Visitor Arrivals by Country of Residence
Indonesia PR China India Malaysia
Australia Japan Philippines South Korea
Hong Kong US Other
Source: STB

-15%
-5%
5%
15%
25%
35%
Indonesia PR China India Malaysia Australia
Visitor Arrival Growth - Top 5 Markets
2008 2009 2010 2011 2012 YTD Sep Source: STB

Amongst several of the top 10 markets there was significant growth in 2012 over 2011, in
countries such as P R China (23.2%), Japan (16.8%), South Korea (8.4%), Indonesia (8.3%)
and Malaysia (7.5%). On the other hand, visitor arrivals from countries like Philippines and
Hong Kong SAR declined by 3.5 and 3.0% respectively.

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Purpose of Visit 4.5
The latest data available from STB were from 2011. The major reasons for international
visitors to travel to Singapore for 2011 were:
2011 ( %)
Holiday 38
Business 22
Visiting Friends/Relatives 14
MICE 2
Education 1
Others 12

In order to keep up its competitiveness as a preferred tourist destination, the Singapore
government has been actively diversifying its offering in terms of cultural and business events,
attractions, medical facilities, gaming facilities, shopping and exhibitions. Given the rise of
total visitor arrivals in 2011 over 2010, visitor arrivals to Singapore for Holiday purpose
posted the largest growth of 22.8%, compared to 16.9% in 2010 whereas visitor arrivals for
Business purpose declined by 0.4%.
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
2007 2008 2009 2010 2011
International Visitor Arrivals by Purpose of Visit
Holiday Business
Visiting Friends/Relatives MICE
Education Others
Source: STB

In 2012, Singapore's tourism industry would receive S$905 million more in funds over the
next five years to spur its growth, of which about one-third will be set aside to develop lifestyle
events and the MICE sector through the Tourism Events Development Scheme. Another one-
third of the funds will be channelled to develop new tourism products and concepts. The rest
of the funds will be used primarily for improving capabilities in tourism-related businesses.
Major Events and Attractions 4.6
The success of inaugural milestone events such as the Singapore Airshow (2008), Singapore
International Water Week, the Summer Youth Olympic Games in 2010 and the Formula One
Singapore Grand Prix in the last five years truly marked a turning point for Singapore as a
tourist destination. It has been reported that approximately 40% of the F1 spectators were
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tourists. For the past four races from 2007 to 2011, it had attracted more than 160,000
international visitors and contributed more than S$560 million in tourism receipts. Due to the
success of the Formula One event, it will remain on the F1 calendar till at least 2017.
Moreover, annual signature events, such as the Great Singapore Sale, Christmas in the
Tropics and ZoukOut, as well as over 6,000 business events, including Biomedical Asia and
ITB Asia, also added to the years success in showcasing the Singapore brand as one that
continues to attract a strong showing of both international and regional visitors. In 2012,
Singapore held events like Restaurant Week, World Gourmet Summit, Digital matters and
Sitex.
2013 will continue to be another exciting year for the tourism industry with a number of
major events including the existing ones like the Formula One Singapore Grand Prix, the
Singapore Biennale, the Singapore Food Festival and inaugural events like the inaugural Art
Week in Jan 2013.
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Following table displays some examples of upcoming events in 2013.
No. Ev ents Loc ati on Date
1 Up and up: A Forum on Community Care Grand Copthorne Waterfront Hotel Singapore Q1 2013
2 Low Cost Airlines World Asia 2013 To be confirmed Q1 2013
3 Unleashing Innovation: Creating Value in a Global Market Capella Singapore Q1 2013
4 Asia Refining Congress 2013 Harbourfront Tower Q1 2013
5 RehabTech Asia Singapore Expo Q1 2013
6 LNG Global Congress Pacific 2013 Singapore Marriott Hotel Q1 2013
7 Private Banking Aisa 2013 Marina Bay Sands, Singapore Q1 2013
8 Biopharma Asia Convention 2013 Marina Bay Sands, Singapore Q1 2013
9 TYREXPO ASIA 2013 Singapore Expo Q1 2013
10 Journey-World Tour Singapore Indoor Stadium Q1-2013
11 KidsFest 2013 DBS Art Centre Q1-2013
12 Mosaic Music Festival Esplanade Q1-2013
13 HSBC Women's Champion 2013 Sentosa Golf Club Q1-2013
14 Art Stage Singapore Sands Expo and Convention Centre Q1-2013
15 Fashion Extravaganza on a Great Street Orchard Road Q1-Q2-2013
16 Globale Security Asia Suntec Convention Centre Q2 2013
17 MTA Singapore Expo Q2 2013
18 Power & Electricity World Asia 2013 Marina Bay Sands Expo & Convention Centre Q2 2013
19 Utility Revenue & Customer Management World Asia Harbourfront Tower Q2 2013
20 Clean Technology Investment World Asia Marina Bay Sands Expo & Convention Centre Q2 2013
21 Crowdsourcing Week 2013 Singapore Expo Q2 2013
22 Boat Asia 2013 Marina at Keppel Bay Q2 2013
23 Middle School Mini Conference 2013 UWCSEA East Campus Conference Centre Q2 2013
24 66th CFA Institute Annual Conference Suntec Convention Centre Q2 2013
25 RRFID World Asia 2013 Suntec Convention Centre Q2 2013
26 Retail World Aisa 2013 Suntec Convention Centre Q2 2013
27 Centre for English Langague Communication Symposium 2013 National University of Singapore Q2 2013
28 Sea Asia Marina Bay Sands Expo & Convention Centre Q2 2013
29 Smart Electricity World Asia 2013 Marina Bay Sands Expo & Convention Centre Q2 2013
30 The Solar Show Asia 2013 Marina Bay Sands Expo & Convention Centre Q2 2013
31 Asia Business Journal Trade Expo 2013 Singapore Expo Q2 2013
32 Global Internship Conference Grand Copthorne Waterfront Hotel Q2 2013
33 The Art of the Brick Art Science Museum Q2-2013
34 BayBeats Esplanade Q2-2013
35 Global Security Asia Sands Expo and Convention Centre Q2-2013
36 International Conference on Materials for Advanced Technologies Suntec Convention Centre Q3 2013
37 26th APACRS ANNUAL MEETING SINGAPORE 2013 Suntec Convention Centre Q3 2013
38 Singapore International Transport Congress and Exhibition(SITCE) Suntec Convention Centre Q4 2013
39 The International Conference On Biomedical Engineering(ICBME) To be confirmaed Q4 2013
Major Events in Singapore in 2013

Recently completed and upcoming attractions are definitely factors that support the strong
increase in visitor arrivals, anchoring Singapore as a regional holiday destination. New major
attractions which opened in 2012 like Gardens by the Bay, Marine Life Park, etc. coupled with
the River Safari slated to open in 2013, will further boost Singapores tourism in 2013. Future
developments include Singapore Sports Hub, Jurong Lake District and National Art Gallery
which are expected to be opened in 2014.
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Attr action Location
Estimated
Completion
Amount Invested
Gardens by the Bay Bay Central 2012 S$795m
Marine Life Park RWS 2012 S$6.59b*
Adventure Cove RWS 2012 S$6.59b*
River Safari Singapore Zoo 2013 S$180m
Singapore Sports Hub Kallang 2014 S$1.87b
Jurong Lake District Jurong 2014 N/K
National Art Gallery Old Parliament Kallang 2014 S$532m
* estimated for whole of RWS

Based on latest available data provided by STB, Orchard Road is the most popular free-
access attraction for visitors with 45% of the total visitors to Singapore visiting Orchard Road
in 2011. In terms of paid access attractions, Sentosa ranks first followed by the Integrated
Resorts.
MICE in Singapore 4.7
According to the International Congress and Convention Association (ICCA), MICE is the
acronym for Meeting, Incentive, Conference, Exhibition. Meeting: a general term indicating
the coming together of a number of people in one place, to confer or carry out a particular
activity. Incentive: a networking event as part of a programme which is offered to its
participants to reward a previous performance. Conference: a participatory meeting designed
for discussion, fact-finding, problem solving and consultation and lastly, Exhibition: events at
which products and services are displayed.
Singapore, being a city-state with a strategic location and easy access to key Asian markets,
has become a truly premier convention destination in the world and this is reflected by the
accolades received in recent years including: Asias Top Convention City for the 11th time
(ICCA Global Rankings 2012), Top International Meeting City for the fourth consecutive year,
Asias Top Country and City for Meetings for 28 consecutive years (Union of International
Associations 2011). Based on the latest available data provided by ICCA, Singapore held a
record 150 ICCA events in 2012. This is 5.6% more than in 2011. As a result, Singapore
alongside London ranked 6
th
among the top 10 convention cities in the world in terms of
number of meetings held and maintained its top position in Asia for the 11
th
consecutive year.
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195
181
172
164
154
150 150
137
128
122
0
50
100
150
200
250
No of meetings in 2012
No of meetings in 2012
Source: ICCA

According to STB, Singapore welcomed 2.5 million business travellers for the nine months
ending September 2012, which accounted for 23.3% of total visitor arrivals, an increase of
6.0% over the same period during 2011. Business tourists (including those attending MICE)
have grown by 3.5% per annum between 2008 and 2011. From January to September 2012,
business visitors contributed S$4.3 billion in tourism receipts, up by 7.0%. The opening of the
two Integrated Resorts has reinforced Singapores position as a leading MICE destination in
Asia in terms of venue supply. Currently, there are six existing convention and exhibition
venues in the market, namely Marina Bay Sands (MBS), Resorts World Sentosa (RWS), Raffles
City Convention Centre, Changi Exhibition Centre, Singapore Expo and Suntec Singapore
International Convention and Exhibition Centre. Singapore offers first class infrastructure,
excellent transportation access and a central location in Southeast Asia, compared to other
Asian convention cities such as Tokyo and Seoul.

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The MICE business in Singapore has been rising year-on-year, owing to the initiatives by the
government in strengthening Singapores position as a leading MICE hub. It is estimated that
close to 6,000 business events are held in Singapore each year. According to STB, the
countrys MICE industry continued on this high note in 2012 where it witnessed a total
number of 18 world congress events. Some of them are first-in-Asia or Singapore events such
as the Young Presidents Organisation Global Leadership Conference 2012, NAAMBA
Global MBA Conference 2012 and International Association of Gaming Regulators
Conference 2012. In 2013, meetings secured include the 52nd ACI World Congress, the
World Federation of Engineering Organisations Congress 2013, the 79th World Library &
Information Congress 2013 and the International Philosophy and Literature Conference
2013. Furthermore, meetings like the 36th World Diamond Congress would take place in
2013 and the International Congress of the World Confederation for Physical Therapy in
2015.
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Ev ents Loc ati on Date
52nd ACI World Congress The Sands Expo and Convention Centre, Marina Bay Sands 2013
World Federation of Engineering Organisations Congress 2013
Tyrexpo Asia Singapore Expo Convention and Exhibition Centre 2013
The Congress IFLA WLIC 2013 2013
FIATA World Congress Suntec Singapore 2013
The XXII International Pigment Cell Conference(IPCC) Singapore 2014
UIA World Congress
Marina Bay Sands,Suntec Singapore International Convention
and Exhibition Centre
2014
The 36th World Diamond Congress 2013
International Congress of the World Confederation for Physical Therapy 2015
WSA World Congress Singapore 2015
The 5th Structural Engineers World Congress(SEWC) Singapore 2015
Asia Masters Athletics Championships. Singapore Sports Hub 2016
Selected major MICE events in Singapore from 2013 to 2016

Medical Tourism 4.8
Singapore is one of the leading medical tourism destinations in Southeast Asia for complex
treatment in the field of cardiology, ophthalmology, oncology, neurological surgery and
organ transplant.
Due to its reputation of having high quality of health care and state-of-the-art infrastructure,
many foreign patients travel to Singapore to seek medical treatment. Most of those tourists
come from countries such as Indonesia as well as from South Asia, and the Middle East. Even
patients from as far as the US and UK have sought healthcare services in Singapore as
quality healthcare services are relatively affordable.
In order to transform Singapore into a leading medical hub, the government has been
implementing a range of initiatives in supporting the growing healthcare demand. In 2003,
the Singapore government launched SingaporeMedicine, a multi-agency government-industry
partnership led by Economic Development Board (EDB), International Enterprise (IE) and STB.
The purpose of SingaporeMedicine is to strengthen Singapores position as Asias Healthcare
Hub and promote Singapore as an outstanding destination for advanced patient care.
According to EnterpriseOne, Infocomm Development Authority of Singapore (IDA) together
with other partners invested more than S$18 million in developing innovative healthcare
technologies. The Singapore government has also committed S$4 billion over the next few
years to build healthcare infrastructure in terms of more hospital beds, clinics and etc. In
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order to grow a well-trained workforce for the sector, a fund of S$299 million was established
in 2009 to train and recruit healthcare workers. All these initiatives will benefit the medical
sector.
348,000
370,000
342,000
399,000
461,000
533,000
604,000
681,000
761,000
851,000
-10%
-5%
0%
5%
10%
15%
20%
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Foreign Patients to Singapore
Foreign Patients to Singapore Annual Change
Source:STB, Frost & Sullivan

Research by Frost & Sullivan shows that since 2010, the number of foreign patients grew
more than 15% per annum and in 2012, the growth of medical tourists to Singapore was
16%. 761,000 medical tourists are expected to visit Singapore by 2015 representing a CAGR
of 13.8% from 2010. It has been reported that Indonesia, Malaysia, and Bangladesh, being
the 3 largest source markets, accounted for more than 40%, 10% and 5% of total foreign
patients respectively. Nonetheless, the growth rate is still above 10%. The current projections
represent a CAGR of 12.4% over a 4 year period from 2012 to 2016.

1,283
1,165
777
856
980
1,218
1,406
1,608
1,807
2,030
-40%
-30%
-20%
-10%
0%
10%
20%
30%
0
500
1,000
1,500
2,000
2,500
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
TR generated by Medical Tourism
TR generated by Medical Tourism Annual Change
Source:STB, Frost & Sullivan
S$ million

Tourism receipts from medical purposes fell for 2 years consecutively with a decrease of 9.2%
and 33.3% in 2008 and 2009 respectively. In 2011, some 461,000 foreign patients
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contributed S$980 million worth of revenue from medical tourism. Frost & Sullivan projected
by end of 2016, the total tourism receipts from medical component will reach S$2,030
million, representing a CAGR of 13.0% from 2013 to 2016.
Singapore offers a wide spectrum of internationally accredited healthcare services covering
every major field of medicine. In order to implement an appropriate supply of high quality
medical facilities, the Singapore government will build two new public hospitals. According to
the Healthcare 2020 Masterplan, an additional 1,900 acute hospital beds and 1,800
community hospitals beds will be added to the market by 2020. Despite the growing numbers
of public hospitals in the future, majority of the foreign patients will still choose private
hospitals over public hospitals due to longer waiting times and higher occupancy rates
encountered by these foreign patients at major public hospitals in Singapore. With regards to
private hospitals, Parkway Pantai Limited is the largest private hospital group with three
brands such as East Shore, Gleneagles and Mount Elizabeth under the group. Based on our
research, the Parkway Group has a total of 1,075 licensed private hospital beds and this
accounted for 51.39% of total licensed private hospital beds in Singapore.
Orchard Road, apart from being a prime shopping location, has gradually become the
medical centre of choice especially for private patients. Currently, there are around 5 medical
providers that operate in the Orchard area including Orchard Medical Specialist Centre at
Lucky Plaza, Gleneagles near Tanglin Shopping Mall, Paragon Medical in Paragon,
Healthway Screening & Wellness Centre at Somerset and Camden Medical Centre in
Orchard Boulevard. For that reason, Orchard Road has the most number of specialists.
According to Frost & Sullivan, Orchard Road accounted for the greatest share of 35.0% to
40% of total specialists of 1,314 in 2010. A good share of 25% to 30% was based in the
Tanglin cluster, in close proximity to Orchard Road, and the rest of the specialists were mainly
situated in the Novena cluster.
Singapore is ranked 4
th
out of 55 on Health Infrastructure rankings in the International
Institute for Management Developments World Competitiveness Yearbook in 2010 and has
received numerous accolades including the "Best Medical/Wellness Tourism Destination" by
Travel Weekly Asia Industry Awards for 2 consecutive years (2007, 2008).
Airport Passenger Movements 4.9
According to Airports Council International (ACI), airports in Asia Pacific handled 1.07 billion
passengers in 2012, about 7.1% more than in 2011. Beijing (PEK) was the busiest airport in
the region in 2012 handling more than 81 million passengers, followed by Tokyo Haneda
(HND) which handled more than 66 million passengers. Jakarta (CGK), Dubai (DXB) and
Hong Kong (HKG) ranked third, fourth and fifth place respectively. Singapore (SIN) ranked 7
th

in the region and ranked 15
th
worldwide.
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0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
90,000,000
Passenger Traffic 2012
Source: ACI

Changi Airport is recognised as the worlds most awarded airport having received more than
400 accolades since its opening in 1981. In 2012, it received 30 awards. Currently, Changi
Airport has 3 terminals, T1, T2 and T3 with a total floor area of 1.05million sqm to support
air traffic. In total, the airport can handle 66 million passengers annually. With the
combination of a well-developed infrastructure of Changi Airport and Singapore being a
popular destination, passenger movements are expected to be high in volume. Overall, the
passenger movement chart illustrates an upward trend for passenger movements at Changi
Airport except 2009 where there was a slight reduction.
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010 2011 2012
Passenger Movements -Passenger movement at Changi Airport (in million)
Source:Changi Airport 2012 , Passenger Movements

The Changi Airport Group (CAG) documented a strong performance in 2012 with a record
level of 51.2 million passenger movements approximately, 10.0% more than in 2011.
According to CAG, the strong demand for air travel was mainly generated from South Asia as
it experienced more than 12.4% growth. Northeast Asia, Southeast Asia, Southwest Pacific
and Europe grew by 9.9%, 9.7%, 9.4% and 7.5% respectively. Meanwhile, Jakarta, Hong
Kong, Bangkok, Kuala Lumpur and Manila were ranked as the Top 5 for Changis busiest
routes. In 2012, there were 5 newly launched carriers including Singapore-based Scoot,
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Bhutan flag-carrier Drukair, Air Asia Philippines, Shenzhen Airlines and all cargo carrier
Yangtze River Express.
CAG also identified that there was an increase in traffic at the Budget Terminal as 28.6% of
all passengers selected low cost carriers in 2012, an increase from 25% in 2011. Given its
high popularity, a S$25million upgrade for the Singapore budget terminal is being carried
out to accommodate greater handling capacity of up to 16 million passengers annually. The
new terminal, called Terminal 4, is expected to be ready in 2017. Concurrent with the
development of Terminal 4 major airfield works will also be undertaken to increase the
number of aircraft parking stands to support the needs of all airlines operating at Changi
Airport. According to the latest available data, Changi Airport handled 13.05 million
passenger movements in the first quarter 2013, registering a growth rate of 6.2% quarter-on-
quarter. The number of passenger movements at Changi Airport reached 21.6 million up to
May 2013, 4.8% up than the corresponding period in 2012. The strong travel demand
during this period was mainly generated from Northeast Asia, Southwest Pacific and South
Asia. Recently, Sichuan Airlines, being the seventh Chinese carrier launched its operation on
6th of April 2013. It has launched twice-weekly services from Nanning to Singapore. In
addition to new carrier, Changi Airport has provided improved connectivity to Singapore
travellers with the addition of six weekly Jetstar Asia services to Perth beginning on 1 April
2013 as well as seven weekly Singapore Airlines services to Melbourne and two weekly
services to Adelaide starting on July 2013.
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5 Hotel Market Overview
Definitions
According to STB, under the revised tiering or scaling system, hotels are categorised into
Luxury, Upscale, Mid-Tier and Economy.
x Luxury - includes hotels in the luxury segment which are predominantly in prime
locations and/or in historical buildings.
x Upscale - a degree of luxury as well as quality in the furnishings, decor and
equipment in every area of the hotel. Bedrooms will offer more space and are usually
well designed. It provides services such as concierge and porter services, 24 hour
room service, laundry and dry cleaning. Restaurants will provide high quality cuisine.
x Mid-Tier - significantly greater quality and range of facilities such as bars,
restaurants, meeting rooms and in-room dining. All bedrooms will be spacious with
fully en-suite bathrooms and offer a good standard of comfort and amenities.
x Economy - comfortable, no-frills and well-equipped accommodation with standard
facilities, internet connection and an en suite bath/shower room. Rooms are simple,
with basic furnishings and sizes ranging from 12 to 18 sq. metres. It offers
restaurants serving breakfast, lunch and dinner.
According URA, Singapore is divided into the following Planning Regions:
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Outside Central Region
Central Area Fringe Area
x Orchard x Bukit Merah
x Downtown Core: x Bukit Timah
- Bugis x Queenstown
- City Hall x Kallang
- Marina Centre CBD (Part): Phillip,
Raffles Place, Cecil, Maxwell, Tanjong
Pagar, Anson
x Bishan
x Rest of Central Area: x Marine Parade
- Outram x Geylang
- Museum x Toa Payoh
- Newton x Tanglin
- River Valley x Novena
- Singapore River x Southern Islands
- Marina South
- Marina East
- Straits View
- Rochor
West Region, North
Region and East Region
Central Region

In our analysis of historic demand for the identified competitive market, we have relied on
various sources of information, including the most relevant and latest available information
from STB.
Singapores hospitality market is one of the fastest growing in Asia Pacific, with RevPAR
increasing at a rate of 28.5% from 2007 to 2012. As at 31 December 2012, there were 160
gazetted quality hotels which supply 45,850 hotel rooms into the market. Going forward,
Singapores hospitality market is expected to continue to enjoy strong growth prospects.

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Key Hospitality Players & Competitors 5.1
To gain an idea of the key hospitality players within the Singapore, we have identified the
major operators and owners:
2,896
2,609
2,313
1,861
1,755
1,750
1,626
1,553
1,080
1,050
0 500 1,000 1,500 2,000 2,500 3,000 3,500
Far East Hospitality
Fairmont Raffles Hotels International
Millennium Hotels and Resorts
Pan Pacific Hotels and Resorts
Accor Hotels
Shangri-La Hotels and Resorts
Meritus Hotels and Resorts
IHG
Fragrance Hotels Group
Furama Hotels International
Largest Hotel Operator Groups
No. of rooms
Source:CBRE Hotels

The hotel market is increasingly competitive with new additions (as discussed in the supply
section) being added. Mandarin Orchard Singapore competes in this broader market but
more specifically with its direct competitors such as Hilton Singapore Hotel, Grand Hyatt
Singapore, Royal Plaza, Singapore Marriott Hotel and Swisstel The Stamford, Singapore.
The hotel is well located in the heart of Orchard Road. It is the third largest hotel in Singapore
after Marina Bay Sands and Swisstel The Stamford and the largest on Orchard Road.
The scale of the hotel would enable a more efficient operation, though at times a reduction in
room rates may be necessary to increase occupancy at the hotel.

