PRIME REIT IPO

Issue statistics:
Offer size: 581,918,000 new shares
Public Offer - 30,000,000 shares
Reserved Units - 28,000,000 shares
Placement Tranche - 523,918,000 shares
Price: S$0.98
Yield: 5.12% Based on S$0.98/Share
Capitalisation: S$1,344,140,000, based on the Offering Price (S$0.98 per Unit)
Open: 13 September 2005
Close: 16 September 2005, 8.00AM
Trading: 20 September 2005 (on "when issued" basis)

Extracted From Prospectuses

Background Information

Prime REIT is a real estate investment trust with an initial property portfolio consisting of the Wisma Atria Property (331 strata lots in Wisma Atria representing 74.23% of the total share value of the strata lots in Wisma Atria) and the Ngee Ann City Property (four strata lots representing 27.23% of the total share value of the strata lots in Ngee Ann City), which are both landmark properties (with retail and office components) located in Orchard Road.

The Manager believes that an investment in Prime REIT will offer Unitholders the following attractions:
• Opportunity to invest in a portfolio of landmark properties located in Orchard Road, the heart of Singapore’s premier shopping and tourist precinct;
• Exposure to diversified retail and office properties;
• Stable income underpinned by strong portfolio fundamentals;
• Active management of properties to generate organic growth;
• Capital growth opportunities through acquisitions;
• Management Fees structured to incentivise and align interests of the Manager with that of Unitholders;
• Capital structure providing future funding flexibility;
• Experienced professional managers;
• High distribution payout ratio; and
• Tax benefits for Unitholders.

One of the primary objectives of Prime REIT is to provide Unitholders with stable distributions on a quarterly basis. The stability of Prime REIT’s distribution is underpinned by its strong portfolio fundamentals. As at 31 January 2005, Committed Occupancy for retail space in the Wisma Atria Property and the Ngee Ann City Property was 96.9% and 100.0% respectively, while Committed Occupancy for office space was 94.0% and 88.5% respectively. The weighted average lease term to expiry (by Net Lettable Area) of 4.2 years for the period from 31 January 2005 for both the retail and office components of the Properties also underpins the stability of future income for Prime REIT.

A summary of Prime REIT’s forecast and projected distribution yields is set out in the table below based on a distribution of 2.51 Singapore cents for the six months from 1 July 2005 to 31 December 2005 and a distribution of 5.25 Singapore cents for FY2006. Unitholders are expected to benefit from 4.5% growth in annualised distributions over the Forecast Period 2005 and the Projection Year 2006.

Forecast Period 2005 2.51(1) 5.12%(2) n.a.
Projection Year 2006 5.25 5.35% 4.5%(3)

(1) This amount is based on the assumption that the Units are issued on 1 July 2005 and are eligible for distributions arising from operations from 1 July 2005 to 31 December 2005. Since the Units will be issued at a later date, investors will only be entitled to distributions arising from operations from the date of issue of the Units to 31 December 2005.
(2) Annualised.
(3) Based on annualised figures derived from the figures for the Forecast Period 2005.
(See “Profit Forecast and Profit Projection”.)

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