Message to Unitholders

Charly Madan
Chairman of the Board of Directors
CPN REIT Management Company Limited

To All Trust Unitholders,

Year 2017 was a landmark year for CPN Retail Growth Leasehold REIT (“CPNREIT”) due to its great success in the conversion of CPN Retail Growth Leasehold Property Fund (“CPNRF”) into CPNREIT together with investments in additional assets forming the largest REIT in Thailand.

The said conversion provides growth prospect to CPNREIT as CPNREIT can now invest in additional assets, which CPNREIT has invested in CentralFestival Pattaya Beach Project and Hilton Pattaya worth THB 11,908 million in net investment value. These assets are quality assets with high rental and occupancy rate, and are located in Thailand’s major tourist destination. It is anticipated that the investment in Eastern Economic Corridor would enable CentralFestival Pattaya Beach Project and Hilton Pattaya to yield steady returns in the long run, and help mitigate the risk of the Trust Unitholders as CPNREIT has diversified its investments into various locations. Moreover, as the borrowing ceiling of REIT is higher than that of property fund, the REIT Manager can utilize a more efficient capital structure by using debt funding which can lower cost to enhance returns to the Trust Unitholders.

The performance is satisfactory on the existing assets transferred from CPNRF. The occupancy rate on most assets, increased slightly from Quarter 3 of Year 2017, except Central Plaza Rama 3 where the occupancy rate as of December was up by 19% from the end of Quarter 3 as the leasable areas have been gradually opened after a major renovation. It is anticipated that this major renovation would be completed by Quarter 2 of Year 2018.

Lastly, as the Chairman of CPN REIT Management Company Limited, the REIT Manager, I would like to express my gratitude to all Trust Unitholders who supported and made the conversion of CPNRF into CPNREIT a great success. We intend to manage CPNREIT to deliver long-term stable returns to Trust Unitholder, and to create growth prospect as intended in such conversion.