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Hotel Performance 5.2
The following chart outlines the historical performance of the Singapore hotel market from
2007 to 2012

60%
65%
70%
75%
80%
85%
90%
0
50
100
150
200
250
300
2007 2008 2009 2010 2011 2012
Annual Hotel Performance
ADR RevPAR Occupancy Source:STB,CBRE Hotels
ADR/RevPAR
(S$)
Occupancy Rate
(%)

Hotels in Singapore have witnessed strong performance over the past few years.
In 2007, with economic growth and increased tourists arrivals, both occupancy and ADR
showed strong performance. The occupancy level reached an unprecedented high level of
87.0% while ADR was S$201.77. As a result, RevPAR was S$175.57, a growth rate of 25.3%
from 2006. The GFC during 2008 and 2009 affected the tourism industry worldwide and
Singapore was no exception. As a result, Singapore saw a significant decline in visitor arrivals
and overall hotel performance was adversely affected as a result. Occupancy levels started to
decline in 2008 and dropped to 75.8% in 2009 with a decrease of 6.0 and 5.2 percentage
points respectively. In terms of ADR, it still showed strong growth in 2008 with an increase of
21.9% compared to 2007, but dropped sharply in 2009 with a negative growth of 22.9%.
Due to the strong growth in ADR in 2008, RevPAR increased by 13.5% year-on-year over
2007 to reach a record level before the crisis. However, given the weakened performance of
ADR and occupancy in 2009, RevPAR dropped to S$143.74, representing a 27.9% decrease
from the year before.
Fortunately, the hotel market recovered and rebounded quickly in 2010 and continued to
grow in 2011 and 2012. The occupancy level was 85.1% in 2010, a rise of 9.3 percentage
points over 2009. However, the growth rate started to slow in 2011 on the back of an influx
of hotel room supply during that period. Occupancy was 86.5% and 86.4% in 2011 and
2012 respectively. ADR continued to grow and by the end of 2012, ADR surpassed the
highest pre crisis level by achieving S$261.21, a rise of 6.6% year-on-year over 2011. The
market has shown signs of slowdown in the beginning of 2013 as the 12 months moving
average occupancy levels ending April 2013 dropped by 0.75 percentage points year-on-
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year to 86.3%. However, ADR remained strong and continued to trend upward with 12
months moving average ADR ending April 2013 to be S$259.17, 2.2% higher than a year
ago. This resulted in RevPAR to be S$223.60, an increase of 1.3% year-on-year.
Market Tiers 5.3
The STB produces details of the occupancy, ADR and RevPAR performance of hotels by tier or
scale.
65%
70%
75%
80%
85%
90%
95%
2007 2008 2009 2010 2011 2012
Occupancy Rate (by scale)
Luxury Upscale MidTier Economy

-15%
-10%
-5%
0%
5%
10%
15%
20%
2007 2008 2009 2010 2011 2012
Occupancy Rate y-o-y change (by scale)

A simple standard deviation test has been carried out and the results showed that the
Economy tier has the highest standard deviation of 7.47% between December 2007 and
December 2012. In times of a downturn like in 2008 and 2009, the Economy tier
encountered the greatest decline of 8.7% and 11.3% year-on-year in 2008 and 2009
respectively amongst the four tiers. On the other hand, when the tourism market picked up in
2010, the Economy tier enjoyed the greatest gain of 16.1%. In 2011, the largest
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improvement in occupancy came from the Luxury hotels which grew by 1.7 percentage points
to 80.5%. Nonetheless, the occupancy for Upscale hotels was the highest at 87.8%, an
increase of 1.2 percentage points, followed by the Mid-Tier hotels which had an occupancy
level of 87.4%. The Economy hotel tier was the only tier to show an annual decline in
Occupancy in 2011, down by 1.4 percentage points. For the 12 months period ending April
2013, the market showed that Upscale hotels posted a decline of 2.4% while Luxury hotels
registered the greatest growth at 1.8%.
Due to the relatively weaker tourism performance in 2012, many hotels were affected,
especially the Mid-Tier hotels and the Economy hotels. Occupancy of Mid-Tier hotels dropped
by 0.8 percentage points to 86.7% and Economy hotels dropped by 0.2 percentage points to
84.6% Luxury, being the best performer of the year, enjoyed positive growth of 1.1
percentage points to 81.6%. Upscale hotels remained flat versus last year with an occupancy
rate of 87.8%. In general, the total occupancy was still solid at over 80%.
0
50
100
150
200
250
300
350
400
450
2007 2008 2009 2010 2011 2012
S
i
n
g
a
p
o
r
e

D
o
l
l
a
r
Average Room Rate by scale in S$
Source:STB,CBRE Hotels

-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
2007 2008 2009 2010 2011 2012
Average Room Rate y-o-y change

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Despite the slowdown in the tourism sector in 2008, room rates continued to rise. All tiers
enjoyed a double digit growth. In 2009, room rates fell the most in percentage terms in the
Mid-Tier sector, down by 26.1% to S$142.45 but in dollar terms, the Luxury segment declined
the most by dropping 22.6% to S$316.59. After the crisis, the room rates enjoyed excellent
growth rates except for the year 2012. In 2012, the ADR increased the most for Upscale
hotels (up by 8.4% to S$301.14) while the Economy hotels grew by the least with an ADR of
S$110.88. Both Luxury and Mid-Tier hotels enjoyed more than 5% growth rates in ADR to
S$428.35 and S$197.47 respectively. The strong performance in room rates continued in
2013 except for Economy hotels (-3.01%) as indicated by the 12 months moving average
ADR ending April 2013.
0
50
100
150
200
250
300
350
400
2007 2008 2009 2010 2011 2012
S
i
n
g
a
p
o
r
e

D
o
l
l
a
r
RevPAR (by scale in S$)
Luxury Upscale MidTier Economy Source:STB,CBRE Hotels

-40%
-20%
0%
20%
40%
60%
80%
2007 2008 2009 2010 2011 2012
RevPAR y-o-y change

Given the corresponding occupancy rates and ADR, RevPAR for Luxury hotels in 2012 rose by
8.8%, recording the highest rise in RevPAR among all tiers. Economy hotels on the other hand
rose by a mere 0.9% to S$93.78. RevPAR for Mid-Tier and Upscale increased by 4.7% and
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8.4% to S$171.14 and S$264.25 respectively. For the 12 months period ending April 2013,
all tiers experienced slower growth rate in RevPAR. Similar to previous year, Luxury hotels
posted the highest rise in RevPAR ( 4.54%) whereas Economy hotels experienced a negative
growth rate of -3.22%.
Singapore Accommodation Supply and Demand 5.4
5.4.1 Future Hotel Supply
The supply of room nights available in Singapore has grown over the 5 year period from
2007 to 2012 at an average rate of 6.7% a year. The chart below outlines the increase in
Room Nights Available (RNA) and our forecasts. The growth in supply is expected to reduce to
an average of 5.0% a year from 2013 to 2017.
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Room Nights Available (RNA)
RNA RNA Forecast Source: CBRE Hotels

2010 showed the greatest rate of growth and 2013 will have lower growth rate of 5.9%.
Over the next five years the additional supply, according to our research, is estimated to be
as follows.
Unknown Luxury Upscale MidTier Economy Total
Existing 7,109 16,167 14,917 7,657 45,850
Additional supply to 2017 962 3,665 5,938 3,105 13,670
Percentage increase 14% 23% 40% 41% 30%

It is apparent that the bulk of the growth in supply is in the Economy and Mid-Tier sectors with
limited increases in the Upscale and Luxury sectors tending to support the perception that the
latter sectors will outperform the general market in terms of financial performance.
The following table illustrates the new supply of hotel rooms by tier expected from 2013E to
2017E:
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In graphical terms the increases are as follows.
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
SINGAPORE
Supply of Room Nights Available (RNA)
Luxury Forecast Upscale Forec ast MidTier Forecast Economy Forecast
Source: STB,
CBRE Hotels

The following charts outline the existing supply by scale and by location as at December
2012. The hotel rooms in the Orchard area are less than 8,000.
14,455
11,134
11,536
7,585
1,128
12
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000
Rest of Central Area
Fringe Area
Downtown Core
Orchard
East Region
North-East Region
Existing Supply by Location
Source: CBRE Hotels

When analysed by Tier in the graph below the weight of Upscale and Mid-Tier properties
becomes apparent as compared with the proportion of economy and luxury hotels.
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15%
35% 33%
17%
Existing hotel supply by no of rooms
Luxury Upscale MidTier Economy Source: CBRE Hotels

In relation to hotels that are located in the Orchard Road precinct, there are 18 hotels in total
and these supply 7,585 hotel rooms in 2012. Among these, Mandarin Orchard Singapore
has the highest number of hotel rooms, followed by Grand Hyatt Singapore and Orchard
Hotel Singapore. These three hotels supply a total of 2,369 hotel rooms.
The Orchard Road precinct is expected to add 220 rooms in 2013 and 1,264 rooms in
2014, across an estimated 4 new hotels. It is estimated that there will be a total of 9,069
rooms in the Orchard Road precinct by the end of 2015. Following table displays the Top 10
hotels in the Orchard area by room count.

Hotel No. of rooms
Mandarin Orchard Singapore 1,051
Grand Hyatt Singapore 662
Orchard Hotel Singapore 656
Traders Hotel Singapore 546
Royal Plaza 511
Regent Singapore 440
Hilton Singapore Hotel 422
York Hotel Singapore 407
Concorde Hotel Singapore 407
Singapore Marriott Hotel 393
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The location is in the centre of the main retail attractions as indicated in the map below.

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5.4.2 Hotel Demand and Performance Outlook
Singapore received some 14.4 million visitors in 2012. STB expects further growth in visitor
arrivals for 2013, between 14.8 and 15.5 million. Research by CBRE indicates that a total of
4,238 hotel rooms are expected to be completed in 2013.
The combination of gaming facilities and the massive increase in conference and exhibition
space has enabled Singapore to host larger business and MICE meetings, further building on
Singapores reputation as a top international meeting city. Furthermore, leisure visitors will be
drawn to new attractions and events hosted in the IRs, including Universal Studios, Marina
Life Parks, the ArtScience Museum, concerts and musicals featuring international stars from
the entertainment sector. The following chart outlines our projections of future supply and
demand:
50%
55%
60%
65%
70%
75%
80%
85%
90%
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
SINGAPORE
Room Nights Available (RNA), Room Nights Sold (RNS) and Occupancy
RNA RNA Forecast
RNS RNS Forecast
Occupancy Occupancy Forecast
Source: STB, CBRE Hotels

Visitor arrival data is often used as the proxy for room demand. We have found the
correlation relationship between visitor arrivals and the average length of stay to also be
important. Since 1999, the average length of stay has increased from 3.2 to 3.7 days in
2011, based on the latest STB figures available. At the same time, the ratio of Visitor days to
room nights sold (RNS) has dropped indicating that fewer visitors are staying in hotels.
If we adopt a slightly reduced average length of stay figure (the increasing room rates appear
to have had some impact on this) and the same ratio of RNS to Visitor days, the STB
projections indicate that occupancy in 2013 will decrease from 86% to between 81% and
84% as a result of the increase in room supply. Even adopting the lower end of the range and
reducing the length of stay to 3.5, to reflect an increase in the numbers visiting to use the
casino only for weekends, the occupancy figure for 2013 is still more than 81%. The current
occupancy rates are at close to record levels already.
We are of the opinion that the STB forecasts are likely to be achieved as are the occupancy
rates discussed above.
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There are risks attached to these figures due to events such as terrorism, disease, weather,
earthquake, and economic changes etc., which are unpredictable and can have a sudden
and substantial impact on performance. This is particularly the case for the Singapore market
which is dominated by international rather than domestic demand. Forecasting future
performance in the face of such risks is inherently challenging and hence the performance in
the coming years is uncertain. Despite these challenges, the following projections have been
based on the analysis of hotel market performance to date, and have factored in a number of
variables to forecast future hotel performance.
Subject to the above, the outlook over the next five years for demand is strong; the issues will
be whether demand grows at the same time as room supply and the quality and nature of the
demand (i.e. whether it is for hotels in the market segments that are being developed). At
present however the sentiment is reasonable.
The graphs below show the breakup of the additional supply until 2017 by number of hotels
and rooms.
Year Mi dscal e Economy Luxury Upscal e Total s
2013 1,492 1,669 0 1,077 4,238
2014 943 652 182 512 2,289
2015 2,074 200 780 300 3,354
2016 1,229 0 0 773 2,002
2017 200 584 0 1,003 1,787
Totals 5,938 3,105 962 3,665 13,670

7%
26%
40%
28%
Additional hotel supply to 2017 by no of hotels

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7%
27%
43%
23%
Additional hotel supply to 2017 by no of rooms

These occupancy levels might result in a continued increase in average daily room rates
(ADR). At any time hoteliers have a balance between increasing occupancy by reducing ADR
or increasing ADR at the cost of occupancy. The current, and expected, occupancy levels
should enable hoteliers to continue to push the ADR upwards.
Assuming the positive growth of RevPAR for the whole market, and the relative increase in the
different scales, RevPAR for Luxury, Upscale, Mid-Tier and Economy is forecasted to increase
over the next three years.
65%
70%
75%
80%
85%
90%
95%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Occupancy Levels by Tier
Luxury Occupancy Upscale Occupancy
MidTier Occupancy Economy Occupancy
Overall Average
Source: STB and CBRE Hotels
Forecasts

The above graph shows our forecasts for the short term decline in occupancy before levelling
out. We expect Upscale and Mid-Tier properties to achieve higher occupancy levels than
Luxury and Economy hotels. This will vary significantly between individual properties. The
expected overall occupancy for 2013 is between 79% and 85% and the longer term forecast
(2 to 5 years) is between 74% and 81%. This is at a level associated with the increases in
room rates.
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$0
$100
$200
$300
$400
$500
$600
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
ADR Levels by Tier
Luxury ADR Upscale ADR
MidTier ADR Economy ADR
Overall Average
Forecasts

Due to the relative lack of additional supply in the Luxury segments room rates are expected
to increase at a greater rate than the other segments.
In terms of revenue per available room (RevPAR) our forecasts are as follows.
$0
$100
$200
$300
$400
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
RevPAR Levels by Tier
Luxury RevPAR Upscale RevPAR
MidTier RevPAR Economy RevPAR
Overall Average
Forecasts

The RevPAR for all segments is expected to see a slower growth over the next few years, save
for an expected decline in 2015.
We analysed data prepared by STR Global in respect of a selection of mainly Upscale hotels
in the Orchard Road precinct and made relevant projections for such segment.
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70%
72%
74%
76%
78%
80%
82%
84%
86%
88%
90%
2007 2008 2009 2010 2011 2012 2013F 2014F 2015F 2016F 2017F
Occupancy levels
Upscale Occupancy Orchard Occupancy Source:CBRE Hotels

232.2
269.0
210.5
243.5
277.8
301.1
313.9
326.5
332.4
337.1
341.4
255.3
309.0
242.5
272.9
297.4
300.1
313.9
334.6
349.0
362.4
367.0
200
220
240
260
280
300
320
340
360
380
2007 2008 2009 2010 2011 2012 2013F 2014F 2015F 2016F 2017F
ADR levels
Upscale ADR (S$) Orchard ADR (S$)
S$
Source:CBRE Hotels

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199.4
217.4
161.8
210.8
243.8
264.3 265.4 265.1
263.8
266.9
269.9
211.8
240.8
180.2
229.6
246.1
246.9
252.1
258.2
263.2
272.6
275.7
150
170
190
210
230
250
270
290
2007 2008 2009 2010 2011 2012 2013F 2014F 2015F 2016F 2017F
RevPAR levels
Upscale RevPAR (S$) Orchard RevPAR (S$)
Source:CBRE Hotels
S$

Historically, the Upscale hotels located in the Orchard Road precinct had slightly lower
occupancy rates than the Upscale segment as a whole. However room rates (ADR) have
generally been significantly higher as compared to the Upscale segment. This resulted in
RevPAR levels which were also higher than the Upscale segment as a whole. In our opinion,
the relative difference in occupancy levels will be maintained but that ADR rates will improve
over the next few years such that the historical premium over the upscale segment is retained
and will continue growing.
The RevPAR for hotels in Orchard Road was recorded S$246.9 in 2012, and it is expected to
increase to S$275.7 in 2017, with an increased CAGR of 2.2%. The RevPAR for the Upscale
hotels in the Orchard Road precinct enjoyed a CAGR of 3.1% during the 5 year period from
2007 and 2012. Due to the strong ADR performance expected in the next few years, we
expect that the RevPAR for such hotels will continue to grow at a CAGR of 2.2% and
outperform the overall Upscale segment.

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Hotel Investment Market Overview 5.5
5.5.1 Hotel Sales
A review of the hotel market in Singapore suggests that it responds to economic forces in
much the same manner as the market in general. However, unlike other forms of property
investment, a hotel property is generally assessed as a special purpose facility whereby
anticipated business profits tend to determine value levels.
The relative high number of hotel transactions over the past 2 years implied that the investor
sentiment for Singapore hotels remained strong in spite of the weak global economy. It was a
very active year for 2011 with 15 transactions, 9 transactions more than 2010. Prominent
deals included Raffles Hotel (S$339 million), Crowne Plaza Changi Airport Hotel (S$250
million excl. land), Studio M (S$154 million), and a string of budget hotels. The momentum
should pace down slightly in 2012 compared to 2011. For the whole of 2012, only 8 hotels,
mainly budget hotels exchanged hands. Transacted deals in 2012 include Ascott Raffles Place
Singapore, Somerset Grand Cairnhill, Hotel Windsor and Hotel Grand Pacific.
Backed by improved global macroeconomic conditions, the market became more active
towards the end of 2012 with higher demand for hotel stocks. The momentum continued in
2013 with 3 hotels transacted namely, Rendezvous Grand Hotel and Gallery, Ibis Novena
Singapore and Park Hotel Clarke Quay as at the end of April 2013.
In our opinion, the demand for Singaporean hotel stock remains robust given its
attractiveness of Singapore for safe and transparent investment.
As compiled by CBRE, the following table shows hotel sales that have occurred in Singapore
since 2012:
Pr oper t y Rooms Pr i ce per r oom Dat e of sal e Sal e Pr i ce
Kerbau Hotel 33 $363,636 Feb-12 $12,000,000
Gateway Hotel 81 $366,667 Mar-12 $29,700,000
Joo Chiat Hotel 15 $1,720,000 Apr-12 $25,800,000
Mercury Boutique Hotel 55 $490,909 Apr-12 $27,000,000
Ascott Raffles Place Singapore 146 $1,506,849 Sep-12 $220,000,000
Somerset Grand Cairnhill 146 $2,458,904 Sep-12 $359,000,000
Hotel Windsor 225 $724,444 Oct-12 $163,000,000
Hotel Grand Pacific 240 $875,000 Oct-12 $210,000,000
Rendezvous Grand Hotel & Gallery 298 $748,322 Mar-13 $223,000,000
Ibis Novena 241 $622,407 Mar-13 $150,000,000
Park Hotel Clarke Quay 336 $892,857 Apr-13 $300,000,000

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5.5.2 Hotel Sales Volume
-100%
-50%
0%
50%
100%
150%
200%
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
2007 2008 2009 2010 2011 2012 2013
Millions
Sales Volume
Sale Volume in local currency Annual Change
Source:CBRE Hotels, RCA
Change

In 2011, the transaction volume amounted to S$1,526.6 million with 15 transactions. This
reflected a more than 104.2%increase in volume as compared to 2010. However, the high
volume in 2011 was still far below than the peak level in 2006. Due to the considerable high
pricing gap between buyers and sellers expectations, there were fewer deals transacted in
2012. Based on our database, the sale volume in 2012 totalled S$1,046.5 million, a
decrease of 31.45% from previous year.
In terms of source of buyers, most were from Singapore followed by Malaysia.
68%
10%
7%
7%
4%
3%1%
Origin of hotel investors in Singapore from 2007-2013
Singapore Malaysia USA UAE
Not known Indonesia India Source:CBRE Hotels, RCA

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5.5.3 Yield Profile
3%
4%
5%
6%
7%
8%
2007 2008 2009 2010 2011 2012
Singapore - Net Intitial Yields
Hotel Office Retail Industrial Residential
Source:CBRE Hotels, RCA

The last five years have seen initial yields for hotel properties trading between 3.5% and
7.5%. The initial yield reached a record high level in 2008 and 2009 as a result of liquidity
shortages, declining profit levels and poor growth prospects due to the GFC.
On the other hand, the yield for 2012 has been compressed to a record low level, supported
by an improving economy and increased credit demand. In addition, higher demand from
investors to seek transparent and safe investments amidst the economic slowdown resulted in
yield compression in hotel properties recently.
As seen from the chart above, the current yield for a hotel property is trading at a similar level
as an office building.

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6 Singapore Retail Market Overview
Retail Industry Landscape 6.1
6.1.1 Retail Landscape Overview
Singapores prime shopping district has traditionally comprised of the Orchard Road and City
Hall/Marina Centre areas, with the Orchard Road belt (which includes part of Scotts Road)
being Singapores most established and pre-eminent location for shopping.
From a macro perspective, retail malls can be found all over the island; the rise of suburban
malls between 1990s and 2000s was a result of the governments plans for decentralisation,
and has brought about numerous retail pockets being built islandwide. Amongst the
suburban market which is outside the Central Region
1
, the Eastern region, mainly Tampines
has by far the most matured cluster of retail spaces. Following the Governments push for
Jurong Gateway, the Western region is also seen to be the next up-and-coming commercial
hub outside the Central Region. Nonetheless, the main retail bulk is still concentrated within
the Central Region, especially within Orchard Road which remains the countrys core
shopping district.

Source: URA

1
The definition of retail clusters is a combination of CBRE and URAs definition.
2
Prime Orchard Road rents are based on a basket of retail centres representative of
established malls in the Orchard micromarket where prime shop units are located on the
level with heaviest traffic.
3
Prime suburban rents are average values derived from a basket of prime properties that are
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Back in 2002, there was a dramatic shift in the retail landscape with the listing of Real Estate
Investment Trusts (REIT) in Singapore. Due to its business model, REITs are constantly
challenged to create value for unitholders and hence embarked on creative growth strategies
such as acquisitions and Asset Enhancement Initiatives (AEIs).
Consumers have come to expect a quality environment where they can shop in comfort and
be entertained. In 2003, a large number of malls undertook refurbishment works, revamped
their tenant mix etc. and this remains an ongoing trend. Some of the changes include a
repositioning to create more differentiation. The dynamism in the retail scene, amongst
others, led to further injection of retail space into the market. In 2006, about one million sf of
new private retail space was completed. Take-up rates were encouraging and the upbeat
momentum continued into 2008.
The financial crisis that erupted in mid-2008 loomed large and with the governments
announcement that Singapore was in recession, the outlook for consumer sentiment and
tourist arrivals dampened. In addition, retrenchments and wage cuts initiated by business
communities also limited consumer spending. Despite this, strong demand for retail space
allowed occupancy rates to remain stable, above the 93% mark in many micro-markets.
Suburban rents continued to climb upwards while Prime Orchard rents dipped marginally.
The overall retail landscape of Singapore saw a dramatic change in the last five years, having
entered into a major development and refurbishment phases. With the significant injection of
retail space in Orchard Road (in 2009 and 2010), the overall competitiveness of the retail
industry has increased, not only providing shoppers with a greater variety of retail offerings
but also changing the shopping behaviour of consumers along Orchard Road. The openings
of Mandarin Gallery, 313@Somerset, ION and Orchard Central (at virtually full occupancy)
injected a slew of new brands and shopping concepts, heightening competition to a notch
further. This has sparked several mall owners into rejuvenating their malls, pumping in fresh
concepts as well as a facelift such as the creation of duplexes to increase visibility and retail
exposure, reinforcing Orchard Roads reputation as the main shopping destination.
With more intense competition to provide unique shopping experiences, growing affluence
and higher consumer expectations, the Singapores retail landscape today has transformed
into a highly cosmopolitan complex, comprising sophisticated and modern one-stop
shopping centres with entertainment facilities, international brands and retailers. In short, the
overall competitiveness of the retail industry has increased, providing local and foreign
shoppers with an exciting range of products and offerings.
6.1.2 Singapore Retail Competitiveness
Based on CBREs annual global survey of retailer presence and expansion for 326 major
international retailers across 73 countries, Singapore ranks 10th in terms of international
retailers activities and targeted markets in 2012. From the table, it can be observed that
Asia remains a significant target market with Singapore, Hong, Kong, Beijing and Shanghai
all making it to the top 10 targeted destinations. European retailers such as H&M and the
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Inditex Group are known to be growing their networks in the Middle Eastern cities as well as
in the Asia region, especially in Singapore.

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Table 6.1.2 a: 2012 Global Rankings Top 20 Cities
Rank 2012 City, Country % of all Retailers present in
city
Rank 2011
1 London, United Kingdom 55.5% 1=
2 Dubai, United Arab Emirates 53.8% 1=
3 New York, United States 43.9% 3
4= Moscow, Russia 43.2% 6=
4= Paris, France 43.2% 4
6 Hong Kong, Hong Kong 40.5% 5
7 Madrid, Spain 39.9% 6=
8 Kuwait City, Kuwait 39.5% 12
9 Barcelona, Spain 39.2% 10=
10 Singapore, Singapore 38.9% 8=
11= Los Angeles, United States 38.5% 10=
11= Shanghai, China 38.5% 8=
13 Beijing, China 38.2% 13
14 Istanbul, Turkey 37.2% 14=
15= Milan, Italy 36.9% 17
15= Riyadh, Saudi Arabia 36.5% 14=
17 Berlin, Germany 35.5% 14=
18 Munich, Germany 34.9% 18=
19= Jeddah, Saudi Arabia 34.9% 23
19= Las Vegas, United States 34.9% 20
19= Tokyo, Japan 34.9% 18=
Source: CBRE
Hong Kong tops the list of cities with the most Luxury & Business fashion retailers. Singapore,
alongside with Beijing and Tokyo, are also in the top 10 list.
Table 6.1.2 b: 2012 Cities with Most Luxury and Business Fashion Retailers
Rank
2012
City, Country % of Luxury Retailers
present in city
% of all Retailers
present in city
1 Hong Kong, Hong Kong 86.0% 40.5%
=2 Dubai, United Arab Emirates 82.0% 53.8%
=2 London, United Kingdom 82.0% 55.5%
=4 Moscow, Russia 72.0% 43.2%
=4 New York, United States 72.0% 43.9%
=4 Paris, France 72.0% 43.2%
=7 Las Vegas, United States 70.0% 38.5%
=7 Singapore, Singapore 70.0% 38.9%
=9 Beijing, China 68.0% 38.2%
=9 Tokyo, Japan 68.0% 34.9%
Source: CBRE
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6.1.3 Retail Sales Performance
The overall performance of the retail industry hinges on the general economy, and
specifically, several key factors such as population density and household income levels.
Since 2002, the median household income has increased more than 65% from $3,628 to
$6,000 in 2012 while the average household size hovered between 3.46 persons per
household and 3.56 persons per household over the same period. This implies a growing
average of household disposable income, bringing about greater amounts of disposable
income that can be spent of retail goods.
Based on the Household Expenditure Survey in 2007/08, an average household spends
37.7% of total expenditure on retail related goods that includes necessity items as well as
luxury goods. The bulk of these expenses (21.6%) are spent on Food & Non-Alcoholic
Beverages including Food Serving. This is well supported by Singaporeans love for food and
hence the growing phenomenon of increasing F&B spaces within shopping malls.
Chart 6.1.3 a: Median Household Income and Average Household Size
$3,628 $3,601
$3,689
$3,860
$4,000
$4,375
$4,946
$4,850
$5,000
$5,624
$6,000
3.55
3.52 3.52
3.56
3.46
3.48
3.5
3.49
3.5
3.51
3.53
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
3.40
3.42
3.44
3.46
3.48
3.50
3.52
3.54
3.56
3.58
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
M
e
d
i
a
n

M
o
n
t
h
l
y

H
o
u
s
e
h
o
l
d

I
n
c
o
m
e

A
v
e
r
a
g
e

H
o
u
s
e
h
o
l
d

S
i
z
e
Median Monthly Household Income* Average Household Si ze

Source: Singapore Department of Statistics, Key Household Income Trends 2012

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Chart 6.1.3 b: Breakdown of Household Expenditure in 2007/08
Other Expenses
62%
F&B
including
Food Serving
22%
Clothing & Footwear
3% Household
Appliances &
Telecommunicati
on
1%
Recreatio
n &
Culture
9%
Personal
Care
2%
Personal Effects
1%
Retail Sales Related
Expenses
38%
Others
F&B including Food Serving
Clothing & Footwear

Source: Singapore Department of Statistics, Household Expenditure Survey 07/08
Since 2002, tourist arrivals have almost doubled from 7.6 million visitors to 14.4 million
visitors in 2012, crossing the 10 million mark in 2007. Efforts by the Singapore Tourism
Board (STB) to increase tourist arrivals have also helped increased tourism receipts by more
than two-fold from $8.8 billion to $23 billion over the same period. The significant addition
of new retail spaces in Orchard Road coupled with improved market sentiment had also
somewhat helped tourism receipts rebound by 48.1% in 2010. The growing momentum
continued into 2012, albeit at a slower pace.
Going forward, STB expects tourism growth to be slower over the next decade, with its tourism
arrivals estimated to be between 14.8 to 15.5 million visitors and tourism receipts to be at
about S$23.5 billion to S$24.5 billion in 2013. The STB targets both indicators to grow, with
tourist arrivals estimated at 17 million by 2015, bringing in some $30 billion worth of tourism
receipts. This will help to ensure that the tourism sector remains a key economic pillar.

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Chart 6.1.3 c: Tourist Arrivals and Tourism Receipts

Source: Singapore Tourism Board, Singapore Department of Statistics, CBRE
Chart 6.1.3 d: Tourist Retail Spending

Source: Singapore Tourism Board, Singapore Department of Statistics, CBRE
Following the recovery of the economy in 2010, retail sales are generally on an uptrend.
Based on Oxford Economics data, retail sales inched upwards by 2% in 2012 when
compared to 2011 and is forecasted to continue to increase by approximately 7% in 2013 on
the back of an improved outlook for the economy as well as inflation.
According to the Department of Statistics Singapore, retail sales at current prices (excluding
motor vehicles) grew 2.6%, with all sectors registering growth of between 1.1% and 10.6%.
Medical goods and toiletries led this rising trend and other key sectors including supermarkets
(7.5%), telecommunication apparatus & computers (3.7%) and provision & sundry shops
(3.3%). Over the year, only optical goods & books experienced a drop in retail sales of 2.5%,
8,831
6,937
9,800
10,871
12,395
14,121
15,169
12,786
18,931
22,277
23,000
30,000
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
T
o
u
r
i
s
t

A
r
r
i
v
a
l
s

T
o
u
r
i
s
m

R
e
c
e
i
p
t
s

i
n

m
i
l
l
i
o
n
s

(
$
)

Tourism Receipts in millions Tourist Arrivals
2,860
2,277
3,117
3,264
3,687
3,462
3,520
3,281
3,971
4,489
4,755
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
S
G
D

i
n

m
i
l
l
i
o
n
s

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signifying a continual growth of the overall retail sales albeit at a slower pace. Riding on the
overall positive sentiment and the locals love for food, the Food and Beverages services
sector saw a larger year-on-year increase of 4.5% in 2012, with the food catering sector
leading the growth at 8.4%. The restaurant sector also saw growth of 3.9%, as compared to
2.8% growth in fast food outlets. This implies that more consumers are spending more on
food, particularly on food catering as well as at restaurants.
Going forward, CBRE expects retail sales to grow on the back of more exciting retail spaces
coming up such as Orchardgateway (180,000 sf), Shaw Centre (400,000 sf), AEI Suntec City
(125,000 sf), Sports Hub (441,500 sf), Jem (576,000 sf) and Westgate (395,000 sf), albeit at
a slower pace in view of expected the slowdown in tourism figures.

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Chart 6.1.3 e: Retail Sales Performance
0
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(
$
)
R
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a
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S
a
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s

I
n
d
e
x
Retail Trade Operating Receipts ($ bil) Retail Sales Index at Current Prices
Food & Beverages Services Index at Current Prices

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Retail Sales Index at Current
Prices
73.3 79.5 89.5 96.7 102.0 106.3 109.5 101.0 100.0 104.4 106.9 114.2 121.4 129.4 138.4 147.5
Food & Beverages Services
Index at Current Prices
85.2 90.4 96.9 94.2 100.0 106.6 109.1 116.6 123.9 132.0 141.3 150.6
Retail Trade Operating Receipts
($ bil)
37.3 39.2 40.7 37.4 37.3 39.9 40.8 43.6 46.4 49.4 52.9 56.4
Note:
1. The Retail Sales Index was rebased in year 2010
2. Data of the Retail Trade Operating Receipts and Food & Beverages Index begins in 2006.
3. CBREs forecast of Food & Beverages Index and Retail Trade Operating Receipts is based on
Oxford Economics forecast on the Retail Sales Index.

Source: Singapore Department of Statistics, Economic Survey of Singapore, Oxford Economics, CBRE
6.1.4 Urban Infrastructure
Singapore is known for its efficient and extensive infrastructure, on both the physical and
telecom fronts. Seamless travel across the island is facilitated by an efficient public
transportation system, comprising Mass Rapid Transit (MRT), Light Rapid Transit (LRT) and
bus and taxi services, with ample interchanges within the heart of the city, allowing good
access to the city centre.
As at end of 2011, Singapores existing rail system consists of 99 stations and is
approximately 149km long. By 2017, the network will grow to 199km, with 39 additional
stations from the North South Line Extension (NSL), the Tuas West Extension (TWE) and
the Downtown Line (DTL), which are now under construction. In addition, the Government
has announced plans to build two new lines the Thomson and Eastern Region Lines. Rail
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network provides a vital link between shoppers and retail centres; hence, shopping malls
located near rail stations remains a popular choice for both retailers and shoppers.
Road connectivity is similarly efficient, with nine existing expressways spanning across the
island. Rapid population growth, urban development and increasing demand for quality
transport infrastructure has brought about a need for more networks to be constructed. The
Marina Coastal Expressway (MCE) and the 21.5 km North South Expressway (NSE) will be
completed by 2013 and 2015 respectively, increasing islandwide connectivity as well as
easing traffic congestion. Besides more expressway construction, the Pan Island Expressway
(PIE), Central Expressway (CTE), Tampines Expressway (TPE) and Seletar Expressway
(SLE) will also undergo expansion works to accommodate the anticipated increase in road
usage and it is scheduled to be completed by the end of 2014. These provide more
alternative routes to the city centre, enabling a better road experience with lesser congestion.
Retail Real Estate Market 6.2
6.2.1 General Overview
The Singapore retail property market held up well in 2012 despite a modest economic growth
of 1.3 %. Healthy consumer sentiment continued into the first quarter of 2013. Singapores
retail sales (excluding motor vehicles) for the month of January 2013 registered a single digit
fall of 4.9% year-on-year and 1.1% m-o-m. However, the year-on-year decrease was due to
the higher base of spending recorded in the Chinese New Year holidays which occurred in
January 2012, whereas the 2013 Chinese New Year occurred in the month of February.
Several new and refurbished malls were opened over the last one to 1.5 years. In the
downtown area, there were openings of these refurbished malls - CapitaMall Trusts Plaza
Singapura extension (from the AEI of The Atrium), Amara Holdings 100AM, and Chinatown
Point (obtained TOP in Q4 2012 and officially opened in Q1 2013). These malls opened at
healthy pre-commitment levels, supporting the trend of supply-led occupier demand retail
market in Singapore. During the same period, the brand new Gardens by the Bay also
opened with retail and food and beverages outlets, featuring Michelin star rated Pollen,
Peach Garden Noodle House, casual dining Satay by the Bay and others. The suburban
areas also saw a few new malls added into several neighbourhood precincts. They include UE
BizHub East in Changi Business Park, JCube in Jurong East and THE STAR VISTA at one-
north, which has received their respective TOP.
The planned supply for 2013 remains to be dominated by the suburban sub-market with
major retail developments like Jem (576,000 sf), Westgate (395,000 sf) and Bedok Mall
(220,000 sf) while the central region expects the completion of the AEI of The Heeren
(156,000 sf) and Orchardgateway (180,000 sf). Despite the impending supply, there are no
major concerns on vacancy as these mentioned malls have been reportedly enjoying healthy
pre-commitment levels.

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6.2.2 Retail Stock
As at Q1 2013, Singapores private retail space stock accumulated to about 25,144,704 sf,
representing 68.6% of the total islandwide stock. Of the private retail stock, the Fringe Area
retained the majority share of 27.6%. Both the Orchard and Outside Central Region
planning areas have held a relatively constant proportion of private stock (20.2% and 22.4%
respectively).
Chart 6.2.2 a: Distribution of Retail Space as at Q1 2013
Public Retail Stock
31.4%
Downtown Core
11.6%
Orchard
20.2%
Rest of Central
18.2%
Fringe
27.6%
Outside Central
22.4%
Private Retail Stock
68.6%

Source: CBRE
From 2002 to 2008, retail space within Orchard Road had held just below the four million
square feet mark. Retail shopping then was mainly contained within the stretch from
mainstream Orchard from Scotts Road to Killiney Road until Takashimaya/Ngee Ann City and
along CK Tang. Between 2009 and 2010, there was significant injection of retail space of
over a million sf as a result of the completion of 313@Somerset, ION Orchard, Orchard
Central, Knightsbridge and *Scape, as well as the completion of Mandarin Gallery from its
conversion as previously part of Mandarin Orchard Singapore (formerly known as Meritus
Mandarin Singapore). This has not only lengthened Orchard Road in the southern part, but
also changed the retail shopping behaviour of shoppers as shoppers are now attracted more
to this side of Orchard Road. As at end Q1 2013, Orchard Road registered some 5.1 million
sf of retail space, a 38.7% increase from 2002 and 19.8% above the ten-year average of 4.3
million sf.

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Chart 6.2.2 b: Historical and Forecasted Orchard Road Retail Space and Population as at Q1 2013

Source: Oxford Economics, Department of Statistics, CBRE

6.2.3 Potential Supply
The total known pipeline supply between 2013 and end 2016 is estimated to be in the region
of 5,168,100 sf translating to an estimated annual average supply of 1,292,025 sf. Of this,
about 16.0% of the future supply is Orchard Road and the bulk is expected to be completed
in 2013 and 2014. The AEI works for Heeren is expected to be completed in the third quarter
this year, with Robinsons occupying some 156,000 sf of NLA. This leaves about 130,000 sf of
potential vacant space at its existing premises at Centrepoint. Another major project is the
Orchardgateway, which will add another 180,000 sf of retail space to the existing supply.
Orchardgateway is positioned as a fashion mall housing fashion and lifestyle brands
spanning across six retail levels. A segment in the mall will be dedicated to the lifestyle-
oriented library@orchard which will also open in 2014. 2014 will also see the completion of
268 Orchard, located across Mandarin Gallery. Shaw Centre will have a new two-storey high
floor-to ceiling glass facade by March next year, injecting some 400,000 sf of NLA. Just next
door, Shaw House will feature a 10,000 sf Urban Plaza with water features and a multi-
purpose event space.
The following chart shows the known future supply of retail space by planning areas.

0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
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Chart 6.2.3 a: Future Retail Supply by Planning Areas (2013 2016)

Source: CBRE

0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2013 2014 2015 2016
N
e
t

L
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(
s
f
)

Orchard Downtown Core Rest of Central Fringe Outside Central Region
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Ex pec ted
Compl eti on
Pr opos ed Retai l Pr oj ec ts Loc ati on Pl anni ng Regi on
Net Fl oor
Ar ea** ( s f)
3Q 2013 AEI T he Heeren Orchard Ro ad Orchard 156,000
Q4 2013 Orchardgateway Orchard Rd/ Somerset Rd Orchard 180,000
2013 Sofitel So Singapore Robinson Road Downtown Core 7,600
2013 Asia Square Tower 2 Marina Bay Downtown Core 27,000
2013 Connexion Farrer Park Station Rd Fringe Area 9,150
Q3 2013 The Metropolis North Buona Vista Dr Fringe Area 20,000
2013 CT Hub Kallang Bahru/ Kallang Ave Fringe Area 61,500
2013 CT Hub 2 Kallang Bahru/ Kallang Ave Fringe Area 16,000
Q4 2013 Aperia Lavender Street Fringe Area 100,000
Q2 2013 Jem Jurong Gateway Rd Outside Central Region 576,000
2013 Paya Lebar Square Paya Lebar Rd Outside Central Region 88,200
Q4 2013 Westgate Boon Lay Way Outside Central Region 395,000
Q4 2013 HillV2 Hillview Avenue Outside Central Region 55,500
Q4 2013 Bedok Mall New Upper Changi Rd Outside Central Region 220,000
T OT AL f o r 2013 1,911,950
Ex pec ted
Compl eti on
Net Fl oor
Ar ea** ( s f)
2014 268 Orchard Orchard Road Orchard 90,000
Q1 2014 AEI Shaw C ent re Orchard Ro ad Orchard 400,000
Q4 2014 Capitol Piazza North Bridge Rd/ Stamford Rd Downtown Core 156,100
Q4 2014 AEI Sunt ec C it y T emasek Bo ulevard Do wnt o wn C o re 125,000
Q1 2014 One Raffles Place AEI Raffles Place Downtown Core 14,000
H1 2014 Loft@Nathan Nathan Rd Fringe Area 12,600
Q2 2014 Sports Hub Kallang Fringe Area 441,500
Q4 2014 Fusionopolis Phase 5 Fusionopolis Place Fringe Area 59,200
2014 Shopping Development at Benoi Rd Benoi Rd/ Joo Koon Circle Outside Central Region 107,000
Q3 2014 One KM Tanjong Katong Rd Outside Central Region 210,000
Q4 2014 The Seletar Mall Sengkang West Avenue/ Fernvale Road Outside Central Region 188,000
T OT AL f o r 2014 1,803,400
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Ex pec ted
Compl eti on
Net Fl oor
Ar ea** ( s f)
2015 Peck Seah/ Choon Guan St Development Peck Seah St/ Choon Guan St Downtown Core 80,000
2015 South Beach Beach Rd Downtown Core 85,050
2015 Altez Enggor St Downtown Core 18,600
2015 Futuris/ Synthesis/ Kinesis Fusionopolis Phase 2A Fringe Area 1,100
H1 2015 Park Hotel Alexandra Alexandra Rd Fringe Area 46,450
2015 Centropod@Changi Changi Rd Outside Central Region 18,300
2015 The Promenade @ Pelikat Jln Pelikat Outside Central Region 83,400
2015 The Springside Sembawang Rd Outside Central Region 28,000
2015 The Commerz @ Irving Irving Place Outside Central Region 36,000
2015 Waterway Point Punggol Central Outside Central Region 370,000
2015 Big Box Jurong East St 11 Outside Central Region 329,000
T OT AL f o r 2015 1,095,900
Ex pec ted
Compl eti on
Net Fl oor
Ar ea** ( s f)
2016 Oxley Tower Robinson Road Downtown Core 32,600
2016 Eon Shenton Shenton Way Downtown Core 5,200
2016 Shopping Development at Robinson Road Robinson Road Downtown Core 10,600
Q4 2016 Marina One Marina Way Downtown Core 140,000
Q1 2016 Duo Galleria Rochor Road Rest of Central Area 54,000
2016 The Hillion Bukit Panjang Outside Central Region 114,450
T OT AL f or 2016 356,850
GRAND T OT AL 5,168,100
*(as at end-March 2013) New space is considered to be space under construction,
additions/extensions and total refurbishment of existing space. List includes projects which are
under construction or have obtained provisional or written permission.
**estimates only
Source: CBRE
6.2.4 Demand
Occupier demand remained healthy especially from the fast fashion and food & beverage
industries. Large and flexible retail space in new or well-located malls are generally more
favoured by potential tenants while landlords have also been observed to accept lower rents
for tenants with large floor plate requirements.
Overall, the islandwide net absorption of private retail space stood at 53,820 sf in the whole
of 2012, and fell to a negative 21,528 sf in Q1 2013. The Orchard Road micro-market
reported a negative annual average net absorption of 21,528 sf, against a larger negative
net supply of 43,056 sf during the corresponding period. On a 10-year basis in the Orchard
Road micromarket, net supply averaged at 123,297 sf, of which about an average of
114,490 sf or 92.9% were absorbed.

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Chart 6.2.4 a: Orchard Road Retail Demand versus Supply (Private Sector)

-200,000
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q1 2013
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
New Supply (sf) Net Absorption (sf)
Ten-Year Average Supply (sf) Ten-Year Average Net Absorption (sf)
123,297 sf
114,490 sf
N
e
w

S
u
p
p
l
y
/

N
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t
A
b
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o
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p
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(
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-
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e
a
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s

A
v
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r
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S
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/

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a
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s

A
v
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r
a
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N
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a

Source: URA, CBRE
Since 2004, the strong demand for private retail property has generated an island-wide
occupancy rate of more than 90.0%. Private retail space in the Orchard Road micro-market
achieved an average occupancy of 95.0% as at Q4 2012, higher than the islandwide
average at 93.6%. This is the highest recorded occupancy rate since 2008 (96.7%), just
before the completion of 1.07 million sf of space in 2009 and 2010. Occupancy rates
bottomed at 94.2% in 2009 as a result of the huge supply. Nonetheless, being the key retail
destination in Singapore, the Orchard Road micro-market gradually improved with healthy
take-ups to reach 95.0% as at Q4 2012.
Chart 6.2.4 b: Retail Occupancy Rate (Private Sector)
82.00%
84.00%
86.00%
88.00%
90.00%
92.00%
94.00%
96.00%
98.00%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q1
2013
O
c
c
u
p
a
n
c
y

R
a
t
e
s
Island-wide Orchard Downtown Core Outside Central Region

Source: URA, CBRE
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6.2.5 Rent
Retail rentals went on an uptrend from 2003 to 2007 in line with growing tourism arrivals
and receipts as well as retail sales. Prime Orchard Road
2
rentals began to dip in 2008,
registering a year-on-year contraction of 0.8%, immediately reflecting the change in
consumer and market sentiment. As the economic crisis deepened, Prime Orchard Road
rents declined further by 16.6% from $36.06 psf/month in Q4 2008 to $30.07 psf/month in
Q2 2011. Given the dynamic change in retail activity along Orchard Road, Prime Orchard
Road rents took a turn and averaged at $31.60 psf/month in 2011.
Supported by continued domestic demand and growing tourism, the average rents for prime
Orchard Road held steady at $31.60 psf/month since Q3 2011 and rose 1.9% q-o-q to
$32.20 psf/month in Q1 2013. Compared to the trough at $30.07 psf/month in the first
half of 2011, prime Orchard Road rents have increased 7.1%. Prime suburban
3
rents
remained stable at $29.75 psf/month in Q1 2013 for the seventh consecutive quarter since
Q3 2011.
Over the next 12 months, CBRE expects rents to remain fairly stable as businesses and
trading patterns in the newer malls stabilise after the first cycle of lease renewals. Aside from
the series of asset enhancement initiatives undertaken by several of the large Orchard Road
malls in the last two years, ION Orchard, Orchard Central and 313 Orchard have also taken
advantage of their lease renewal periods since their TOP to reposition themselves. Beyond
2013, CBRE forecasts 3.0% annual increments in rents in view of the positive outlook for retail
sales and the view that the overall economy is expected to remain healthy, barring
unforeseen circumstances.

2
Prime Orchard Road rents are based on a basket of retail centres representative of
established malls in the Orchard micromarket where prime shop units are located on the
level with heaviest traffic.
3
Prime suburban rents are average values derived from a basket of prime properties that are
located in the Decentralised sub-market, outside of the Prime Orchard Road, City Hall and
City Fringe areas and are quoted on a per square foot net floor area and monthly basis.

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Chart 6.2.5 a: Prime Suburban and Prime Orchard Road Rents

Source: URA; CBRE

$30.20
$31.60
$31.60 $32.20
$33.17
$34.16
$35.19
$36.24
$0
$5
$10
$15
$20
$25
$30
$35
$40
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
2
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R
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(
$

p
s
f

p
m
)

R
e
n
t
a
l

G
r
o
w
t
h

Suburban Growth (Y-o-Y) Orchard Road Growth (Y-o-Y)
Gross Prime Suburban Rent (SGD psf pm) Gross Prime Orchard Road Rent (SGD psf pm)
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6.2.6 Investment Sales Transactions
There were not many major en-bloc retail property investment transactions over the last few
years. This is typical as most owners, particularly the REITs, keep their retail properties as a
strategic income-generating investment and therefore very few, if any, of such assets will be
put up in the market for sale. From 2011 to 2013YTD, some of the more prominent retail
investment transactions included Iluma (now known as Bugis+), Bedok Point, CHIJMES and
Compass Point. The following table summarises the transaction details:
Table 6.2.6 a: Selected Major Retail Mall Investment Transactions (2011 to Q1 2013)
Propert y
I luma (now
known as
Bugis+)
Bedok Point CHI JMES Compass Point
St ake 100% 100% 100% 100%
Buyer CMT FCT
Perennial Real
Estate Pte Ltd
Prudential Asia
Property Fund
(81.01%)
Frasers
Centrepoint Ltd
Locat ion Bugis Bedok City Hall Sengkang
Tenure (years) 60 wef 2005 99 wef 1978 99 wef 1991 99 wef 2000
Complet ion Year 2009 2010 1996 2002
Transact ion Year Q1 2011 Q3 2011 Q4 2011 Q2 2012
Transact ed Value
($ M)
295 127 177 519
Transact ed Value ($
psf over NLA)
1,593 1,568 2,218 1,925
Est imat ed Analysed
Yield (%)
6.00 5.75 5.25 5.50
Source: CBRE
Over the last five quarters, there were several transactions involving the acquisition of
ownership stake, namely (1) NTUC Income Insurance Co-operative Pte Ltd acquired 24%
stake of Parkway Parade Partnership Limited, (2) Mercatus Co-operative Pte Ltd bought 50%
stake in nex Shopping Mall from Pramerica Asia, (3) Guthrie GTS Ltd acquired 50% in
Heartland Retail Holdings Pte Ltd.
The following table represents a cross-section of major retail sales transactions over the last
five quarters:

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Table 6.2.6 b: Selected Major Retail /Retail-Mixed Use Strata Investment Transactions (2012 to Q1 2013)*
Unit Price
(psf over NLA)
Crown Centre
(17 ground floor units)
7,072 sf NLA
Katong Junction
(Office + Retail)
GFA of 47,558 sf
51@AMK
15,285 sf NLA
The Quayside
(16 units)
33,000 sf NLA
Parkway Parade
Total
Consideration
(24% stake) $250,930,000
135,026 sf NLA
Chelsea Grove
(Strata retail in mixed
use development)
11,356 sf NLA
nex Shopping Mall
Total
Consideration
(50% stake of
Pramerica Asias share
of nex)
$825 million
McDonald's Place
(Retail + Office)
GFA 178,728 sf
NLA 51,410 sf
Total
Consideration
$99,453,954
Parklane Shopping
Centre
Strata
9,962 sf NLA
Oxley Holdings Ltd
NA
Q2 2012
Heartland Mall Kovan
+ 6 retail centres
(50% in Heartland
Retail Holdings Pte Ltd)
Hougang
99 Years
wef 1993
Guthrie GTS Ltd
Prime Retail
Holdings Pte Ltd
(Asian Retail Mall
Fund)
Q1 2012 Rochor $1,456
99 Years
wef 1983
NA
Valewood
Investments Pte Ltd
NA
Q3 2012 Serangoon
99 Years
wef 2008
Mercatus Cooperative
Pte Ltd
Pramerica Asia
Q3 2012 Novena $1,752 FH NA
Q2 2012
Bukit
Timah
$2,918 FH
Q3 2012
Marine
Parade
99 Years
wef1979
NTUC Income
Insurance Co-operative
Pte Ltd
Lend Lease Parkway
Parade Partnership
Ltd
Shin Kwan Group
Q4 2012
Ang Mo
Kio
$902
81 years
left
EX Nexus Services Top Global Limited
Q4 2012
Singapore
River
$2,091
99 Years
wef 1994
RB Capital Hotels
Limited
Hua Jie Pte Ltd
Q1 2013
Bukit
Timah
$4,242 FH Far East Flora
Consolidated Land
Investment Holdings
Q4 2012
Marine
Parade
$1,162 FH
Kishore Buxani and
Mukesh Valabhji of
Seychelles-based
Capital Management
Group
Vendor Year Property
Planning
Area
Tenure Buyer
*Only selected transactions of $10 million and above are captured.
Source: CBRE
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There were a total of 99 caveats lodged for strata retail units within the Orchard planning
area from 2012 to 2013 YTD, mainly at the nine strata-titled malls. On average, strata retail
units are transacted at $5,680 psf with strategically well-located strata malls transacting at
above $7,000 psf on average (Lucky Plaza and Far East Plaza). A summary of the
transactions is as follows:
Table 6.2.6 c: Summary of Strata Retail Units Transaction in Orchard (2012 to Q1 2013)*
Shopping Mall
Aver age of
Unit Pr ice
( $ psf )
Concorde Hotel and Shopping Mall $ 3,220
Cuppage Plaza $ 1,500
Far East Plaza $ 7,893
Far East Shopping Centre $ 4,334
Lucky Plaza $ 7,699
Midpoint Orchard $ 995
Orchard Plaza $ 3,537
Orchard Towers $ 3,773
Tanglin Shopping Centre $ 4,450
Aver age of all Tr ansactions $ 5, 680

Source: REALIS
Retail Trend & Market Outlook 6.3
Retail in Singapore has been predominantly driven by Food & Beverages and fast fashion
brands such as H&M, UNIQLO, Bershka, Abercrombie & Fitch etc. as seen from the
expansion of some of these brands into the suburban markets. Going forward, we expect this
trend to thrive and continue along with the return of departmental stores that include
Robinsons, BHG and Mark & Spencer.
Over the years, mall owners have introduced global brand names to further enhance the
image of their malls, with brands traditionally associated with the Orchard locality expanding
in to suburban malls. While tenant mixes are being improved, older malls have also been
refurbished to keep up with consumers rising expectations and changing preferences.
The Orchard Road precinct has been and will continually undergo rejuvenation through
efforts by both the public as well as the private sector. In late 2007 through 2009, the
Government pumped in $40 million for the rejuvenation of Orchard Road, enhancing the
overall landscape of the shopping belt. Over the next few years, more AEI works will be
carried out given the shortened renewal cycles of mall facades and positioning. Currently,
Shaw Centre has just begun works while Heerens revamp can be expected to be completed
by Q3 2013. These new faades and fresh concepts are likely to and will inject continual
excitement along Singapores prime shopping belt.
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Going forward, though projections of retail sales remain upbeat albeit the prolonged global
economic pessimism, CBRE expects the retail market over the next six to 12 months to remain
moderate in view of labour crunch issues which continue to plague retailers. As the economy
gradually recovers and barring unforeseen circumstances, rents can be expected to grow at
an estimated average of 3.0% p.a. through to 2017.

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7 The Properties
The property containing the Mandarin Orchard Hotel and the Mandarin Gallery is
strategically situated in the middle of the 2.2 km Orchard Road, a very busy part of Orchard
Road which starts from the Scotts Road junction and ends around Killiney Road. It is located
midway between two Mass Rapid Transit (MRT) stations, namely the Orchard and Somerset
stations which both are within close walking distance from Mandarin Gallery.
The tenure of the property is leasehold for a term of 99 years from 1 July 1957. The balance
lease term is about 43.3 years as at today. Overseas Union Enterprises Limited is the
registered owner and The Ngee Ann Kongsi the reversionary owner.

The Mandarin Orchard Hotel is a 1,051 room, upscale hotel, which was established in 1971
and refurbished in 2009. It comprises of a 39 storey Orchard Tower and 37 storey Main
Tower. It has extensive food and beverage facilities with 5 outlets and approximately 25,511
sf of meeting and function space. The hotel is well known and has strong brand recognition.
The Mandarin Gallery was opened in 2009 after the extensive asset enhancement initiative
4

that was completed at the end of November 2009, Mandarin Gallery is a four-storey high-
end shopping mall seamlessly integrated with Mandarin Orchard Singapore.

4
Formerly known as the Meritus Mandarin Singapore, part of the Meritus Mandarin Building and
opened in 1973, the Mandarin Orchard Singapore underwent extensive refurbishment and asset
enhancement works that cost about $200 million to revamp and yield a few floors of retail space
(known as Mandarin Gallery) out of the hotel tower.
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The property is approximately a 4 km drive from the Central Business District (CBD) and is
easily accessible by vehicles via the Central Expressway (CTE) which links to other parts of
the island.
Mandarin Gallery boasts a highly-prominent 152-metre wide retail street front with full floor-
to-ceiling glass exposure, a unique characteristic and structural feature most malls along the
premier Orchard Road Shopping belt do not possess.
The provision of a multi-level car park helps alleviate parking woes of drivers in traffic heavy
Orchard Road. The mall offers 441 parking lots shared and operated by the hotel.
Overview of Mandarin Orchard Singapore 7.1
7.1.1 Key Competitors
Competitors are usually identified based upon a combination of key attributes such as
location, size, quality, facilities and branding. We have been advised that the hotel
management has identified the following as being in its primary competitor set:
Hotel Name
No of
rooms
Address Area
Hilton Singapore Hotel 422 581 Orchard Road Orchard
Grand Park Orchard Singapore 308 270 Orchard Road Orchard
Orchard Hotel 656 442 Orchard Road Orchard
Royal Plaza 511 25 Scotts Road Orchard
Singapore Marriott Hotel 393 320 Orchard Road Orchard
Swisstel The Stamford, Singapore 1,261 2 Stamford Road Downtown Core

All of these, with the exception of the Swisstel, are in the Orchard Road precinct and range
in size from 308 to 1,261 rooms.
There are others that also compete, particularly in terms of location. An analysis of the subject
hotel against a selection of other hotels that are located on the Orchard Road has been
carried out. These selected hotels include Hotel Royal Plaza On Scotts, Sheraton Hotel Towers
Singapore, Quincy Hotel, The Elizabeth Hotel, Pan Pacific Orchard, Holiday Inn Singapore
Orchard City Centre, Concorde Hotel Singapore, Grand Park Orchard, Marriott Singapore
Hotel, Millennium Orchard Singapore, Hilton Singapore Hotel, Orchard Parade Hotel
Singapore, Regent Hotel Singapore, Traders Hotel Singapore and Shangri-La Singapore
Tower & Garden Wing.
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The table below indicates that the hotel competes successfully in the Upscale segment as
defined by STB. We also compared it against a selection of mainly upscale hotels in the
Orchard Road precinct.
Year
Upscal e
Occupancy
Orchard
Occupancy
Subj ect
Occupancy
Upscal e
ADR ( S$)
Orchard
ADR ( S$)
Subj ect
ADR ( $)
Upscal e
RevPAR
( S$)
Orchard
RevPAR
( S$)
Subj ect
RevPAR
( $)
2010 86.6% 84.2% 84.6% 243.49 272.90 254.26 210.78 229.65 215.10
2011 87.8% 82.7% 85.8% 277.84 297.44 277.34 243.81 246.11 237.86
2012 87.8% 82.3% 86.5% 301.14 300.13 281.47 264.25 246.87 243.34
Source: STB, STR Global, hotel management and CBRE Hotels
In 2012, the subject hotel had a higher occupancy rates than the competitors in the Orchard
Road precinct but lower than the overall upscale competitor set. With regards to ADR, the
subject hotel has slightly lower rates than the Orchard Road competitors as well as the overall
upscale competitor set. The RevPAR of the hotel has been improving faster than the Orchard
Road competitor set and in 2012, it reached S$243.34.
The charts below display the hotel performance of the upscale hotels in Orchard Road
precinct over a 5 year period from 2007 to 2012. Similar to other hotels, these selected
properties were adversely affected during the GFC period and occupancy levels in 2009
dropped by 4.6% over 2008 to 74.3%. In 2010, the market picked up and as a result, the
occupancy has increased to 84.2%, an increase of 13.3% over 2009. Since then, the market
has been stabilised and the occupancy level remains above 80%.
The impact of GFC on ADR was apparent towards the end of 2009. The ADR dropped to a
low level of S$241.41 in Feb 2010 from the peak level of S$309.26 in December 2008. As
the market recovered, the ADR has been growing sharply. Now, the rates have returned to
the pre-crisis level and as of March 2013, the ADR for upscale hotels on Orchard Road
stabilised at S$297.69 on average. Likewise, the resultant RevPAR returned to the pre-crisis
levels and as of March 2013, the RevPAR was S$246.68, up by 37.0% from the bottom level
of S$180.06.

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There will be other hotels added to the Orchard Road precinct over the next few years. These
will, if all proceeds as planned, add 2,154 rooms by 2017 but less than 1,500 by the end of
2014. Most of these will not compete directly with the subject hotel on the basis of
positioning.

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7.1.2 SWOT Analysis
The property has the following characteristics:
Strengths
Location Heart of Orchard Road
Quality Recently refurbished
Strong reputation Long established
Size Enables efficient operation due to the
benefits of scale

Opportunities
Increasing medical tourists given its close
proximity to the Orchard medical cluster
Increasing higher yielding customers
Attracting more visitors from Indonesia,
China and India due to the strong economic
growth in these markets.
Weaknesses
Size Large number of rooms may adversely
impact room rates
Lack of global branding despite local
reputation
Threats
New supply of Singapore hotels Reducing
room rates
One off events SARS, GFC etc.

7.1.3 Outlook for Mandarin Orchard
The Mandarin Orchard hotel is well located and Orchard Road is likely to remain as a major
draw for tourists. We consider that many of the increases in supply across Singapore are in
less attractive locations and properties such as the subject hotel are likely to continue to
perform well and be less affected by increases in supply than those in such secondary
locations.

We have indicated earlier in this report that overall occupancy rate in 2013 is likely to
decrease from 86% to between 81% and 84%. The room rates will likely increase, resulting in
a relatively minimal RevPAR change. The subject property is likely to come under less pressure
because of its quality and location than the market as a whole.
Overview of Mandarin Gallery 7.2
7.2.1 Tenancy Trade Mix
Mandarin Gallery, with a distinct market positioning in the upscale retail market segment,
targets the young and affluent working professionals, upmarket shoppers and tourists of all
nationalities. It has a total net lettable area (NLA) of about 125,293 sf and a well-
diversified tenant mix which is spread across a variety of trade sectors such as food and
beverage, gifts, jewellery, services and high-end international and local fashion labels for the
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well-heeled and fashion savvy. With about 97 shops including six flagship duplexes, each
level at Mandarin Gallery is designed to have its own unique theme and offering. Levels 1
and 2 house international labels such as Mont Blanc, Emporio Armani, Paul Smith and
Mulberry, which cater to the well-to-do and sophisticated. Level 3 has an active and lifestyle
theme, with edgier product offerings such as The Denim Store and Ambush. Level 4 focuses
on dining and lifestyle offerings that include chill-out dining and also services such as dental
and aesthetics. Examples of other retail tenants include BOSS Shop, Emporio Armani,
Rimowa, Marc By Marc Jacobs, Mauboussin and Y-3, amongst many others. The mall also
houses some new-to-market, F&B brands such as Ippudo and Tonkatsu Ma Maison. With
these fresh names and a strategic recruitment of tenants that has drawn a number of
successful second-line famous brands, Mandarin Gallery provides new retail and unique
experience for shoppers at its intimately-sized but efficient retail floor plate.
Based on the tenancy information provided by the REIT Manager, the trade mix at Mandarin
Gallery is illustrated in the following chart:
Chart 7.2.1 a: Tenant Mix by NLA for the Three Months Ended 31 March 2013

Fashion Apparel
35%
Food & Beverages
15%
Living & Lifestyle
15%
Accessories
9%
Hair & Beauty
13%
Watches & Jewellery
7%
Services
3%
Travel
3%

Source: REIT Manager
At 125,293 sf, Mandarin Gallery is smaller compared to nearby malls such as Ngee Ann City
which is over 700,000 sf and Paragon (around 483,000 sf). However, its unique feature of
wide and prominent street frontage is very attractive to retailers who rank good street
exposure as one of the key site selection criterion. Capitalizing on this rare feature, Mandarin
Gallery is able to offer many well-known brands prime retail space, thereby forming a strong
roster of retail tenants.
Approximately 15.0% of the total NLA at Mandarin Gallery is occupied by F&B operators.
Compared to most malls which offer at least 20% of total NLA for F&B, the trade mix at
Mandarin Gallery is light on F&B. However, dining facilities are also offered at the Mandarin
Orchard Singapore, illustrating cohesiveness and strategic space planning at this subject
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mixed use development. Restaurants and seating capacity at Mandarin Orchard Singapore
are tabulated as per below:
Name Concept Capacity
Mandarin Court Chinese Restaurant Chinese 180
The Chatterbox Coffeehouse Local & International 139
Triple 3, the Buffet Restaurant International Buffet 286
Coffee & Crust International 18
Bar on 5 Bar Lounge 225
Total 848

According to the REIT Manager, a significant proportion of specialty leases representing
50.4% of the total NLA were subject to expiry during 2012. Out of the leases expired to date,
almost two-thirds (63.9%) of the space (by NLA) were renewed at a higher rent.
Overall, the committed occupancy rate of retail space at Mandarin Gallery as at 31 March
2013 was 100%. The strong tenant retention rate at the mall is symbolic and signals how
successful and well received the mall is.
7.2.2 Foot Fall, Mall Revenue and Occupancy Cost
Mandarin Gallery has a sophisticated foot fall counting system that also captures key traffic
coming from Mandarin Orchard Singapore. Over the years, foot traffic that flows into the
mall has been rising. There was foot fall growth of 7.7% in 2012 over 2011 and 5.7%
increase from 2010 to 2011. On an annual basis, this intimately sized Mandarin Gallery
reported a shopper traffic count of 6.8 million in 2012.
Entrance/Exit 2010-2011 2011-2012
Foot Fall Increase 5.70% 7.70%
Mall Sales Revenue 17.00% +5.1% *

*Sales growth rate was moderated due to change in tenancies and some shop units were not
trading as they were being fitted out.
Between 2010 and 2012, mall sales grew at a healthy 11.05% per annum (simple average)
vis--vis Singapores average retail sales growth of 3.4% over the corresponding period.
The mall generates an average of 20-25% occupancy cost reflecting the concentration of
tenant mix on more specialty fashion and accessories retailers and more notably due to the
absence of anchor tenants.

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7.2.3 Rents
Mandarin Gallery has gained traction and performed well over the last few years. Aside from
a strong occupancy level, the mall has achieved competitive rental rates. Mandarin Gallerys
gross average rent of $22.70 psf per month as at Q1 2013 is strong and in line with the
market rate.
7.2.4 SWOT Analysis
When formulating future asset enhancement initiatives and marketing strategies, it is critical
to understand the favourable and detrimental factors that can impact the successful
implementation and execution of the plans. The following highlights the strengths and
challenges Mandarin Gallery could face, in light of the existing and expected future retail
scene and landscape.
Strengths
x Mandarin Gallery is situated at a prominent location in the section of Orchard Road
that is widely viewed as the heart of Orchard Road. This is at the busy junction of
Orchard and Grange Road where a number of shopping centres are clustered. The
mall is also strategically situated within walking distance from both Somerset and
Orchard MRT stations. This strategic location will bring in shoppers from all
directions with the potential to cannibalise shoppers dollars from nearby malls that
offer similar retail concepts.
x Mandarin Gallery and Mandarin Orchard Singapore sit on an exclusive plot of land
bounded by the primary Orchard Road and the secondary Orchard Link and Grange
Road. This exclusivity prevents the mall from being dwarfed by other developments,
ensuring high visibility and strong presence.
x Mandarin Gallery has a long and prominent frontage along Orchard Road. The
buildings design, with a distinctive outdoor escalator as well as strong brand lines on
the street level, creates a strong presence and projects a sense of grandeur. The
design of Mandarin Gallery is inspired by the concept of a modern Japanese tea
ceremony room, where the malls crystalline exterior is designed to blend into its
luxurious interior, in order to create a retail space that engages shoppers. The design
of the mall projects the air of modern elegance, which hints at the high-end nature of
the goods and services available.
x Mandarin Gallery has strong positioning and is a niche mall with retail offerings
ranging from luxury labels to mid-range brands. F&B choices are also appealing,
with renowned names such as Wild Honey and Ippudo. This retail niche therefore
appeals to a defined profile of shoppers, from working professionals to families and
tourists.
Weaknesses
x The size of the mall may be limiting on the variety of retail offerings. The mall is at
the smaller end of the mid-sized range, with a relatively simple oval-shaped layout.
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This however allows for easy navigation and is of a manageable scale to shoppers.
Visibility of shopfronts is also maximised with most shops aligned around the atrium
and minimal secondary/hidden areas.
x While it is seen as part of the cluster of malls at the heart of Orchard/Scotts node, it
is not linked underground to the other malls. Furthermore, there is no direct/covered
link to any of the MRT stations. This will result in high volumes of human traffic on the
pedestrian paths during weekends and sales periods, as well as stranded shoppers in
the event of inclement weather.
x Mandarin Gallery is on leasehold term of 99 years, with remaining lease term of
43.3 years while there are other malls along Orchard Road which are freehold
though this is few.
Opportunities
x The URAs announcement in August 2012 to double cash incentives
5
provided to mall
owners along Orchard Road provides Mandarin Gallery an opportunity to construct
an underground link as it sits on URAs proposed connectivity plans. This allows
greater opportunity to connect shoppers to the MRT stations via a weather-proof link.
x The up and coming Orchardgateway and 268 Orchard are located in close proximity
to Mandarin Gallery. Upon completion of these malls and the relocation of
Robinsons from Centrepoint to The Heeren by 2014, this cluster along Orchard Road
is expected to generate much hype and excitement, drawing greater crowds to the
already bustling cluster.
x The Governments plans to increase connectivity by expanding the rail network will
further enhance the accessibility of Orchard Road as a whole. To be completed by
2019, the Thomson Line is set to connect the northern, southern and eastern region
to the Central Area via planned interchanges at Newton, Bugis, Little India and
Chinatown.
Threats
x Orchardgateway has gained much interest from the public especially with its largely
anticipated Orchard library. As such, the completion of Orchardgateway may pull
crowds away from Mandarin Gallery. This factor of new competition will pose threat
to all other malls along Orchard Road.

5
Source: URA Under this Incentive Scheme, developers and building owners may be reimbursed up to
S$28,700 per square metre (psm) for the cost of constructing the parts of the Underground Pedestrian
Link (UPL) located under State land, and/or up to a maximum value of S$14,400 psm for the parts of a
link located under private land.
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7.2.5 Competition
Mandarin Gallerys competition is primarily malls in Orchard Road. Other retail malls such
as Raffles City and Marina Bay Shoppes are also competing against Mandarin Gallery for the
shopper dollars, however, the competition is mitigated as these other malls are located in
another retail micro-market (Marina Centre/Marina Bay cluster) and therefore operate in a
different trade area. Though the Marina Centre has emerged as another major district over
time and has over the years become a close rival, Orchard Road still retains its position as the
main shopping belt of Singapore.
Attributing to its seamless link to the Mandarin Orchard Singapore, unique location,
unprecedented street level prominence and tenancy strategy, Mandarin Gallery has effectively
limited its competition. The selected retail malls deemed competing against Mandarin Gallery
are summarized as follow:

Note:
1. Retail NLA excludes Isetan.
2. Retail NLA includes retail portion owned by Toshin Development Co. Ltd.
3. This is the value of the 74.23% stake (127,056 sf Retail and 98,889 sf Office) of the total share value
owned by Starhill Global REIT.
4. This is the value of the 27.33% stake (255,021 sf Retail and 139,165 sf Office) of the total share value
owned by Starhill Global REIT.
5. Valuation is as of Aug 2012.

Source: Developer website, Starhill Global REIT, CBRE

Key competitors are Knightsbridge, Paragon and Ngee Ann City which offer high end retail,
and are in close proximity to Mandarin Gallery. 313@Somerset is not of the same mall
positioning as Mandarin Gallery but it is situated adjacent to the latter. ION Orchard is a
keen competitor due to its vast product offering and development scale but it is located
ION Or char d Wisma Atr ia Knightsbr idge 313 Somer set Par agon Ngee Ann City
Near est MRT Orchard Orchard Orchard Somerset Orchard Orchard
Year Opened 2009 1986 2010 2009 1998 1993
Developer /
Management
CapitaLand
Limited & Sun
Hung Kai
Properties Limited
/ Orchard Turn
Developments Pte
Ltd
Starhill Global
REIT/YTL Starhill
Global Property
Management Pte
Ltd
Park Hotel Group
Lend Lease Retail
Pte Ltd
Singapore Press
Holding
Ngee Ann
Development Pte
Ltd, HSBC
Institutional Trust
Services Limited
Estimated Retail
NLA ( sf ) as at
31 Dec 2012
663,000 127,056
1
83,000 291,129 483,700 798,973
2
Mall
Occupancy as
at 31 Dec
2012
99.0% 99.5% 100% 100% 99.5% 100%
Valuation ( S$)
as at 31 Dec
2012
N.A. 902 million
3
N.A. N.A. 2,430 million
4
1,001 million
5
Estimated
Shopper Tr af f ic
54 million 27 million NA 36.5 million 20 million N.A
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further at the north end of the Orchard Road strip which can be viewed as another Orchard
Road sub-market.
According to our tracking of the future supply of retail space, The Heeren which is undergoing
asset enhancement work, the redevelopment of the former Orchard Emerald, Specialist
Shopping Centre and Phoenix Hotel into Orchardgateway and the redevelopment of 268
Orchard Road are projects coming on stream that may compete against Mandarin Gallery to
some extent. While the tenant mix at 268 Orchard Road remains unknown, limited
competition is expected from both The Heeren and Orchard Gateway as they are positioned
differently from Mandarin Gallery. Brief description of the competing and upcoming malls:
Ngee Ann City
The mall is part of the Ngee Ann City complex that also includes two office towers that are
both 26 storeys high. It has the longest frontage of all malls in Orchard Road and it is one of
Singapores large scale shopping centres that draws heavy shopper traffic with its good
location, underground link to Orchard MRT station, a wide variety of retailers and trades, and
several anchors. While it has a wide-ranging tenant mix from luxury labels to mid-range and
mass market brands, it has a prestigious image and is a top choice for designer flagship
stores. Louis Vuitton, Chanel, Celine, Alfred Dunhill, Tiffany and other designer labels are
currently located there. Its anchors are the Takashimaya department store, Kinokuniya, Best
Denki, Cold Storage, Food Village and the Crystal Jade Group of Restaurants. Its F&B ranges
from a food court to premium dining.
Wisma Atria
Completed in the late 80s, this mall is part of a building that also includes an office tower. It
has gradually evolved to be associated with womens fashion after its refurbishment in 1995,
and again in 2004, with another revamp to its faade. The latest round of refurbishment
work was completed in 2012, with enhancements in accessibility. Wisma Atria is strategically
located next to Orchard MRT station, directly linked at the basement level, thus enjoying
heavy pedestrian traffic going into the centre. Its anchors include GAP and Isetan department
store. Apart from the F&B outlets, other tenants are nearly all fashion names including Tony
Burch, Forever New, Dorothy Perkins, Coach and Charles & Keith.
Paragon
Paragon is an established upmarket shopping mall that opened in 1998. It is widely
recognised for the luxe-shopping ambience and commitment to branding, quality and style.
In 2003, it underwent expansion, and in 2008, it underwent a $82 million facelift which
included a $37 million premium to expand its commercial space which saw the addition of
three more floors of office and medical space as well as new retail stores. Also, the
makeover resulted in a contemporary and elegant faade, securing an even stronger
positioning as an upscale shopping mall with a diverse mix of international brands. Existing
tenants include first and second liners of fashion labels such as Gucci, Prada, Miu Miu, Jimmy
Choo, Anteprima, Karen Millen, Etro, Ermenegildo Zegna and Burberry. Metro hosts its only
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outlet along Orchard Road at Paragon, while Toys "R" Us, Marks and Spencer and Paragon
Market Place appeal to all shoppers. Paragon is within walking distance from both Orchard
and Somerset MRT stations, but there is no direct/covered links to the MRT stations.
Knightsbridge
Situated across Mandarin Gallery, Knightsbridge is a small scale four-storey retail podium
that houses several flagship stores. It offers about 83,000 sf of NLA and its tenants include
Abercrombie & Fitch, The Hour Glass, Topshop/Topman, Brooks Brothers, Dickson Watch
and Jewellery, Tommy Hilfiger, CIMB Bank and Pure Fitness. According to the mall website,
Knightsbridge aims to provide luxury at its finest and it offers customizable retail spaces with
double volume faade frontages and direct street access.
268 Orchard Road
This redevelopment is situated opposite Mandarin Gallery and is scheduled for building
completion in 2014. Formerly the Yen San Building, the property will yield about 90,000 sf
of retail NLA spread over 13 levels.
7.2.6 Outlook for Mandarin Gallery
Orchard Road will remain as the premier shopping belt in Singapore and we believe the
major stakeholders - Orchard Road building owners, the Singapore Tourism Board and the
Orchard Road Business Association will continue their concerted efforts to promote Orchard
Road. Evidently, the government has announced plans to convert Orchard Road into a
pedestrian street over time with all buildings/shopping centres on the street linked by an
underpass walkway. Such infrastructure improvement is deemed to enhance the shopping
experience and bring a new dimension to Orchard Road.
Whilst the Government may release more land parcels for retail developments in the longer
term, it is unlikely that there will be sizeable plots in Orchard Road. As such, immediate
competition stems from the existing malls and the known future Orchard Road supply.
Owners, developers and operators will sharply focus on mall sustainability as a long term
business goal. Most malls will continue its regular upgrading and asset enhancement works
to keep its space attractive and functional.
Overall, Mandarin Gallery stands out on its own due to its intimate size and unique retail
offering that is not replicated in other malls. Its strongest asset is its location and the
prominent street frontage which most other Orchard Road malls do not possess.
New to market foreign retailers and F&B operators continue to seek opportunities in
Singapore and the region, with many requesting prime locations in Orchard Road in their
maiden debut into Singapore. With a firm supply and stock of available retail space, we
anticipate occupancy rates in the well-managed Orchard Road malls to stay healthy. Rents
will likely remain resilient as supply is projected to be leading demand. At Mandarin Gallery,
effective mall programming and management is set to keep the mall attractive. Barring
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unforeseen market conditions, strong occupancy rates and rental increasing at an average of
3% per annum over the next 3 to 5 years can be expected.
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Contacts
Robert McIntosh
CBRE Pte. Ltd.
6 Battery Road #32-01 | Singapore (049909)
T 65 6224 8181 | F 65 6226 1606 | D 65 8123 0208
E-91
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APPENDIX F
INDEPENDENT TAXATION REPORT
(in its capacity as Manager of OUE Hospitality Real Estate Investment Trust) (the Manager)
333 Orchard Road
#33-00
Singapore 238867
(in its capacity as Trustee of OUE Hospitality Real Estate Investment Trust) (the Trustee)
20 Cecil Street
#28-01 Equity Plaza
Singapore 049705
(in its capacity as Trustee-Manager of OUE Hospitality Business Trust) (the Trustee-Manager)
333 Orchard Road
#33-00
Singapore 238867
18 July 2013
Dear Sirs
INDEPENDENT TAXATION REPORT
This letter has been prepared at the request of the Manager and the Trustee-Manager for inclusion
in the prospectus (the Prospectus) to be issued in relation to the initial public offering of the
stapled securities (the Stapled Securities) in OUE Hospitality Trust, a stapled group comprising
OUE Hospitality Real Estate Investment Trust (OUE H-REIT) and OUE Hospitality Business
Trust (OUE H-BT) on the Main Board of Singapore Exchange Securities Trading Limited.
The purpose of this letter is to provide prospective purchasers of the Stapled Securities with an
overview of the Singapore income tax consequences of the acquisition, ownership and disposal
of the Stapled Securities. This letter addresses principally purchasers who hold the Stapled
Securities as investment assets. Purchasers who acquire the Stapled Securities for dealing
purposes should consult their own tax advisers concerning the tax consequences of their
particular situations.
This letter is not a tax advice and does not attempt to describe comprehensively all the tax
considerations that may be relevant to a decision to purchase, own or dispose of the Stapled
Securities. Prospective purchasers of the Stapled Securities should consult their own tax advisers
to take into account the tax law applicable to their particular situations. In particular, prospective
purchasers who are not Singapore tax residents are advised to consult their own tax advisers to
take into account the tax laws of their respective country of tax residence and the existence of any
tax treaty which their country of tax residence may have with Singapore.
This letter is based on the Singapore income tax laws and the relevant interpretation thereof
current as at the date of this letter, all of which are subject to change, possibly with retroactive
effect.
F-1
Words and expressions defined in the Prospectus have the same meaning in this letter. In
addition, unless the context requires otherwise, words in the singular include the plural and the
other way around and words of one gender include the other gender.
GENERAL PRINCIPLES OF TAXATION OF A TRUST
The income of a trust derived from or accrued in Singapore is chargeable to Singapore income
tax. In addition, income earned outside Singapore and received or deemed received in Singapore
is also chargeable to Singapore income tax unless otherwise exempted. There is no capital gains
tax in Singapore. However, gains from the sale of investments (including real properties) are
chargeable to tax if such gains are derived from a trade or business of dealing in investments
(including real properties). Singapore income tax is imposed on all income chargeable to tax after
deduction of the allowable expenses incurred and capital allowances, if any (the Taxable
Income). The Taxable Income of the trust is assessed to tax in the name of the trustee at the
prevailing corporate tax rate.
However, where a trust derives tax-exempt income, the beneficiary of the trust is also exempt from
tax on the tax-exempt income of the trust to which he is beneficially entitled.
F-2
SINGAPORE TAXATION
The Tax Ruling
OUE H-REIT has obtained a Tax Ruling dated 6 June 2013 from the Inland Revenue Authority of
Singapore (IRAS). The IRAS has issued the Tax Ruling on the taxation of the property-related
income from the Properties derived by OUE H-REIT and the holders of the Stapled Securities.
Subject to the full compliance with the terms and conditions of the Tax Ruling, the Singapore
income tax consequences of OUE H-REIT and that of the holders of the Stapled Securities are
described below.
Taxation of OUE H-REIT
Property-related income from the Initial Portfolio
Subject to meeting the terms and conditions of the Tax Ruling, the REIT Trustee will not be taxed
on its property-related income chargeable to tax under the Income Tax Act after deduction of
allowable expenses and capital allowances, if any (Taxable Income). Instead, the REIT Trustee
and the REIT Manager would undertake to deduct income tax at the prevailing corporate tax rate
on distributions made to Stapled Securityholders that are made out of OUE H-REITs Taxable
Income in the financial year the income is derived. However, to the extent that the beneficial owner
is an individual or a qualifying Stapled Securityholder (Qualifying Stapled Securityholder), the
REIT Trustee and the REIT Manager will make the distributions without deducting any income tax.
Also, to the extent that the beneficial owner is a foreign non-individual Stapled Securityholder, the
REIT Trustee and the REIT Manager would undertake to deduct income tax at the reduced rate
of 10.0% for distributions made up to 31 March 2015.
A Qualifying Stapled Securityholder refers to a Stapled Securityholder who is:
a non-corporate entity (excluding a Singapore partnership) that is registered or constituted
in Singapore, such as:
(i) an institution, an authority, a person or a fund specified in the First Schedule of the
Income Tax Act;
(ii) a co-operative society registered under the Co-operative Societies Act, Chapter 62 of
Singapore;
(iii) a trade union registered under the Trade Unions Act, Chapter 333 of Singapore;
(iv) a charity registered under the Charities Act, Chapter 37 of Singapore or established by
an Act of Parliament; and
a Singapore branch of a foreign company which has obtained a letter of approval from the
IRAS granting a waiver from tax deducted at source in respect of distributions from OUE
H-REIT.
F-3
A foreign non-individual Stapled Securityholder is one who is not a resident of Singapore for
Singapore income tax purposes and:
who does not have a permanent establishment in Singapore; or
who carries on any operation in Singapore through a permanent establishment in Singapore,
where the funds used to acquire the Stapled Securities are not obtained from that operation
in Singapore.
To obtain distributions free of tax deduction at source, or at the reduced rate of 10.0%, Qualifying
Stapled Securityholders or foreign non-individual Stapled Securityholders must disclose their
respective tax status in a prescribed form provided by the REIT Trustee and the REIT Manager
(see Annexes A and B).
Where the Stapled Securities are held in joint names, the REIT Trustee and the REIT Manager will
deduct income tax from the distributions made out of OUE H-REITs Taxable Income to the
nominee at the prevailing corporate tax rate, unless all the joint owners are individuals.
Where the Stapled Securities are held through a nominee, the REIT Trustee and the REIT
Manager will deduct income tax from the distributions made out of OUE H-REITs Taxable Income
at the prevailing corporate tax rate except in certain circumstances, including:
owners who are individuals or Qualifying Stapled Securityholders for which the REIT Trustee
and the REIT Manager would not deduct any tax from the distributions. The nominee should
make a declaration of the status of the beneficial owners of the Stapled Securities and
provide certain particulars of the beneficial owners of the Stapled Securities to the REIT
Trustee and the REIT Manager in a prescribed form provided by the REIT Trustee and the
REIT Manager; and
owners who are foreign non-individual Stapled Securityholders, for which the REIT Trustee
and the REIT Manager would deduct/withhold tax at the reduced tax rate of 10.0% from
distributions made up to 31 March 2015. The nominee should make a declaration of the
status of the beneficial owners of the Stapled Securities and provide certain particulars of the
beneficial owners of the Stapled Securities to the REIT Trustee and the REIT Manager in a
prescribed form provided by the REIT Trustee and the REIT Manager.
OUE H-REIT will distribute 100% of its Taxable Income for the period from the Listing Date up to
31 December 2014. Thereafter, OUE H-REIT will distribute at least 90% of its Taxable Income
(other than gains on sale of real properties). Any amount of Taxable Income not distributed
(Retained Taxable Income) will be assessed to Singapore income tax at the prevailing corporate
tax rate, and the tax assessed will be collected from the REIT Trustee on such amount. In the
event of any subsequent distribution made out of such after tax Retained Taxable Income by OUE
H-REIT, the REIT Trustee and the REIT Manager will not have to make a further deduction of
income tax from the distribution made.
F-4
Terms and Conditions of the Tax Ruling
The application of the Tax Ruling is conditional upon the REIT Trustee and the REIT Manager
fulfilling certain terms and conditions. The REIT Trustee and the REIT Manager are required to
take all reasonable steps necessary to safeguard the IRAS against tax leakages and to comply
with all administrative requirements to ensure ease of tax administration.
The IRAS has expressly reserved the rights to review, amend and revoke the Tax Ruling either in
part or in whole at any time.
(See Risk Factors Risks Relating to an Investment in the Stapled Securities OUE H-REIT may
be unable to comply with the terms of the Tax Ruling or the Tax Ruling may be revoked or
amended for further details.)
Taxation of OUE H-BT
OUE H-BT which is registered as a business trust in Singapore under the BTA will be treated like
a company under the one-tier corporate tax system for Singapore income tax purposes.
Consequently, OUE H-BT will be assessed to Singapore income tax on its profits, if any, at the
prevailing corporate tax rate, like any other company, in accordance with the Income Tax Act.
Taxation of Stapled Securityholders
OUE H-REIT Distributions
Individuals who hold the Stapled Securities as investment assets
Individuals who hold the Stapled Securities as investment assets (excluding individuals who hold
such Stapled Securities through a partnership in Singapore) are exempt from Singapore income
tax on the distributions (excluding distributions made out of franked dividends) made by OUE
H-REIT, regardless of the individuals nationality or tax residence status.
Distributions made out of tax-exempt income and/or income previously taxed at the Trustee level
(i.e. distributions made out of Retained Taxable Income or out of gains or profits taxed as trading
gains under Section 10(1)(a) of the Income Tax Act) will also be exempt from tax in the hands of
such individuals.
confirmed by the IRAS as capital gains are not taxable in the hands of individual Stapled
Securityholders.
Singapore
Singapore are subject to Singapore income tax on the gross amount of distributions that are made
out of OUE H-REITs Taxable Income. Such distributions will be taxed in the hands of the
individuals at their applicable income tax rates.
received by the individual Stapled Securityholders.
F-5
confirmed by the IRAS as capital gains will also not be taxed in the hands of those individuals who
hold the Stapled Securities as trading assets.
Non-individuals
Non-individual Stapled Securityholders are subject to Singapore income tax on the gross amount
of distributions that are made out of OUE H-REITs Taxable Income, unless specifically exempted,
irrespective of whether or not tax has been deducted from the distributions by the REIT Manager
and the REIT Trustee.
Where tax has been deducted at source at the prevailing corporate tax rate (currently at 17.0%),
the tax deducted is not a final tax. Non-individual Stapled Securityholders can use such tax
deducted at source as a set off against their Singapore income tax liabilities.
received by the non-individual Stapled Securityholders.
confirmed by the IRAS as capital gains are not taxable in the hands of non-individual Stapled
Securityholders.
Distributions made by OUE H-REIT to foreign non-individual Stapled Securityholders will be
subject to tax at the reduced rate of 10.0% for distributions made up to 31 March 2015. The
reduced rate of 10.0% will also apply to distributions made to nominee Stapled Securityholders if
they can demonstrate that the beneficial owners of the Stapled Securities are qualifying foreign
non-individual investors.
OUE H-BT Distributions
Distributions made by OUE H-BT out of its profits, if any, to Stapled Securityholders will be treated
like one-tier dividends. Such distributions will be exempt from Singapore income tax in the hands
of Stapled Securityholders, regardless of their respective status.
Disposal of the Stapled Securities
Any gains on disposal of the Stapled Securities are not liable to tax provided the Stapled
Securities are not held as trading assets.
F-6
Other Relevant Taxes
Singapore GST
GST registration of OUE H-REIT
OUE H-REIT could be registered in Singapore for GST on the basis that it would derive rental
income from the leasing of the Hotel and the Mall in Singapore, which constitutes a taxable supply
for GST purposes.
GST registration of OUE H-BT
OUE H-BT could not be registered in Singapore for GST on the basis that it is currently dormant
and does not derive any taxable supplies. However, in the event that it subsequently undertakes
activities and derives taxable supplies, it would be eligible for GST registration.
Issue and transfer of Stapled Securities
The issue or transfer of ownership of a unit under any unit trust in Singapore is exempt from GST.
Hence, Stapled Securityholders would not incur any GST on the subscription of the Stapled
Securities. The subsequent disposal of the Stapled Securities by Stapled Securityholders is also
exempt from GST.
Recovery of GST incurred by Stapled Securityholders
Generally, services such as legal fee, brokerage, handling and clearing charges rendered by a
GST-registered person to Stapled Securityholders belonging in Singapore in connection with their
purchase and sale of the Stapled Securities would be subject to GST at the prevailing
standard-rate of 7.0%. Similar services rendered to Stapled Securityholders belonging outside
Singapore could be zero-rated when certain conditions are met.
For Stapled Securityholders belonging in Singapore who are registered for GST, any GST on
expenses incurred in connection with the subscription/acquisition or disposal of the Stapled
Securities is generally not recoverable as input tax credit from the IRAS unless certain conditions
are satisfied. These GST-registered Stapled Securityholders should seek the advice of their tax
advisors on these conditions.
Stamp Duty
By virtue of the Stamp Duty (Real Estate Investment Trust) (Remission) Rules 2010, stamp duty
on any contract or agreement or investment entered into prior to or on 31 March 2015 relating to
the transfer of Singapore properties; and 100% of the issued share capital of Singapore
incorporated companies that hold immovable properties situated outside Singapore to real estate
investment trusts to be listed or already listed on the SGX-ST would be remitted.
As such, stamp duty will be remitted on the contracts for the sale and purchase of Singapore
properties; and 100% of the issued share capital of Singapore incorporated companies that hold
immovable properties situated outside Singapore to OUE H-REIT where the contract or
agreement or investment was entered into prior to or on 31 March 2015.
The Commissioner of Stamp Duties has confirmed that based on certain terms of the OUE H-REIT
Trust Deed:
(a) the sale, purchase and transfer of the Stapled Securities is not subject to stamp duty; and
F-7
(b) in the event of a change in the REIT Trustee, stamp duty on any document effecting the
appointment of a new trustee and the transfer of trust assets from the incumbent trustee to
the new trustee will not be subject to stamp duty.
Property Taxes
Property tax is assessed on immovable property and is payable in advance in January by the
landowner or the registered leaseholder. It is generally computed as a percentage of the annual
value of all houses, land, buildings and tenements. The annual value is the gross amount at which
the property can reasonably be expected to be let from year to year having regard to the fact that
all outgoings and maintenance are borne by the landlord.
For hotel properties, property tax is payable at 10.0% of the total annual value of the hotel
property. Hotel properties generally comprise hotel rooms and other areas that are not used as
hotel rooms, such as F&B outlets, function rooms, retail shops and carparks, which are
assessable for property tax purposes.
The annual value of hotel rooms is assessed on a fixed percentage of gross hotel room receipts
for the preceding year. With effect from 1 January 2011, the annual value of hotel rooms will be
set at 25.0% of the preceding years gross room receipts.
The annual values of other areas assessable to tax are based on their estimated prevailing market
rentals, derived using valuation methods such as rental comparison or profits method. In
estimating the market rent of the property using market rents of comparable properties, the Chief
Assessor of the IRAS will take into account factors such as size, location, and other physical
attributes of the property.
Yours faithfully
Leonard Ong
Executive Director, Tax
KPMG Services Pte. Ltd.
F-8
To : [Unit registrar and unit transfer office]
ANNEX A
FORM A
DECLARATION FOR SINGAPORE TAX PURPOSES
) d e t n i r p e r p ( . o N t n u o c c A s e i t i r u c e S ) d e t n i r p e r p ( r e d l o h d e r e t s i g e r f o e m a N
) d e t n i r p e r p ( s t i n U : g n i d l o H ) d e t n i r p e r p ( s s e r d d A
Name of Counter: Stapled securities in OUE Hospitality Trust (comprising OUE Hospitality Real Estate
Investment Trust and OUE Hospitality Business Trust) (the "Stapled Securities")
Please read the following important notes carefully before completion of this Form:
1
(a)
(b)
(c)
(d)
(i)
(ii)
(iii)
(iv)
(v)
2
(a)
(b)
3
4
5
6
7
8
9
(a) has and habitually exercises an authority to conclude contracts;
(b) maintains stock of goods or merchandise for the purpose of delivery on its behalf; or
(c) habitually secures orders wholly and almost wholly for the unitholder or for such other enterprises as are controlled by the unitholder.
The Trustee and the Manager of OUE Hospitality Real Estate Investment Trust ("OUE H-REIT") will not deduct tax from
distributions made out of OUE H-REIT's taxable income that is not taxed at OUE H-REIT's level to:
Holders who are individuals and who hold the units either in their sole names or jointly with other individuals;
Holders which are companies incorporated and tax resident in Singapore;
Holders which are Singapore branches of foreign companies that have obtained specific approval from the Inland Revenue
Authority of Singapore to receive the distribution from OUE H-REIT without deduction of tax; or
charities registered under the Charities Act (Cap. 37) or established by an Act of Parliament; and
Holders which are non-corporate entities (excluding partnerships) constituted or registered in Singapore, such as:
institutions, authorities, persons or funds specified in the First Schedule to the Income Tax Act (Cap. 134);
co-operative societies registered under the Co-operative Societies Act (Cap. 62);
trade unions registered under the Trade Unions Act (Cap. 333);
Holders are required to complete the applicable Section A, B or C if they fall within the categories (b) to (d) stated under Note 1
or Section D if they qualify as a foreign non-individual investor as described under Note 2.
town councils.
The Trustee and the Manager of OUE H-REIT will rely on the declarations made in this Form to determine (i) if tax is to be
deducted for the categories of unitholders listed in (b) to (d) under Note 1; and (ii) if tax is to be deducted at the rate of 10% for
distributions to foreign non-individual investors. Please therefore ensure that the appropriate section of this Form is completed
in full and legibly and is returned to [Unit registrar and unit transfer office] within the stipulated time limit. Failure to comply with
any of these requirements will render this Form invalid and therefore, the Trustee and the Manager will be obliged to deduct tax
at the prevailing corporate tax rate from the distributions in respect of which this declaration is made.
Holders who do not fall within the classes of Unitholders listed in Note 1 and Note 2 above can choose not to return this Form
as tax will be deducted from the distributions made to them at the prevailing corporate tax rate in any case.
Holders who fall within class (a) under Note 1 are not required to submit this declaration form.
For taxable income distributions made to classes of holders that do not fall within the categories stated under Note 1 above, the
Trustee and the Manager of OUE H-REIT will deduct tax at the rate of 10%
@
if the holders are foreign non-individual investors.
A foreign non-individual investor is one who is not a resident of Singapore* for income tax purposes and:
who does not have a permanent establishment^ in Singapore; or
who carries on any operation in Singapore through a permanent establishment in Singapore, where the funds used to
acquire the Stapled Securities are not obtained from that operation.
(i) carries on supervisory activities in connection with a building or work site or a construction, installation or assembly project; or
(ii) has another person acting on the unitholder's behalf in Singapore who:
^ A permanent establishment is defined under Section 2 of the Income Tax Act to mean a fixed place where a business is wholly or partly carried on,
including a place of management, a branch, an office, a factory, a warehouse, a workshop, a farm or plantation, a mine, oil well, quarry or other place
of extraction of natural resources, a building or work site or a construction, installation or assembly project. A unitholder shall be deemed to have a
permanent establishment in Singapore if it:
Holders who hold the Stapled Securities jointly (where at least one of the joint holders is not an individual) or through nominees
do not have to return this Form.
Please make sure that the information given and the declaration made in this Form is true and correct. The making of a false or
incorrect declaration constitutes an offence under the Income Tax Act and the Declarant shall be liable to the appropriate
penalties imposed under the said Act.
This Form must be returned to [Unit registrar and unit transfer office] by [Time] on [Date].
* A company is not a resident of Singapore if the management and control of its business is exercised outside Singapore.
@ The concessionary rate of 10% will expire on 31 March 2015 unless extended.
F-9
ANNEX A1
DECLARATION FOR SINGAPORE TAX PURPOSES
Section A : To be completed by holder which is a Singapore incorporated company
Tick ( / ) either the "Yes" or "No" box Yes No
(a) the Company is incorporated in Singapore and its registration number is
- - ;
(b) the management and control of the Company's business for the preceding year and from the beginning
of this year to the date of this Declaration was exercised in Singapore and there is no intention, at the
time of this Declaration, to change the place of management and control of the Company to a
location outside Singapore; and
(c) the Company has previously filed tax returns with the Inland Revenue Authority of Singapore.
If your reply to (c) is "Yes", please proceed with (d) -
(d) the Company is declared as a tax resident of Singapore
#
based on the latest tax return filed
with the Inland Revenue Authority of Singapore.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ : e t a D _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ : t n a r a l c e D f o e r u t a n g i S
Contact No: ________________________
#
A company is tax resident in Singapore if the management and control of its business is exercised in Singapore.
Section B : To be completed by holder which is a Singapore branch of a foreign company
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ : e t a D _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ : t n a r a l c e D f o e r u t a n g i S
Contact No: ______________________
Section C : To be completed by holder which falls under Note 1(d)
- an institution, authority, person or fund specified in the First Schedule to the Income Tax Act (Cap. 134).
- a co-operative society registered under the Co-operative Societies Act (Cap. 62).
- a trade union registered under the Trade Unions Act (Cap. 333).
- a charity registered under the Charities Act (Cap. 37) or a charity established by an Act of Parliament.
- a town council.
- any other non-corporate entity (other than a partnership) constituted or registered in Singapore.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ : e t a D _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ : t n a r a l c e D f o e r u t a n g i S
Contact No : ___________________________
Section D : To be completed by holder which falls under Note 2
Tick ( / ) either the "Yes" or "No" box Yes No
(a) the Entity is not a resident of Singapore* for income tax purposes for the preceding year and from the
beginning of this year to the date of this Declaration and there is no intention, at the time of this Declaration,
to change the tax residence of the Entity to Singapore; and
(b) the Entity does not have a permanent establishment^ in Singapore.
If your reply to (b) is "No", please proceed with (c) -
(c) the funds used to acquire the holdings in the Stapled Securities are not obtained by the Entity from any
operation carried on in Singapore through a permanent establishment in Singapore.
Contact No : ___________________________
*/^ Please see front page.
I, ____________________________________, NRIC/Passport No. _________________________, the Director of
_________________________________________________ ("the Company") hereby declare that the Company is the beneficial owner of the
holdings stated above and that:
I, _________________________________, NRIC/Passport No. _________________, the manager of
_______________________________________________ (the "Singapore Branch") hereby declare that the Singapore Branch is the
beneficial owner of the holdings stated above and that the Inland Revenue Authority of Singapore has granted approval to the Singapore
Branch to receive distribution from OUE H-REIT without deduction of tax. A copy of the letter of approval dated _____________ is attached.
I, ___________________________, NRIC/Passport No. __________________, the principal officer of
__________________________________________________ ("the Entity") hereby declare that the Entity is the beneficial owner of the
holdings stated above and that the entity is (tick whichever is applicable):
I, ____________________________, NRIC/Passport No. _____________________, the Director/Principal Officer of
____________________________ (the "Entity") hereby declare that the Entity is the beneficial owner of the holdings stated above and that:
F-10
To : [Unit registrar and unit transfer office]
ANNEX B
FORM B
DECLARATION BY DEPOSITORY AGENTS FOR SINGAPORE TAX PURPOSES
) d e t n i r p e r p ( . o N t n u o c c A s e i t i r u c e S ) d e t n i r p e r p ( r e d l o h d e r e t s i g e r f o e m a N
) d e t n i r p e r p ( s t i n U : g n i d l o H ) d e t n i r p e r p ( s s e r d d A
Name of Counter: Stapled securities in OUE Hospitality Trust (comprising OUE Hospitality Real Estate Investment Trust and
OUE Hospitality Business Trust (the "Stapled Securities")
Please read the following important notes carefully before completion of this Form:
1
(i) individuals and the units are not held through a partnership in Singapore;
(ii) qualifying unitholders; or
(iii) foreign non-individual investors.
2
3 A "qualifying unitholder" refers to:
(i) a company incorporated and tax resident in Singapore;
(ii) non-corporate entities (excluding partnerships) constituted or registered in Singapore; such as
(a)
(b)
(c)
(d)
(e)
(iii)
4
(i) who does not have a permanent establishment^ in Singapore; or
(ii)
5
6
7
Declaration
Contact No : ___________________________
(a) has and habitually exercises an authority to conclude contracts;
(b) maintains stock of goods or merchandise for the purpose of delivery on its behalf; or
(c) habitually secures orders wholly and almost wholly for the unitholder or for such other enterprises as are controlled by the unitholder.
town councils.
(i) carries on supervisory activities in connection with a building or work site or a construction, installation or assembly project; or
(ii) has another person acting on the unitholder's behalf in Singapore who:
I, _________________________, NRIC/Passport No. ________________, the principal officer of ________________________________________________
("the Depository Agent") hereby declare that the Stapled Securities registered in the name of the Depository Agent and deposited in the sub-accounts
maintained with The Central Depository (Pte) Ltd, as listed in the Annexes B1 to B3 to this declaration, belonged beneficially to persons who are individuals,
qualifying unitholders (as defined in Note 3 above) and foreign non-individuals (as defined in Note 4 above), respectively. The details of each of these
beneficial owners are also listed in the respective Annexes.
We hereby also undertake to provide the actual amount of gross distribution made to each qualifying unitholder in the format provided in Annex B2.1 and to
email a soft copy of Annex B2.1 to [Unit registrar and unit transfer office] within 21 days from the date of the distribution.
* A company is a not resident of Singapore if the management and control of its business for the preceding year and from the beginning of this year to the date of this declaration
was exercised outside Singapore and there is no intention, at the time of this declaration, to change tax residence of the company to Singapore.
The Trustee and the Manager of OUE H-REIT will rely on the declarations made in this Form to determine the applicable rate at which tax is to be
deducted in respect of the Stapled Securities held by you in your capacity as a Depository Agent. Please therefore ensure that this Form and the
Annexes are completed in full and legibly and is returned to [Unit registrar and unit transfer office] within the stipulated time limit. Failure to comply with
any of these requirements will render this Form invalid and the Trustee and the Manager will deduct tax at the prevailing corporate tax rate from the
distributions in respect of which this declaration is made.
Please make sure that the information given and the declaration made in this Form is true and correct. The making of false or incorrect declaration
constitutes an offence under the Income Tax Act and the Declarant shall be liable to the appropriate penalties imposed under the said Act.
This Form, together with hard copy of the Annexes, must be returned to [Unit registrar and unit transfer office] by [Time] on [Date]. Please complete the
Annexes using the soft copy of the excel spreadsheet provided to you and also email a soft copy of the completed Annexes to [Unit registrar and unit
transfer office] at [Email] by [Time] on [Date]. Please note that it is compulsory to email the soft copy of the completed Annexes.
@ The concessionary rate of 10% will expire on 31 March 2015 unless extended.
^ A permanent establishment is defined under Section 2 of the Income Tax Act to mean a fixed place where a business is wholly or partly carried on, including a place of
management, a branch, an office, a factory, a warehouse, a workshop, a farm or plantation, a mine, oil well, quarry or other place of extraction of natural resources, a building or
work site or a construction, installation or assembly project. A unitholder shall be deemed to have a permanent establishment in Singapore if it:
a Singapore branch of a foreign company which has obtained from the Inland Revenue Authority of Singapore, a waiver from tax deducted at source
in respect of distributions from OUE H-REIT.
The Trustee and the Manager of OUE Hospitality Real Estate Investment Trust ("OUE H-REIT") will deduct tax at the prevailing corporate tax rate from
distributions made out of OUE H-REIT's taxable income, that is not taxed at OUE H-REIT's level, in respect of the Stapled Securities held by you in your
capacity as a Depository Agent except where the beneficial owners of these securities are:
who carries on any operation in Singapore through a permanent establishment in Singapore, where the funds used to acquire the Stapled
Securities are not obtained from that operation.
Tax will not be deducted for distributions made in respect of the Stapled Securities held by you for the benefit of unitholders who fall within categories (i)
and (ii) of Note 1. Tax will be deducted at the reduced rate of 10%
@
for distributions made in respect of the Stapled Securities held by you for the benefit
of foreign non-individuals.
A foreign non-individual is one who is not a resident in Singapore* for income tax purposes and:
institutions, authorities, persons or funds specified in the First Schedule to the Income Tax Act (Cap. 134);
co-operative societies registered under the Co-operative Societies Act (Cap. 62);
trade unions registered under the Trade Unions Act (Cap. 333);
charities registered under the Charities Act (Cap. 37) or established by an Act of Parliament; and
F-11
OUE HOSPITALITY TRUST
Annex B1
(comprising OUE Hospitality Real Estate Investment Trust and OUE Hospitality Business Trust)
Distribution Period:
Annex to Declaration Form B - Individuals
S/No. CDP Sub-Account No. Name of beneficiary holder(s) Identification No.* Number of units
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
* This refers to Singapore NRIC No., foreign ID No. or Passport No.
F-12
Annex B2
Annex to Declaration Form B - Qualifying unitholders
S/No. CDP Sub-Account No. Name of beneficiary holder(s) Registration No.* Number of units
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
* This refers to ROC / Tax Reference No.
F-13
Annex B2.1
Annex to Declaration Form B - Qualifying unitholders
S/No. CDP Sub-Account No. Name of beneficiary holder(s) Registration No.* Number of units
Gross distribution
paid
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
* This refers to ROC / Tax Reference No.
F-14
Annex B3
Annex to Declaration Form B - Foreign Non-Individuals
S/No. CDP Sub-Account No. Name of beneficiary holder(s) Address Number of units
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
F-15
APPENDIX G
TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION FOR AND
ACCEPTANCE OF THE STAPLED SECURITIES IN SINGAPORE
Applications are invited for the subscription of the Stapled Securities at the Offering Price on the
terms and conditions set out below and in the printed application forms to be used for the purpose
of the Offering and which forms part of the prospectus (the Application Forms) or, as the case
may be, the Electronic Applications (as defined below).
Investors applying for the Stapled Securities in the Offering by way of Application Forms or
Electronic Applications are required to pay in Singapore dollars, the Offering Price, subject to a
refund of the full amount or, as the case may be, the balance of the applications monies (in each
case without interest or any share of revenue or other benefit arising therefrom and without any
right or claim against the Joint Bookrunners) where (i) an application is rejected or accepted in
part only, or (ii) if the Offering does not proceed for any reason.
(1) Your application must be made in lots of 1,000 Stapled Securities or integral multiples
thereof. Your application for any other number of Stapled Securities will be rejected.
(2) You may apply for the Stapled Securities only during the period commencing at 6.00 p.m. on
18 July 2013 and expiring at 12.00 noon on 23 July 2013. The Public Offer period may be
extended or shortened to such date and/or time as the Managers may agree with the Joint
Bookrunners, subject to all applicable laws and regulations and the rules of the SGX-ST.
(3) Your application for the Stapled Securities offered in the Public Offer (the Public Offer
Stapled Securities), may be made by way of the printed WHITE Public Offer Stapled
Securities Application Form or by way of Automated Teller Machines (ATM) belonging to the
Participating Banks (ATM Electronic Applications), the Internet Banking (IB) website of
the Participating Banks, (Internet Electronic Applications), or through the mobile banking
platform of DBS Bank Ltd. (Mobile Banking Application, which, together with ATM
Electronic Applications and Internet Electronic Applications, shall be referred to as
Electronic Applications).
Your application for the Stapled Securities offered in the Placement Tranche (the Placement
Stapled Securities) may be made by way of the printed BLUE Placement Stapled
Securities Application Form or in such other manner as the Joint Bookrunners may in their
absolute discretion deem appropriate.
You must be in Singapore at the time of making the application for the Stapled
Securities. YOU MAY NOT USE YOUR CPF FUNDS TO APPLY FOR THE STAPLED
SECURITIES.
(4) Only one application may be made for the benefit of one person for the Public Offer
Stapled Securities in his own name. Multiple applications for the Public Offer Stapled
Securities will be rejected, except in the case of applications by approved nominee
companies where each application is made on behalf of a different beneficiary.
You may not submit multiple applications for the Public Offer Stapled Securities via
the Public Offer Stapled Securities Application Form, or Electronic Applications. A
person who is submitting an application for the Public Offer Stapled Securities by way
of the Public Offer Stapled Securities Application Form may not submit another
application for the Public Offer Stapled Securities by way of Electronic Applications
and vice versa.
G-1
A person, other than an approved nominee company, who is submitting an application
for the Public Offer Stapled Securities in his own name should not submit any other
applications for the Public Offer Stapled Securities, whether on a printed Public Offer
Stapled Securities Application Form or through an ATM Electronic Application,
Internet Electronic Application or Mobile Banking Application, for any other person.
Such separate applications will be deemed to be multiple applications and shall be
rejected.
Joint or multiple applications for the Public Offer Stapled Securities shall be rejected.
Persons submitting or procuring submissions of multiple applications for the Public
Offer Stapled Securities may be deemed to have committed an offence under the Penal
Code, Chapter 224 of Singapore and the SFA, and such applications may be referred
to the relevant authorities for investigation. Multiple applications or those appearing
to be or suspected of being multiple applications (other than as provided herein) will
be liable to be rejected at the discretion of the Managers.
(5) Multiple applications may be made in the case of applications by any person for (i) the
Placement Stapled Securities only (via Placement Stapled Securities Application
Forms or such other form of application as the Joint Bookrunners may in their
absolute discretion deem appropriate) or (ii) the Placement Stapled Securities
together with a single application for the Public Offer Stapled Securities.
(6) Applications from any person under the age of 18 years, undischarged bankrupts, sole
proprietorships, partnerships, non-corporate bodies, joint Securities Account holders of CDP
will be rejected.
(7) Applications from any person whose addresses (furnished in their printed Application Forms
or, in the case of Electronic Applications, contained in the records of the relevant
Participating Bank, as the case may be) bear post office box numbers will be rejected. No
person acting or purporting to act on behalf of a deceased person is allowed to apply under
the Securities Account with CDP in the deceaseds name at the time of the application.
(8) The existence of a trust will not be recognised. Any application by a trustee or trustees must
be made in his/her or their own name(s) and without qualification or, where the application
is made by way of a printed Application Form by a nominee, in the name(s) of an approved
nominee company or approved nominee companies after complying with paragraph 9 below.
(9) Nominee applications may only be made by approved nominee companies. Approved
nominee companies are defined as banks, merchant banks, finance companies, insurance
companies, licensed securities dealers in Singapore and nominee companies controlled by
them. Applications made by nominees other than approved nominee companies will be
rejected.
(10) If you are not an approved nominee company, you must maintain a Securities Account with
CDP in your own name at the time of your application. If you do not have an existing
Securities Account with the CDP in your own name at the time of application, your application
will be rejected (if you apply by way of an Application Form) or you will not be able to
complete your application (if you apply by way of an Electronic Application). If you have an
existing Securities Account with CDP but fail to provide your CDP Securities Account number
or provide an incorrect CDP Securities Account number in your Application Form or in your
Electronic Application, as the case may be, your application is liable to be rejected.
G-2
(11) Subject to paragraphs 14 and 15 below, your application is liable to be rejected if your
particulars such as name, National Registration Identity Card (NRIC) or passport number
or company registration number, nationality and permanent residence status, and CDP
Securities Account number provided in your Application Form, or in the case of an Electronic
Application, contained in the records of the relevant Participating Bank at the time of your
Electronic Application, as the case may be, differ from those particulars in your Securities
Account as maintained by CDP. If you have more than one individual direct Securities
Account with the CDP, your application shall be rejected.
(12) If your address as stated in the Application Form or, in the case of an Electronic
Application, contained in the records of the relevant Participating Bank, as the case
may be, is different from the address registered with CDP, you must inform CDP of
your updated address promptly, failing which the notification letter on successful
allocation from CDP will be sent to your address last registered with CDP.
(13) This Prospectus and its accompanying documents (including the Application Forms) have
not been registered in any jurisdiction other than in Singapore. The distribution of this
Prospectus and its accompanying documents (including the Application Forms) may be
prohibited or restricted (either absolutely or unless various securities requirements, whether
legal or administrative, are complied with) in certain jurisdictions under the relevant
securities laws of those jurisdictions.
Without limiting the generality of the foregoing, neither this Prospectus (including its
accompanying documents (including the Application Forms)) nor any copy thereof may be
taken, transmitted, published or distributed, whether directly or indirectly, in whole or in part
into the United States or any other jurisdiction (other than Singapore) and they do not
constitute an offer of securities for sale into the United States or any jurisdiction in which
such offer is not authorised or to any person to whom it is unlawful to make such an offer.
The Stapled Securities have not been and will not be registered under the Securities Act and,
may not be offered or sold within the United States (as defined in Regulation S) except
pursuant to an exemption from or in a transaction subject to, the registration requirements of
the Securities Act and applicable state securities laws. The Stapled Securities are being
offered and sold outside the United States (including to institutional and other investors in
Singapore) in reliance on Regulation S. There will be no public offer of Stapled Securities in
the United States. Any failure to comply with this restriction may constitute a violation of
securities laws in the United States and in other jurisdictions.
The Managers reserve the right to reject any application for Stapled Securities where
the Managers believe or have reason to believe that such applications may violate the
securities laws or any applicable legal or regulatory requirements of any jurisdiction.
No person in any jurisdiction outside Singapore receiving this Prospectus or its
accompanying documents (including the Application Forms) may treat the same as an offer
or invitation to subscribe for any Stapled Securities unless such an offer or invitation could
lawfully be made without compliance with any regulatory or legal requirements in those
jurisdictions.
(14) The Managers reserve the right to reject any application which does not conform strictly to
the terms and conditions set out in this Prospectus (including the instructions set out in the
accompanying Application Forms, in the ATMs, IB websites of the relevant Participating
Banks and the mobile banking interface of the relevant Participating Banks) or, in the case
of an application by way of an Application Form, the contents of which are illegible,
incomplete, incorrectly completed or which is accompanied by an improperly drawn up or
improper form of remittance.
G-3
(15) The Managers further reserve the right to treat as valid any applications not completed or
submitted or effected in all respects in accordance with the terms and conditions set out in
this Prospectus (including the instructions set out in the accompanying Application Forms
and in the ATMs, IB websites of the relevant Participating Banks and the mobile banking
interface of the relevant Participating Banks), and also to present for payment or other
processes all remittances at any time after receipt and to have full access to all information
relating to, or deriving from, such remittances or the processing thereof.
Without prejudice to the rights of the REIT Manager and the Trustee-Manager, each of the
Joint Bookrunners, as agents of the Managers, has been authorised to accept, for and on
behalf of the Managers, such other forms of application as the Joint Bookrunners may, in
consultation with the Managers, deem appropriate.
(16) The Managers reserve the right to reject or to accept, in whole or in part, or to scale down
or to ballot, any application, without assigning any reason therefore, and none of the REIT
Manager, the Trustee-Manager, and the Joint Bookrunners will entertain any enquiry and/or
correspondence on the decision of the Managers. This right applies to applications made by
way of Application Forms and by way of Electronic Applications and by such other forms of
application as the Joint Bookrunners may, in consultation with the Managers, deem
appropriate. In deciding the basis of allocation, the Managers, in consultation with the Joint
Bookrunners, will give due consideration to the desirability of allocating the Stapled
Securities to a reasonable number of applicants with a view to establishing an adequate
market for the Stapled Securities.
(17) In the event that the Managers lodge a supplementary or replacement prospectus (Relevant
Document) pursuant to the SFA or any applicable legislation in force from time to time prior
to the close of the Offering, and the Stapled Securities have not been issued, the Managers
will (as required by law) at the REIT Managers and the Trustee-Managers sole and absolute
discretion either:
(a) within two days (excluding any Saturday, Sunday or public holiday) from the date of the
lodgement of the Relevant Document, give you notice in writing of how to obtain, or
arrange to receive, a copy of the same and provide you with an option to withdraw your
application and take all reasonable steps to make available within a reasonable period
the Relevant Document to you if you have indicated that you wish to obtain, or have
arranged to receive, a copy of the Relevant Document; or
(b) within seven days of the lodgement of the Relevant Document, give you a copy of the
Relevant Document and provide you with an option to withdraw your application; or
(c) deem your application as withdrawn and cancelled and refund your application monies
(without interest or any share of revenue or other benefit arising therefrom) to you within
seven days from the lodgement of the Relevant Document.
Any applicant who wishes to exercise his option under paragraphs 17(a) and (b) above to
withdraw his application shall, within 14 days from the date of lodgement of the Relevant
Document, notify the Managers whereupon the Managers shall, within seven days from the
receipt of such notification, return all monies in respect of such application (without interest
or any share of revenue or other benefit arising therefrom and at his own risk).
G-4
In the event that the Stapled Securities have already been issued at the time of the
lodgement of the Relevant Document but trading has not commenced, the Managers will (as
required by law) either:
(i) within two days (excluding any Saturday, Sunday or public holiday) from the date of the
lodgement of the Relevant Document, give you notice in writing of how to obtain, or
arrange to receive, a copy of the same and provide you with an option to return to the
Managers the Stapled Securities which you do not wish to retain title in and take all
reasonable steps to make available within a reasonable period the Relevant Document
to you if you have indicated that you wish to obtain, or have arranged to receive, a copy
of the Relevant Document; or
(ii) within seven days from the lodgement of the Relevant Document, give you a copy of the
Relevant Document and provide you with an option to return the Stapled Securities
which you do not wish to retain title in; or
(iii) deem the issue as void and refund your payment for the Stapled Securities (without
interest or any share of revenue or other benefit arising therefrom) within seven days
from the lodgement of the Relevant Document.
Any applicant who wishes to exercise his option under paragraphs 17(i) and (ii) above to
return the Stapled Securities issued to him shall, within 14 days from the date of lodgement
of the Relevant Document, notify the Managers of this and return all documents, if any,
purporting to be evidence of title to those Stapled Securities, whereupon the Managers shall,
within seven days from the receipt of such notification and documents, pay to him all monies
paid by him for the Stapled Securities without interest or any share of revenue or other
benefit arising therefrom and at his own risk, and the Stapled Securities issued to him shall
be deemed to be void.
Additional terms and instructions applicable upon the lodgement of the Relevant Document,
including instructions on how you can exercise the option to withdraw, may be found in such
Relevant Document.
(18) The Stapled Securities may be reallocated between the Placement Tranche and the Public
Offer for any reason, including in the event of excess applications in one and a deficit of
applications in the other at the discretion of the Joint Bookrunners, in consultation with the
Managers.
(19) There will not be any physical security certificates representing the Stapled Securities. It is
expected that CDP will send to you, at your own risk, within 15 Market Days after the close
of the Offering, and subject to the submission of valid applications and payment for the
Stapled Securities, a statement of account stating that your Securities Account has been
credited with the number of Stapled Securities allocated to you. This will be the only
acknowledgement of application monies received and is not an acknowledgement by the
Managers. You irrevocably authorise CDP to complete and sign on your behalf as transferee
or renouncee any instrument of transfer and/or other documents required for the issue or
transfer of the Stapled Securities allocated to you. This authorisation applies to applications
made both by way of Application Forms and by way of Electronic Applications.
(20) You irrevocably authorise CDP to disclose the outcome of your application, including the
number of Stapled Securities allocated to you pursuant to your application, to the Managers,
the Joint Bookrunners and any other parties so authorised by CDP, the REIT Manager, the
Trustee-Manager and/or the Joint Bookrunners.
G-5
(21) Any reference to you or the Applicant in this section shall include an individual, a
corporation, an approved nominee company and trustee applying for the Stapled Securities
by way of an Application Form or by way of Electronic Application or by such other manner
as the Joint Bookrunners may, in their absolute discretion, deem appropriate.
(22) By completing and delivering an Application Form and, in the case of an ATM Electronic
Application, by pressing the Enter or OK or Confirm or Yes key or any other relevant
key on the ATM or, in the case of an Internet Electronic Application or Mobile Banking
Application, by clicking Submit or Continue or Yes or Confirm or any other button on
the IB website screen (as the case may be) in accordance with the provisions herein, you:
(a) irrevocably agree and undertake to purchase the number of Stapled Securities specified
in your application (or such smaller number for which the application is accepted) at the
Offering Price for each Stapled Security and agree that you will accept such number of
Stapled Securities as may be allocated to you, in each case on the terms of, and subject
to the conditions set out in, the Prospectus and its accompanying Application Forms and
the OUE H-REIT Trust Deed, the OUE H-BT Trust Deed and the Stapling Deed;
(b) agree that, in the event of any inconsistency between the terms and conditions for
application set out in this Prospectus and its accompanying documents (including the
Application Forms) and those set out in the IB websites or ATMs or mobile banking
interface of the Participating Banks, the terms and conditions set out in this Prospectus
and its accompanying documents (including the Application Forms) shall prevail;
(c) agree that the Offering Price for the Stapled Securities applied for is due and payable
to the Managers upon application;
(d) warrant the truth and accuracy of the information contained, and representations and
declarations made, in your application, and acknowledge and agree that such
information, representations and declarations will be relied on by the Managers in
determining whether to accept your application and/or whether to allocate any Stapled
Securities to you;
(e) agree and warrant that, if the laws of any jurisdictions outside Singapore are applicable
to your application, you have complied with all such laws and none of the Managers nor
any of the Joint Bookrunners will infringe any such laws as a result of the acceptance
of your applications;
(f) agree and confirm that you are outside the United States; and
(g) understand that the Stapled Securities have not been and will not be registered under
the Securities Act or the securities laws of any state of the United States and may not
be offered or sold in the United States except pursuant to an exemption from or in a
transaction not subject to the registration requirements of the Securities Act and
applicable state securities laws. There will be no public offer of the Stapled Securities
in the United States. Any failure to comply with this restriction may constitute a violation
of the United States securities laws.
G-6
(23) Acceptance of applications will be conditional upon, inter alia, the Managers being satisfied
that:
(a) permission has been granted by the SGX-ST to deal in and for the quotation of (i) all the
all the Cornerstone Stapled Securities, and (iv) all the Stapled Securities which will be
issued to the Managers from time to time in full or part payment of the REIT Managers
and the Trustee-Managers fees (including the Stapled Securities which may be issued
to the Managers from time to time in full or part payment of the REIT Managers and the
Trustee-Managers fees) on the Main Board of the SGX-ST;
(b) the Underwriting Agreement, referred to in the section on Plan of Distribution in this
Prospectus, has become unconditional and has not been terminated; and
(c) the Authority has not served a stop order which directs that no or no further Stapled
Securities to which this Prospectus relates be allotted or issued (Stop Order).
(24) In the event that a Stop Order in respect of the Stapled Securities is served by the Authority
or other competent authority, and:
(a) the Stapled Securities have not been issued (as required by law), all applications shall
be deemed to be withdrawn and cancelled and the Managers shall refund the
application monies (without interest or any share of revenue or other benefit arising
therefrom or claim against the Managers) to you within 14 days of the date of the Stop
Order; or
(b) if the Stapled Securities have already been issued but trading has not commenced, the
issue will (as required by law) be deemed void and the Managers shall refund your
payment for the Stapled Securities (without interest or any share of revenue or other
benefit arising therefrom or claim against the Managers) to you within 14 days from the
date of the Stop Order.
This shall not apply where only an interim Stop Order has been served.
(25) In the event that an interim Stop Order in respect of the Stapled Securities is served by the
Authority or other competent authority, no Stapled Securities shall be issued to you until the
Authority revokes the interim Stop Order.
(26) An interim Stop Order may be served by the Authority where the Authority is of the opinion
that any delay in serving a Stop Order pending the holding of a hearing required under
Section 282E(4) or Section 297(3) of the SFA (the Hearing) is not in the interests of the
public. In such event, the Authority may, without giving an opportunity to be heard, serve an
interim Stop Order on the Managers directing that no or no further Stapled Securities be
allotted or issued. Such interim Stop Order shall, unless revoked by the Authority, be in force
(a) until the Authority makes an order for a Stop Order where (i) the interim Stop Order was
served during a Hearing or (ii) a Hearing was commenced while the Stop Order was in force,
and (b) in any other case, for a period of 14 days from the day on which the interim Stop
Order is served. The Authority is not able to serve a Stop Order in respect of the Stapled
Securities if the Stapled Securities have been issued and listed on the SGX-ST and trading
in them has commenced.
(27) Additional terms and conditions for applications by way of Application Forms are set out in
the section below Additional Terms and Conditions for Applications using Printed Application
Forms on pages G-8 to G-12 of this Prospectus.
G-7
(28) Additional terms and conditions for applications by way of Electronic Applications are set out
in the section below Additional Terms and Conditions for Electronic Applications on pages
G-12 to G-20 of this Prospectus.
(29) All payments in respect of any application for Stapled Securities, and all refunds where (a)
an application is rejected or accepted in part only, or (b) the Offering does not proceed for
any reason, shall be made in Singapore dollars.
(30) No application will be held in reserve.
(31) This Prospectus is dated 18 July 2013. No Stapled Securities shall be allotted or allocated
on the basis of this Prospectus later than 12 months after the date of this Prospectus.
(32) In the event of any changes in the closing date of the Public Offer or the time period during
which the Public Offer is opened, the Managers will publicly announce the same through a
SGXNET announcement to be posted on the Internet at the SGX-ST website
http://www.sgx.com or through a paid advertisement in one or more major Singapore
newspapers.
Additional Terms and Conditions for Applications Using Printed Application Forms
Applications by way of an Application Form shall be made on, and subject to the terms and
conditions of this Prospectus, including but not limited to the terms and conditions set out below,
as well as those set out under the section Terms, Conditions and Procedures for Application for
and Acceptance of the Stapled Securities in Singapore on pages G-1 to G-21 of this Prospectus
and the OUE H-REIT Trust Deed, the OUE H-BT Trust Deed and the Stapling Deed.
(1) Applications for the Public Offer Stapled Securities must be made using the printed WHITE
Public Offer Stapled Securities Application Form and printed WHITE official envelopes A
and B, accompanying and forming part of this Prospectus.
Applications for the Placement Stapled Securities may be made using the printed BLUE
Placement Stapled Securities Application Form accompanying and forming part of this
Prospectus (or in such manner as the Joint Bookrunners may in their absolute discretion
deem appropriate).
Without prejudice to the rights of the REIT Manager, the Trustee-Manager and the Joint
Bookrunners, the Joint Bookrunners as agents of the Managers, have been authorised to
accept, for and on behalf of the Managers, such other forms of application, as the Joint
Bookrunners may (in consultation with the Managers) deem appropriate.
Your attention is drawn to the detailed instructions contained in the Application Forms and
this Prospectus for the completion of the Application Forms, which must be carefully
followed. The Managers reserve the right to reject applications which do not conform
strictly to the instructions set out in the Application Forms and this Prospectus, which
are illegible, incomplete, incorrectly completed or which are accompanied by
improperly drawn remittances or improper form of remittances.
(2) You must complete your Application Forms in English. Please type or write clearly in ink
using BLOCK LETTERS.
(3) You must complete all spaces in your Application Forms except those under the heading
FOR OFFICIAL USE ONLY and you must write the words NOT APPLICABLE or N.A.
in any space that is not applicable.
G-8
(4) Individuals, corporations, approved nominee companies and trustees must give their names
in full. If you are an individual, you must make your application using your full name as it
appears on your NRIC (if you have such an identification document) or in your passport and,
in the case of a corporation, in your full name as registered with a competent authority. If you
are not an individual, you must complete the Application Form under the hand of an official
who must state the name and capacity in which he signs the Application Form. If you are a
corporation completing the Application Form, you are required to affix your common seal (if
any) in accordance with your Memorandum and Articles of Association or equivalent
constitutive documents of the corporation. If you are a corporate applicant and your
application is successful, a copy of your Memorandum and Articles of Association or
equivalent constitutive documents must be lodged with the Unit Registrar. The Managers
reserve the right to require you to produce documentary proof of identification for verification
purposes.
(5) (a) You must complete Sections A and B and sign page 1 of the Application Form.
(b) You are required to delete either paragraph 7(c) or 7(d) on page 1 of the Application
Form. Where paragraph 7(c) is deleted, you must also complete Section C of the
Application Form with particulars of the beneficial owner(s).
(c) If you fail to make the required declaration in paragraph 7(c) or 7(d), as the case may
be, on page 1 of the Application Form, your application is liable to be rejected.
(6) You (whether an individual or corporate applicant, whether incorporated or unincorporated
and wherever incorporated or constituted) will be required to declare whether you are a
citizen or permanent resident of Singapore or a corporation in which citizens or permanent
residents of Singapore or any body corporate constituted under any statute of Singapore
have an interest in the aggregate of more than 50 per cent. of the issued share capital of or
interests in such corporation. If you are an approved nominee company, you are required to
declare whether the beneficial owner of the Stapled Securities is a citizen or permanent
resident of Singapore or a corporation, whether incorporated or unincorporated and
wherever incorporated or constituted, in which citizens or permanent residents of Singapore
or any body corporate incorporated or constituted under any statute of Singapore have an
interest in the aggregate of more than 50 per cent. of the issued share capital of or interests
in such corporation.
(7) You may apply and make payment for your application for the Stapled Securities in
Singapore currency in cash only.
Each application must be accompanied by a cash remittance in Singapore currency for the
full amount payable in Singapore dollars of the Offering Price of S$0.88, in respect of the
number of Stapled Securities applied for. The remittance must in the form of a BANKERS
DRAFT or CASHIERS ORDER drawn on a bank in Singapore, made out in favour of OUE
H-REIT MGT PL-OUE H-TRUST OFFER AC crossed A/C PAYEE ONLY with your name,
CDP Securities Account number and address written clearly on the reverse side. Applications
not accompanied by any payment or accompanied by any other form of payment will not be
accepted. No combined Bankers Draft or Cashiers Order for different CDP Securities
Accounts shall be accepted. Remittances bearing NOT TRANSFERABLE or
NON-TRANSFERABLE crossings will be rejected.
No acknowledgement of receipt will be issued for applications and application monies
received.
G-9
(8) Monies paid in respect of unsuccessful applications are expected to be returned (without
interest or any share of revenue or other benefit arising therefrom) to you by ordinary post,
in the event of oversubscription for the Stapled Securities, within 24 hours of the balloting (or
such shorter period as the SGX-ST may require), at your own risk. Where your application
is rejected or accepted or in part only, the full amount or the balance of the application
monies as the case may be, will be refunded (without interest or any share of revenue or
other benefit arising therefrom) to you by ordinary post at your own risk within 14 Market
Days after the close of the Offering, PROVIDED THAT the remittance accompanying such
application which has been presented for payment or other processes has been honoured
and the application monies received in the designated security issue account. If the Offering
does not proceed for any reason, the full amount of application monies (without interest or
any share of revenue or other benefit arising therefrom) will be returned to you within three
Market Days after the Offering is discontinued.
(9) Capitalised terms used in the Application Forms and defined in this Prospectus shall bear the
meanings assigned to them in this Prospectus.
(10) By completing and delivering the Application Forms, you agree that:
(a) in consideration of the Managers having distributed the Application Form to you and by
completing and delivering the Application Form before the close of the Offering:
(i) your application is irrevocable;
(ii) your remittance will be honoured on first presentation and that any monies
returnable may be held pending clearance of your payment without interest or any
share of revenue or other benefit arising therefrom; and
(iii) you represent and agree that you are located outside the United States;
(b) all applications, acceptances or contracts resulting therefrom under the Offering shall
be governed by and construed in accordance with the laws of Singapore and that you
irrevocably submit to the non-exclusive jurisdiction of the Singapore courts;
(c) in respect of the Stapled Securities for which your application has been received and
not rejected, acceptance of your application shall be constituted by written notification
by or on behalf of the Managers and not otherwise, notwithstanding any remittance
being presented for payment by or on behalf of the Managers;
(d) you will not be entitled to exercise any remedy of rescission for misrepresentation at
any time after acceptance of your application;
(e) reliance is placed solely on information contained in this Prospectus and that none of
the REIT Manager, the Trustee-Manager, the Sponsor, the Joint Bookrunners or any
other person involved in the Offering shall have any liability for any information not
contained therein;
(f) you consent to the disclosure of your name, NRIC/passport number or company
registration number, address, nationality, permanent resident status, Securities Account
number, and Stapled Security application amount to our Unit Registrar, CDP, Securities
Clearing Computer Services (Pte) Ltd (SCCS), the SGX-ST, the REIT Manager, the
Trustee-Manager and the Joint Bookrunners (the Relevant Parties); and
G-10
(g) you irrevocably agree and undertake to purchase the number of Stapled Securities
applied for as stated in the Application Form or any smaller number of such Stapled
Securities that may be allocated to you in respect of your application. In the event that
the Managers decide to allocate any smaller number of Stapled Securities or not to
allocate any Stapled Securities to you, you agree to accept such decision as final.
Procedures Relating to Applications for the Public Offer Stapled Securities by Way of
Printed Application Forms
(1) Your application for the Public Offer by way of printed Application Forms must be made using
the WHITE Public Offer Stapled Securities Application Forms and WHITE official envelopes
A and B.
(2) You must:
(a) enclose the WHITE Public Offer Stapled Securities Application Form, duly completed
and signed, together with correct remittance for the full amount payable at the Offering
Price in Singapore currency in accordance with the terms and conditions of this
Prospectus and its accompanying documents, in the WHITE official envelope A
provided;
(b) in appropriate spaces on the WHITE official envelope A:
(i) write your name and address;
(ii) state the number of Public Offer Stapled Securities applied for; and
(iii) tick the relevant box to indicate form of payment;
(c) SEAL THE WHITE OFFICIAL ENVELOPE A;
(d) write, in the special box provided on the larger WHITE official envelope B addressed
to Boardroom Corporate & Advisory Services Pte. Ltd., 50 Raffles Place, #32-01
Singapore Land Tower, Singapore 048623, the number of Public Offer Stapled
Securities you have applied for;
(e) insert the WHITE official envelope A into the WHITE official envelope B and seal the
WHITE OFFICIAL ENVELOPE B; and
(f) affix adequate Singapore postage on the WHITE official envelope B (if dispatching by
ordinary post) and thereafter DESPATCH BY ORDINARY POST OR DELIVER BY
HAND the documents at your own risk to Boardroom Corporate & Advisory Services
Pte. Ltd., 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623, so as
to arrive by 12.00 noon on 23 July 2013 or such other date(s) and time(s) as the
Managers may agree with the Joint Bookrunners. Courier services or Registered
Post must NOT be used.
(3) Applications that are illegible, incomplete or incorrectly completed or accompanied by
improperly drawn remittances or which are not honoured upon their first presentation are
liable to be rejected. Except for application for the Placement Stapled Securities where
remittance is permitted to be submitted separately, applications for the Public Offer Stapled
Securities not accompanied by any payment or any other form of payment will not be
accepted.
G-11
(4) ONLY ONE APPLICATION should be enclosed in each envelope. No acknowledgement of
receipt will be issued for any application or remittance received.
Procedures Relating to Applications for the Placement Stapled Securities by Way of Printed
Application Forms
(1) Your application for the Placement Stapled Securities by way of printed Application Forms
must be made using the BLUE Placement Stapled Securities Application Forms.
(2) The completed and signed BLUE Placement Stapled Securities Application Form and your
remittance, in accordance with the terms and conditions of this Prospectus, for the full
amount payable at the Offering Price, as the case may be, for each Stapled Security in
respect of the number of Placement Stapled Securities applied for, with your name, CDP
Securities Account number and address clearly written on the reverse side, must be enclosed
and sealed in an envelope to be provided by you. Your application for Placement Stapled
Securities must be delivered to Boardroom Corporate & Advisory Services Pte. Ltd., 50
Raffles Place, #32-01 Singapore Land Tower, Singapore 048623, to arrive by 12.00 p.m.
on 23 July 2013 or such other date(s) and time(s) as the Managers may agree with the Joint
Bookrunners. Courier services or Registered Post must NOT be used.
(3) Applications that are illegible, incomplete or incorrectly completed or accompanied by
improperly drawn remittances or which are not honoured upon their first presentation are
liable to be rejected.
(4) ONLY ONE APPLICATION should be enclosed in each envelope. No acknowledgement of
receipt will be issued for any application or remittance received.
Additional Terms and Conditions for Electronic Applications
Electronic Applications shall be made on and subject to the terms and conditions of this
Prospectus, including but not limited to the terms and conditions set out below and those under
the section Terms, Conditions and Procedures for Application for and Acceptance of the Stapled
Securities in Singapore on pages G-1 to G-21 of this Prospectus, as well as the OUE H-REIT
Trust Deed, the OUE H-BT Trust Deed and the Stapling Deed.
(1) The procedures for Electronic Applications are set out on the ATM screens of the relevant
Participating Banks (in the case of ATM Electronic Applications), the IB website screens of
the relevant Participating Banks (in the case of Internet Electronic Applications) and the
mobile banking interface of the relevant Participating Banks (in the case of Mobile Banking
Applications). Currently, DBS Bank Ltd. is the only Participating Bank through which Mobile
Banking Applications may be made.
(2) For illustration purposes, the procedures for Electronic Applications for Public Offer Stapled
Securities through the ATMs and the IB website of OCBC Bank (together the Steps) are set
out in pages G-18 to G-21 of this Prospectus. The Steps set out the actions that you must
take at ATMs and the IB website of OCBC Bank to complete an Electronic Application. The
actions that you must take at the ATMs, the IB websites or the mobile banking interface of
the other Participating Banks are set out on the ATM screens, the IB website screens or the
mobile banking screens of the respective Participating Banks.
Please read carefully the terms and conditions of this Prospectus and its accompanying
documents (including the Application Forms), the Steps and the terms and conditions for
Electronic Applications set out below before making an Electronic Application.
G-12
Applicants applying for Public Offer Stapled Securities by way of Electronic Applications may
incur an administrative fee and/or such related charges as stipulated by the respective
Participating Banks from time to time.
(3) Any reference to you or the Applicant in these Additional Terms and Conditions for
Electronic Applications and the Steps shall refer to you making an application for Public Offer
Stapled Securities through an ATM of one of the relevant Participating Banks or the IB
website of a relevant Participating Bank or the mobile banking interface of DBS Bank Ltd.
(4) If you are making an ATM Electronic Application:
(a) You must have an existing bank account with and be an ATM cardholder of the relevant
Participating Banks. An ATM card issued by one Participating Bank cannot be used to
apply for Public Offer Stapled Securities at an ATM belonging to other Participating
Banks.
(b) You must ensure that you enter your own CDP Securities Account number when using
the ATM card issued to you in your own name. If you fail to use your own ATM card or
do not key in your own CDP Securities Account number, your application will be
rejected. If you operate a CDP joint bank account with any of the Participating Banks,
you must ensure that you enter your own Securities Account number when using the
ATM card issued to you in your own name. Using your own CDP Securities Account
number with an ATM card which is not issued to you in your own name will render your
Electronic Application liable to be rejected.
(c) Upon the completion of your ATM Electronic Application, you will receive an ATM
transaction slip (Transaction Record), confirming the details of your ATM Electronic
Application. The Transaction Record is for your retention and should not be submitted
with any printed Application Form.
(5) If you are making an Internet Electronic Application or a Mobile Banking Application:
(a) You must have an existing bank account with, and a User Identification (User ID) as
well as a Personal Identification Number (PIN) given by the relevant Participating
Bank.
(b) You must ensure that the mailing address of your account selected for the application
is in Singapore and you must declare that the application is being made in Singapore.
Otherwise, your application is liable to be rejected. In connection with this, you will be
asked to declare that you are in Singapore at the time you make the application.
(c) Upon the completion of your Internet Electronic Application through the IB website of
the relevant Participating Bank or the mobile banking interface of DBS Bank Ltd., there
will be an on-screen confirmation (Confirmation Screen) of the application which can
be printed out by you for your record. This printed record of the Confirmation Screen is
for your retention and should not be submitted with any printed Application Form.
G-13
(6) In connection with your Electronic Application for Public Offer Stapled Securities, you are
required to confirm statements to the following effect in the course of activating the Electronic
Application:
(a) that you have received a copy of the Prospectus and its accompanying documents (in
the case of ATM Electronic Applications) and have read, understood and agreed to all
the terms and conditions of application for the Public Offer Stapled Securities and the
Prospectus prior to effecting the Electronic Application and agree to be bound by the
same;
(b) that you consent to the disclosure of your name, NRIC/passport number, address,
nationality, permanent resident status, CDP Securities Account number and Public Offer
Stapled Security application amount (the Relevant Particulars) from your account
with the relevant Participating Bank to the Relevant Parties; and
(c) where you are applying for the Public Offer Stapled Securities, that this is your only
application for the Public Offer Stapled Securities and it is made in your name and at
your own risk.
Your application will not be successfully completed and cannot be recorded as a completed
transaction unless you press the Enter or OK or Confirm or Yes or any other relevant
key in the ATM or click Confirm or OK or Submit or Continue or Yes or any other
relevant button on the website screen or mobile banking interface. By doing so, you shall be
treated as signifying your confirmation of each of the three statements above. In respect of
statement 6(b) above, your confirmation, by pressing the Enter or OK or Confirm or
Yes or any other relevant key in the ATM or clicking Confirm or OK or Submit or
Continue or Yes or any other relevant button on the website screen or mobile banking
interface, shall signify and shall be treated as your written permission, given in accordance
with the relevant laws of Singapore, including Section 47(2) of the Banking Act, Chapter 19
of Singapore, to the disclosure by that Participating Bank of the Relevant Particulars of your
account(s) with that Participating Bank to the Relevant Parties.
By making an Electronic Application you confirm that you are not applying for the Public Offer
Stapled Securities as a nominee of any other person and that any Electronic Application that
you make is the only application made by you as the beneficial owner. You shall make only
one Electronic Application for the Public Offer Stapled Securities and shall not make any
other application for the Public Offer Stapled Securities whether at the ATMs of any
Participating Bank, the IB websites of the relevant Participating Banks or the mobile banking
interface of DBS Bank Ltd. or on the Application Forms. Where you have made an application
for Public Offer Stapled Securities on an Application Form, you shall not make an Electronic
Application for Public Offer Stapled Securities and vice versa.
(7) You must have sufficient funds in your bank account with your Participating Bank at the time
you make your ATM Electronic Application, Internet Electronic Application or Mobile Banking
Application, failing which such Electronic Application will not be completed. Any ATM
Electronic Application, Internet Electronic Application or Mobile Banking Application which
does not conform strictly to the instructions set out in this Prospectus and its accompanying
documents or on the screens of the ATMs or on the IB website of the relevant Participating
Bank or the mobile banking interface of DBS Bank Ltd., as the case may be, through which
your ATM Electronic Application or Internet Electronic Application or Mobile Banking
Application is being made shall be rejected.
G-14
(8) You may apply and make payment for your application for the Public Offer Stapled Securities
in Singapore currency in cash only.
You may apply for the Public Offer Stapled Securities through any ATM or IB website of your
Participating Bank or the mobile banking interface of DBS Bank Ltd. (as the case may be) by
authorising your Participating Bank to deduct the full amount payable from your bank
account(s) with such Participating Bank.
(9) You irrevocably agree and undertake to subscribe for and to accept the number of Public
Offer Stapled Securities applied for as stated on the Transaction Record or the Confirmation
Screen or any lesser number of such Public Offer Stapled Securities that may be allocated
to you in respect of your Electronic Application. In the event that the Managers decide to
allocate any lesser number of such Public Offer Stapled Securities or not to allocate any
Public Offer Stapled Securities to you, you agree to accept such decision as final. If your
Electronic Application is successful, your confirmation (by your action of pressing the Enter
or OK or Confirm or Yes or any other relevant key in the ATM or clicking Confirm or
OK or Submit or Continue or Yes or any other relevant button on the IB website screen
or on the mobile banking interface) of the number of Public Offer Stapled Securities applied
for shall signify and shall be treated as your acceptance of the number of Public Offer Stapled
Securities that may be allocated to you and your agreement to be bound by the OUE H-REIT
Trust Deed, the OUE H-BT Trust Deed and the Stapling Deed.
(10) The Managers will not keep any application in reserve. Where your Electronic Application is
unsuccessful, the full amount of the application monies will be returned (without interest or
any share of revenue or other benefit arising therefrom) to you by being automatically
credited to your account with your Participating Bank, within 24 hours of the balloting (or
such shorter period as the SGX-ST may require) provided that the remittance in respect of
such application which has been presented for payment or other processes has been
honoured and the application monies received in the designated security issue account.
Where your Electronic Application is accepted or rejected in full or in part only, the balance
of the application monies, as the case may be, will be returned (without interest or any share
of revenue or other benefit arising therefrom) to you by being automatically credited to your
account with your Participating Bank, within 14 Market Days after the close of the Offering
provided that the remittance in respect of such application which has been presented for
payment or other processes has been honoured and the application monies received in the
designated security issue account.
If the Offering does not proceed for any reason, the full amount of application monies
(without interest or any share of revenue or other benefit arising therefrom) will be returned
to you within three Market Days after the Offering is discontinued.
Responsibility for timely refund of application monies (whether from unsuccessful or partially
successful Electronic Applications or otherwise) lies solely with the respective Participating
Banks. Therefore, you are strongly advised to consult your Participating Bank as to the status
of your Electronic Application and/or the refund of any money to you from an unsuccessful
or partially successful Electronic Application, to determine the exact number of Public Offer
Stapled Securities, if any, allocated to you before trading the Stapled Securities on the
SGX-ST. None of the SGX-ST, CDP, SCCS, the Participating Banks, the REIT Manager, the
Trustee-Manager, and the Joint Bookrunners assume any responsibility for any loss that may
be incurred as a result of you having to cover any net sell positions or from buy-in procedures
activated by the SGX-ST.
(11) If your Electronic Application is unsuccessful, no notification will be sent by the relevant
Participating Bank.
G-15
(12) Applicants who make ATM Electronic Applications through the ATMs of the following
Participating Banks may check the provisional results of their ATM Electronic Applications as
follows:
Bank Telephone Other Channels
Operating
Hours
Service
Expected from
OCBC Bank 1800-363 3333
ATM/Phone
Banking/Internet
Banking
www.ocbc.com
(1)
24 hours a day
Evening of the
balloting day
DBS Bank Ltd.
1800-339 6666
(for POSB
account holders)
1800-111 1111
(for DBS Bank
Ltd. account
holders)
Internet Banking
www.dbs.com
(2)
24 hours a day
Evening of the
balloting day
United Overseas
Bank Limited
and its
subsidiary,
Far Eastern
Bank Limited
(UOB Group)
1800-222 2121
ATM (Other
Transactions IPO
Enquiry)/Internet
Banking
www.uobgroup.com
(3)
24 hours a day
Evening of the
balloting day
Notes:
(1) Applicants who have made Electronic Applications through the ATMs or the IB website of OCBC Bank may check
the results of their applications through OCBC Personal Internet Banking, OCBCs ATMs or OCBC Phone Banking
services.
(2) Applicants who have made Internet Electronic Applications through the IB website of DBS Bank Ltd. or Mobile
Banking Applications through the mobile banking interface of DBS Bank Ltd. may also check the results of their
applications through the same channels listed in the table above in relation to ATM Electronic Applications made at
the ATMs of DBS Bank Ltd.
(3) Applicants who have made Electronic Applications through the ATMs or the IB website of UOB Group may check the
results of their applications through UOB Personal Internet Banking, UOB Groups ATMs or UOB Phone Banking
services.
(13) Electronic Applications shall close at 12.00 noon on 23 July 2013 or such other date(s) and
time(s) as the Managers may agree with the Joint Bookrunners. All Internet Electronic
Applications and Mobile Banking Applications must be received by 12.00 noon on 23 July
2013, or such other date(s) and time(s) as the Managers may agree with the Joint
Bookrunners. Internet Electronic Applications and Mobile Banking Applications are deemed
to be received when they enter the designated information system of the relevant
Participating Bank.
(14) You are deemed to have irrevocably requested and authorised the Managers to:
(a) register the Public Offer Stapled Securities allocated to you in the name of CDP for
deposit into your CDP Securities Account;
(b) return or refund (without interest or any share of revenue earned or other benefit arising
therefrom) the application monies, should your Electronic Application be rejected or if
the Offering does not proceed for any reason, by automatically crediting your bank
account with your Participating Bank, with the relevant amount within 24 hours after
balloting (or such shorter period as the SGX-ST may require), or within three Market
Days if the Offering does not proceed for any reason, after the close or discontinuation
G-16
(as the case may be) of the Offering, PROVIDED THAT the remittance in respect of
such application which has been presented for payment or such other processes has
been honoured and application monies received in the designated security issue
account; and
(c) return or refund (without interest or any share of revenue or other benefit arising
therefrom) the balance of the application monies, should your Electronic Application be
rejected or accepted in part only, by automatically crediting your bank account with your
Participating Bank, at your risk, with the relevant amount within 14 Market Days after
the close of the Offering, PROVIDED THAT the remittance in respect of such application
which has been presented for payment or such other processes has been honoured and
application monies received in the designated security issue account.
(15) You irrevocably agree and acknowledge that your Electronic Application is subject to risks of
electrical, electronic, technical and computer-related faults and breakdown, fires, acts of God
and other events beyond the control of the Participating Banks, the REIT Manager, the
Trustee-Manager, and the Joint Bookrunners, and if, in any such event the REIT Manager,
the Trustee-Manager and the Joint Bookrunners, and/or the relevant Participating Bank do
not receive your Electronic Application, or any data relating to your Electronic Application or
the tape or any other devices containing such data is lost, corrupted or not otherwise
accessible, whether wholly or partially for whatever reason, you shall be deemed not to have
made an Electronic Application and you shall have no claim whatsoever against the REIT
Manager, the Trustee-Manager, the Joint Bookrunners and/or the relevant Participating Bank
for any Public Offer Stapled Securities applied for or for any compensation, loss or damage.
(16) The existence of a trust will not be recognised. Any Electronic Application by a trustee must
be made in his own name and without qualification. The Managers shall reject any
application by any person acting as nominee (other than approved nominee companies).
(17) All your particulars in the records of your Participating Bank at the time you make your
Electronic Application shall be deemed to be true and correct and your Participating Bank
and the Relevant Parties shall be entitled to rely on the accuracy thereof. If there has been
any change in your particulars after making your Electronic Application, you must promptly
notify your Participating Bank.
(18) You should ensure that your personal particulars as recorded by both CDP and the relevant
Participating Bank are correct and identical, otherwise, your Electronic Application is liable
to be rejected. You should promptly inform CDP of any change in address, failing which the
notification letter on successful allocation will be sent to your address last registered with
CDP.
(19) By making and completing an Electronic Application, you are deemed to have agreed that:
(a) in consideration of the Managers making available the Electronic Application facility,
through the Participating Banks acting as agents of the Managers, at the ATMs and IB
websites of the relevant Participating Banks and the mobile banking interface of DBS
Bank Ltd.:
(i) your Electronic Application is irrevocable;
(ii) your Electronic Application, the acceptance by the Managers and the contract
resulting therefrom under the Public Offer shall be governed by and construed in
accordance with the laws of Singapore and you irrevocably submit to the
non-exclusive jurisdiction of the Singapore courts; and
G-17
(iii) you represent and agree that you are not located in the United States (within the
meaning of Regulation S);
(b) none of CDP, the REIT Manager, the Trustee-Manager, the Joint Bookrunners and the
Participating Banks shall be liable for any delays, failures or inaccuracies in the
recording, storage or in the transmission or delivery of data relating to your Electronic
Application to the REIT Manager, the Trustee-Manager, or CDP or the SGX-ST due to
breakdowns or failure of transmission, delivery or communication facilities or any risks
referred to in paragraph 15 above or to any cause beyond their respective controls;
(c) in respect of the Public Offer Stapled Securities for which your Electronic Application
has been successfully completed and not rejected, acceptance of your Electronic
Application shall be constituted by written notification by or on behalf of the Managers
and not otherwise, notwithstanding any payment received by or on behalf of the
Managers;
(d) you will not be entitled to exercise any remedy for rescission for misrepresentation at
any time after acceptance of your application;
(e) reliance is placed solely on information contained in this Prospectus and that none of
the REIT Manager, the Trustee-Manager, the Sponsor, the Joint Bookrunners or any
other person involved in the Offering shall have any liability for any information not
contained therein; and
(f) you irrevocably agree and undertake to subscribe for the number of Public Offer Stapled
Securities applied for as stated in your Electronic Application or any smaller number of
such Public Offer Stapled Securities that may be allocated to you in respect of your
Electronic Application. In the event the Managers decides to allocate any smaller
number of such Public Offer Stapled Securities or not to allocate any Public Offer
Stapled Securities to you, you agree to accept such decision as final.
Steps for ATM Electronic Applications for Public Offer Stapled Securities through ATMs of
OCBC Bank
Instructions for ATM Electronic Applications will appear on the ATM screens of the respective
Participating Bank. For illustration purposes, the steps for making an ATM Electronic Application
through an OCBC Bank ATM are shown below. Certain words appearing on the screen are in
abbreviated form (a/c, appln, ESA, no. and & refer to account, application, electronic
share application, number and and, respectively). Instructions for ATM Electronic Applications
on the ATM screens of the other Participating Banks, may differ slightly from those represented
below.
Steps for ATM Electronic Applications through ATMs of OCBC Bank
Step 1 : Insert your personal OCBC ATM card
2 : Enter your Personal Identification Number
3 : Select More Services
4 : Select Investment Services
5 : Select Electronic Security Appln
6 : Select OUEHT
G-18
7 : For an applicant making an Electronic Application at the ATM for the first time
(a) For non-Singaporean
Press the Yes key if you are a permanent resident of Singapore,
otherwise, press the No key.
(b) Enter your own Securities Account number (12 digits) e.g. 168101234567
and press Yes key to confirm that the Securities Account number you
have entered is correct
8 : Check your particulars appearing on the screen and press the Correct key to
confirm that your particulars are correct
9 : Press the Confirm key to confirm that you have read the following messages:
Where applicable, a copy of the Prospectus has been lodged with
and registered by the Monetary Authority of Singapore and/or
SGX-ST, which assumes no responsibility for its contents
Where applicable, the Prospectus is available at various
Participating Banks
10 : Press the Confirm key again to confirm that you have read the following
messages:
Anyone who intends to submit an application for these securities
should read the Prospectus before submitting his/her application in
the manner set out in the Prospectus
Please confirm that you have read, understood and agreed to all
terms of application set out in the Prospectus
11 : Press the Confirm key to confirm that you have read the following messages:
You consent to the disclosure of your NRIC/Passport No., address,
nationality, securities a/c no., qty of securities applied for and CPF
investment a/c no. to the Unit Registrar, CDP, CPF, SCCS & Issuer.
This application is made in your own name & at your own risk.
You are not a U.S. Person (as such term is defined in Regulation S
under the United States Securities Act of 1933, as amended).
G-19
12 : Select the number of Shares you wish to apply for:
For fixed price ESA, this is the only application submitted
Price: S$0.88
13 : Select the type of bank account to debit your application monies.
14 : Check the details of your application appearing on the screen and press the
Confirm key to confirm your application.
Steps for Internet Electronic Applications through the IB website of OCBC Bank
Instructions for Internet Electronic Applications will appear on the IB website screens of the
respective Participating Bank. For illustration purposes, the steps for making an Internet
Electronic Application through the IB website of OCBC Bank are shown below. Certain words
appearing on the screen are in abbreviated form (a/c, appln, ESA, no. and & refer to
account, application, electronic share application, number and and, respectively).
Instructions for Internet Electronic Applications on the IB website screens of the other
Participating Banks, may differ slightly from those represented below.
Step 1 : Connect to OCBC Bank website at http://www.ocbc.com.
2 : Locate the Personal Banking, Login to Internet Banking link on the right hand
side.
3 : Enter your Access Code and PIN and click on LOGIN. Thereafter, enter
the One-Time password (OTP) and click Submit.
4 : Select the tab Investment & Trading and click on Initial public offering. You
will be directed to the Apply for IPO page.
5 : Answer the five questions under the section entitled Fill in Details by
selecting Yes or No and selecting the relevant country of residence (you
must be residing in Singapore to apply).
6 : Read the important information on Electronic Security Application (ESA) on
the screen and click on the check box to acknowledge that you have read and
understood the declaration.
7 : Under section 1. Select Securities, check the details of the share counter that
you wish to apply for and if there is more than one share counter on the screen,
select the relevant counter by clicking on the appropriate radio button.
8 : Upon selection of the share counter, the prospectus and prospectus terms and
conditions will be loaded. Read the important information on the screen and
click on the check box at the bottom of the screen to acknowledge that you
have read and understood the declaration.
Click on Next.
9 : Under section 2. Investment Details, click on the checkbox next to Apply
using cash if you are applying for the Stapled Securities using cash and key
in the number of Stapled Securities you intend to apply for.
G-20
Click on Next.
10 : Under Review Application, check your personal details, details of the share
counter you wish to apply for, payment mode and account to debit.
Click on Submit.
11 : Print the confirmation screen (optional) for your reference and retention only.
You can also check the application status by clicking Application Status.
G-21
APPENDIX H
LIST OF PRESENT AND PAST PRINCIPAL DIRECTORSHIPS OF DIRECTORS
AND EXECUTIVE OFFICERS OF THE REIT MANAGER AND
THE TRUSTEE-MANAGER
The principal present directorships, other than those held in the Managers, and the principal past
directorships in the last five years of each of the directors and executive officers (named in
Management and Corporate Governance) of the Managers are as follows:
(A) Directors of the Managers
(1) Mr Christopher James Williams
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
Food Junction Holdings Limited
HWB (Corporate Services) Limited
HWB (Property) Limited
Lusitania Investments Limited
Staraward Limited
Africano Holdings Limited
Boatman Limited
LCR Catering Services Ltd
PT Siloam International Hospitals
RB Secretariat Limited
Richards Butler Nominees Limited
Richards Butler Secretariat Limited
Seacorp Limited
Shipcorp Limited
Shipman Limited
(2) Professor Neo Boon Siong
Date)
J. Lauritzen Singapore Pte. Ltd.
k1 Ventures Limited
Keppel Telecommunications &
Transportation Ltd
Oversea-Chinese Banking Corporation Limited
Great Eastern Holdings Limited
Keppel Offshore & Marine Ltd
The Overseas Assurance Corporation Limited
(3) Mr Sanjiv Misra
Date)
Capaleph Partners Pte. Ltd.
Capaleph Indian Millennium Fund Pte. Ltd,
Edelweiss Capital (Spore) Pte Ltd
Edelweiss Financial Services Ltd (formerly
known as Edelweiss Capital Ltd)
Group Capaleph Pte. Ltd.
Invenio Holdings Pte Ltd
National University Health System Board
Phoenix Advisers Pte. Ltd.
Phoenix E.K. Limited
Singapore Management University Board of
Trustees
Capaleph Managers Pte. Ltd.
Global Investments Ltd
Dart Energy Ltd
H-1
(4) Mr Liu Chee Ming
Date)
Access Investment Management (H.K.)
Limited
Access PCP Emerging Markets Limited
Access PCP Limited
Bendic Associates Limited
Benthurst Associates Limited
Brianne Investments Limited
Culford Holdings International Ltd.
Haitong Securities Company Ltd.
Jade Valley Limited
Kader Holdings Company Limited
Keltyhill Incorporated
Montex Limited
Odlins Holdings Limited
Platinum Broking Company Limited
Platinum Holdings Company Limited
(Hong Kong)
Platinum Holdings Company Limited
(Cayman Islands)
Platinum Securities Company Limited
(Hong Kong)
Platinum Securities Company Limited
(Singapore)
Private Capital Portfolio Management Limited
Rosaland Limited
StarHub Ltd.
The Singapore International School
Foundation Ltd.
Topchart Company Holdings Ltd.
Vansbridge Limited
Vanwood Limited
Winner Valley Limited
CIMC Raffles (Offshore) Singapore Ltd.
Honour Estate Investments Ltd.
Platinum Management Services Limited
Rainbow City Limited
Robinson & Co. Ltd.
Takway Limited
H-2
(5) Mr Ong Kian Min
Date)
BreadTalk Group Limited
China Energy Limited
Food Empire Holdings Limited
GMG Global Ltd
HUPSteel Limited
Jaya Holdings Limited
JEKKA-MOLLE Pte. Ltd.
LANKom Electronics Limited
Kanesaka Sushi Private Limited
Katana Asset Management Pte. Ltd.
Penguin International Ltd
QEnergy Pte Ltd
SB China Holdings Pte Ltd
SilverLake Axis Ltd
Sinor Invest Pte Ltd
BrokersCapital Pte Ltd
Guangzhao Industrial Forest Biotechnology
Group Limited
OSIM International Ltd
Robinson & Co. Ltd
Senoko Power Ltd
Senoko Services Pte. Ltd.
Sroame Technologies Pte. Ltd.
Zinglabs Pte Ltd
(6) Mr Chong Kee Hiong
Date)
Beeworks Inc
Pasir Ris Resort Pte Ltd
SLF Leisure Enterprises (Pte) Ltd
Aliph Properties Pte Ltd
Arc-Capitaland Residences Japan
Private Limited
Ascott (Jersey) Limited
Ascott Dilmun Holdings Limited
Ascott Holding (China) Limited
Ascott Hospitality Holdings Philippines, Inc.
Ascott International Management (2001)
Pte Ltd
Ascott International Management (Malaysia)
Sdn. Bhd.
Ascott International Management (Vietnam)
Co. Ltd
Ascott Investments Pte. Ltd.
Ascott Makati, Inc.
Ascott Manila Pte. Ltd.
Ascott Property Management (Shanghai)
Co., Ltd
Ascott REIT Mtn (Euro) Pte. Ltd.
Ascott REIT Mtn Pte. Ltd.
Ascott Residences Pte Ltd
Ascott Residence Trust Management Limited
Ascott Serviced Residence (China) Fund
Ascott Serviced Residence (China) Fund
Management Pte. Ltd.
Ascott Singapore Raffles Place Pte. Ltd.
Bayswater (C.I.) Limited (Struck Off)
Burton Engineering Pte Ltd
H-3
Date)
Cairnhill Place (1999) Limited
Calliston Holdings (S) Pte Ltd (Dissolved
Members Voluntary Winding Up)
Casablanca Villa (M) Sdn Bhd
Central Investments (BVI) Group Limited
Citadines Ahmedabad Aparthotel
Private Limited
Citadines Arnulfpark Munich (Netherlands)
B.V.
Citadines Ashley TST (Hong Kong) Limited
Citadines Ashley TST (Singapore) Pte. Ltd.
Citadines Ashley TST Management
(Hong Kong) Ltd
Citadines Bangkok (S) Pte. Ltd.
Citadines Hitec City Aparthotel Private Limited
Citadines Melbourne On Bourke (BVI) Limited
Citadines OMR Aparthotel Private Limited
Citadines Singapore Mount Sophia Pte. Ltd.
Citadines SIP Pte. Ltd.
Citadines Soho (Singapore) Pte. Ltd.
(Dissolved Members Voluntary Up)
Cosmo Villa Sdn Bhd
Craydon Pte Ltd (Dissolved Members
Voluntary Winding Up)
CRL Investment Pte Ltd
Cuppage Terrace (1999) Pte Ltd (Dissolved
Dynamic Chance Sdn Bhd
East Australia Trading Company (S) Pte Ltd
East Australia Trading Company Limited
Effenberg Investments Pte Ltd (Dissolved
Equicore Enterprise Sdn Bhd
Eurimeg SA
FBM London Ltd
FITM Limited (Dissolved Members
Glenwood Properties Pte Ltd
Greenpark Investments (Guernsey) Limited
Hanoi Tower Center Company Limited
Hemliner Pte Ltd
Hemliner (Beijing) Real Estate Co., Ltd.
Hotel Asia Private Limited (Dissolved
Hua Xin Residences Pte Ltd
Ipjora (S) Pte. Ltd. (Dissolved Members
Ipjora Holdings Sdn Bhd
Island City Pte Ltd
Javana Pte Ltd
Laetitia Investments Pte Ltd (Dissolved
H-4
Date)
Lavender View Regency Pty Limited
LC (Kumpulan Malaysia) Pte Ltd
LC Genesis (Shanghai) Pte Ltd
Lejia (S) Pte Ltd
Liang Court (Malaysia) Sdn Bhd
Liang Court Development Sdn. Bhd,
Liang Court Wan Isara Sdn. Bhd.
Mekong-Hacota Joint Venture Company
Limited
Melody Land Investments Pte Ltd (Dissolved
Ming Zhu Investments (BVI) Limited
Orchard Point (1999) Limited
Oriville SAS
P.T. Ascott International Management
Indonesia
P.T. Bumi Perkasa Andhika
(President Commissioner)
P.T. Ciputra Liang Court
P.T. Indonesia America Housing
Piatra Pte Ltd
Rattha Citadines Boulevard Chennai
Private Limited
Rattha Somerset Greenways (Chennai)
Private Limited
Rattha Somerset Whitefield Hospitality
Private Limited
Regional Hotel Pte Ltd
Saigon Office and Serviced Apartment
Company Limited
Scotts Centre Management Pte Ltd
Scotts Philippines, Inc.
Scotts Vietnam Pte Ltd (Dissolved
Sejati Timur Sdn. Bhd.
SH Malls Limited
Shanghai Xin Wei Property Development
Co., Ltd.
Siam Holdings Ltd
Slamet Pte Ltd
Smooth Runner Company Limited
SN Resources, Inc.
Somerset (Australia) Pte Ltd
Somerset (UK) Pte Ltd
Somerset (Vietnam) Investments Pte Ltd
(Dissolved Members Voluntary Winding Up)
Somerset (Wuhan) Investments Pte Ltd
Somerset Ampang (Malaysia) Sdn. Bhd.
H-5
Date)
Somerset Azabu East Investment (S) Pte. Ltd.
Somerset Bayswater Operating Limited
(Struck Off)
Somerset Capital Pte Ltd
Somerset Development Pte Ltd
Somerset FG Pte. Ltd.
Somerset Gordon Heights (S) Pte. Ltd.
Somerset Grand Citra (S) Pte. Ltd.
Somerset Hoa Binh (S) Pte. Ltd.
Somerset Hoa Binh Joint Venture Company
Limited
Somerset Investments Pte Ltd
Somerset On Elizabeth (S) Pte Ltd
Somerset On Elizabeth Pty Ltd
Somerset Philippines (S) Pte. Ltd.
Somerset Retail Holdings Pte Ltd
Somerset Roland House Operating Limited
(Struck Off)
Somerset Roppongi (S) Pte. Ltd.
Somerset St Georges Terrace (Perth)
Pte. Ltd.
Somerset Suzhou Investment Pte Ltd
Somerset Youyi (S) Pte. Ltd. (Dissolved
Somerset Zhongguancun (S) Pte. Ltd.
SQ Resources, Inc.
Stanhope Gardens Pte Ltd
Stanhope Holdings Pte Ltd
Stanhope Investments Pte Ltd
Stanhope Properties Pte Ltd
Suzhou Chong Rui Xin Shi Ji Real Estate
Co., Ltd
System-Bit (Myanmar) Ltd
Telok Aver Properties Pte Ltd (Dissolved
The Ascott (Europe) N.V.
The Ascott (Europe) Pte. Ltd.
The Ascott (Vietnam) Investments Pte Ltd
The Ascott Capital Pte Ltd
The Ascott Holdings Limited
The Ascott Hospitality Holdings Pte Ltd
The Ascott International Investments Pte Ltd
The Ascott Limited
The Ascott Mayfair Operating Limited
The Ascott Operating Pte. Ltd.
Tianjin Consco Property Development
Co., Ltd.
Ventura (Bishan) Limited (Dissolved
Ventura Development (Myanmar) Pte Ltd
Ventura Development Pte Ltd (Dissolved
H-6
Date)
West Lake Development Company Limited
Westfield Holdings Pte Ltd (Dissolved
Wisma Matex Sdn. Bhd.
Wuhan New Minzhong Leyuan Co., Ltd
Zenith Residences Tokyo (S) Pte. Lid.
Zenith Residences Tokyo Investment (S)
Pte. Ltd.
(B) Executive Officers of the Managers
(1) Mr Rudi Chuan Hwee Hiow
Date)
Alkas Realty Pte. Ltd.
Beringia Singapore Pte. Ltd.
Beringia Properties Corp.
Clifford Development Pte. Ltd.
Cove Development Pte. Ltd.
Hotel Investment (Hainan) Private Limited
Hotel Investment (Marina) Private Limited
Hotel Investment (Shantou) Private Limited
Imperial Development Holdings Pte. Ltd.
Imperial Development Pte. Ltd.
LOC Korea Investment Pte. Ltd.
LOCZ Holdings Pte. Ltd.
LOCZ Korea Corporation
LOCZ Korea Investment Pte. Ltd.
Madison Central Co., Ltd.
Meritus Hotels Pte. Ltd.
Meritus International Pte. Ltd.
Meritus Trademarks Pte. Ltd.
OCZ Holdings Pte. Ltd.
OUE Airport Hotel Pte. Ltd.
OUE Hotel Properties (Narita) Pte. Ltd.
OUE Hotels (Asia) Pte. Ltd.
OUE Hotels (Japan) Pte. Ltd.
OUE International Holdings Pte. Ltd.
OUE Investments Pte. Ltd.
OUE Property Management Pte. Ltd.
(formerly known as OUE Global Pte. Ltd.)
OUE Reef Development Pte. Ltd.
OUE Restaurants Pte. Ltd.
OUE USA Services Corp.
OUE Worldwide Pte. Ltd.
Reef Development Holdings Pte. Ltd.
Seaview Property Holdings Pte. Ltd.
H-7
Date)
Sigma Capital Pte Ltd
Sigma Trillium Pte Ltd
Singapore Mandarin International Hotels
Pte Ltd
Singapore Meritus International Hotels Pte Ltd
Total Apex Limited
(2) Mr Jeffrey Wong Yew Cheong
Date)
Nil. Nil.
(3) Mr Chen Yi Chung
Date)
Nil. Nil.
H-8
SPONSOR
50 Collyer Quay
#18-01/02 OUE Bayfront
Singapore 049321
MANAGER OF OUE H-REIT
333 Orchard Road
#33-00
Singapore 238867
TRUSTEE-MANAGER OF OUE H-BT
333 Orchard Road
#33-00
Singapore 238867
JOINT GLOBAL COORDINATORS AND ISSUE MANAGERS
Credit Suisse (Singapore) Limited
One Raffles Link
#03/#04-01 South Lobby
Singapore 039393
Goldman Sachs (Singapore) Pte
One Raffles Link
#07-01 South Lobby
Singapore 039393
Standard Chartered Securities
(Singapore) Pte. Limited
8 Marina Boulevard
#19-01 Marina Bay Financial Centre Tower 1
Singapore 018981
JOINT BOOKRUNNERS
Credit Suisse (Singapore) Limited
One Raffles Link
#03/#04-01 South Lobby
Singapore 039393
Goldman Sachs (Singapore) Pte
One Raffles Link
#07-01 South Lobby
Singapore 039393
Standard Chartered Securities
(Singapore) Pte. Limited
8 Marina Boulevard
#19-01 Marina Bay Financial Centre Tower 1
Singapore 018981
Merrill Lynch (Singapore) Pte. Ltd.
50 Collyer Quay
#14-01 OUE Bayfront
Singapore 049321
Deutsche Bank AG, Singapore Branch
One Raffles Quay
#16-00 South Tower
Singapore 048583
Oversea-Chinese Banking
Corporation Limited
65 Chulia Street
#09-00 OCBC Centre
Singapore 049513
TRUSTEE OF OUE H-REIT
20 Cecil Street
#28-01 Equity Plaza
Singapore 049705
LEGAL ADVISERS
Legal Adviser to the Offering, and to the REIT Manager, the Trustee-Manager and the Sponsor
Allen & Gledhill LLP
One Marina Boulevard
#28-00
Singapore 018989
Legal Adviser to the Joint Global
Coordinators and Issue Manager and the
Joint Bookrunners as to Singapore Law
TSMP Law Corporation
6 Battery Road
Level 41
Singapore 049909
Legal Adviser to the Joint Global Coordinators and
Issue Managers and the Joint Bookrunners as to
United States Federal Securities Law
Allen & Overy LLP
50 Collyer Quay
#09-01 OUE Bayfront
Singapore 049321
Legal Adviser to the REIT Trustee
Rodyk & Davidson LLP
80 Raffles Place
#33-00 UOB Plaza 1
Singapore 048624
Reporting Auditors
KPMG LLP
16 Raffles Quay
#22-00 Hong Leong Building
Singapore 048581
Independent Tax Adviser
KPMG Services Pte. Ltd.
16 Raffles Quay
#22-00 Hong Leong Building
Singapore 048581
UNIT REGISTRAR AND UNIT TRANSFER OFFICE
Boardroom Limited
50 Raffles Place
#32-01 Singapore Land Tower
Singapore 048623
INDEPENDENT VALUERS
Cushman & Wakefield VHS Pte. Ltd.
3 Church Street
#09-03 Samsung Hub
Singapore 049483
9 Raffles Place
#39-00 Republic Plaza
Singapore 048619
INDEPENDENT MARKET RESEARCH CONSULTANT
CBRE Pte. Ltd.
6 Battery Road
#32-01
Singapore 049909
RECEIVING BANK
Standard Chartered Bank, Singapore branch
8 Marina Boulevard
#25-00 Marina Bay Financial Centre Tower I
Singapore 018981
www.oueht.com
7.36%
OUE HOSPITALITY
BUSINESS TRUST
OFFERING PRICE:
Comprising:
ANNUALISED 2013
DISTRIBUTION YIELD
1
SPONSOR
O
U
E

H
O
S
P
I
T
A
L
I
T
Y

T
R
U
S
T
Stapled Securities.
on Regulation S.

OUE H-Trust Prospectus

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