Spring Real Estate Investment Trust : Interim Results Announcement for the Six Months Ended 30 June 2017 and Closure of Register of Unitholders

The Securities and Futures Commission of Hong Kong, Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing

Company Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability

whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement does not constitute nor is intended to constitute an offer to sell or a solicitation of an offer to buy any securities.

(a Hong Kong collective investment scheme authorized under section 104 of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)) (Stock Code: 01426)

Managed by Spring Asset Management Limited INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2017 AND CLOSURE OF REGISTER OF UNITHOLDERS SPRING REAL ESTATE INVESTMENT TRUST

Spring Real Estate Investment Trust ("Spring REIT") is a real estate investment trust constituted by a trust deed entered into on 14 November 2013 as amended by the first

supplemental deed dated 22 May 2015 (collectively, the "Trust Deed") between Spring Asset Management Limited and DB Trustees (Hong Kong) Limited, as trustee of Spring REIT (the "Trustee"). The units of Spring REIT were first listed on The Stock Exchange of Hong Kong Limited (the "Stock Exchange") on 5 December 2013.

SPRING ASSET MANAGEMENT LIMITED

Spring REIT is managed by Spring Asset Management Limited (as manager of Spring REIT, the "Manager"), a company incorporated in Hong Kong for the sole purpose of managing

Spring REIT. As at 30 June 2017, the Manager is 90.2% owned by Mercuria Investment Co., Limited. ("Mercuria", formerly known as AD Capital Co., Ltd., renamed on 1 January 2016), which is a private equity investment firm listed on the Tokyo Stock Exchange (Stock Code:

7190) with notable shareholders such as Development Bank of Japan, Itochu Corporation and Sumitomo Mitsui Trust Bank, Limited.

Distribution

The board of directors (the "Board") of the Manager, for and on behalf of Spring REIT, has

resolved to declare an interim distribution for the period from 1 January 2017 to 30 June 2017 (the "Reporting Period") of HK9.5 cents per unit (the "2017 Interim Distribution") to the

unitholders. The distribution implied a payout ratio of approximately 100%. The 2017 Interim Distribution, however, may be subject to adjustment in the event of any issuance of new units between 1 July 2017 and the record date for determining unitholders' entitlements to such

distribution, which will be 12 September 2017 (the "Record Date").

2017 Interim Distribution will be paid in Hong Kong dollars. The HKD/USD exchange rate adopted for the 2017 Interim Distribution is 7.8019, the average mid-price of opening indicative counter exchange rate as published by the Hong Kong Association of Banks for the five (5)

business days immediately preceding 30 June 2017. In arriving at the Total Distributable

Income ("TDI") for the Reporting Period, adjustments have been made to the consolidated profit after tax before transactions with unitholders for the Reporting Period to eliminate the effects of certain Adjustments (as defined in the Trust Deed). Based on the closing price of

HKD3.40 per unit as at 30 June 2017, the 2017 Interim Distribution represents an annualized distribution yield of 5.6%. For details of the distribution, please refer to the section headed

"Statement of Distributions" in the financial information.

In accordance with the Trust Deed, the Manager's current policy is to distribute to the

unitholders at least 90% of TDI in each financial year. The Manager also has the discretion to direct Spring REIT to distribute over and above the minimum 90% of TDI for any financial year if and to the extent Spring REIT, in the opinion of the Manager, has funds surplus to its business requirements.

The Record Date of the 2017 Interim Distribution will be 12 September 2017, Tuesday. The register of unitholders will be closed for the purpose of determining the identities of unitholders from 11 September 2017, Monday to 12 September 2017, Tuesday, both days inclusive, during which period no transfer of units will be registered. The 2017 Interim Distribution is expected to be payable on 22 September 2017, Friday to unitholders whose names appear on the register of unitholders on the Record Date.

In order to qualify for the 2017 Interim Distribution, all completed transfer forms in respect of the transfer of units (accompanied by the relevant unit certificates) must be lodged with Computershare Hong Kong Investor Services Limited, Spring REIT's unit registrar in Hong

Kong, whose address is 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, for registration no later than 4:30 p.m. on 8 September 2017, Friday.

MANAGEMENT DISCUSSION AND ANALYSIS

Spring REIT's performance during the Reporting Period has stabilized and registered a modest rebound in RMB terms thanks to the resilience of Office Tower 1, Office Tower 2 and the

relevant portion of the car park in China Central Place (together, the "CCP Property").

Operation Review

Without further regulatory or tax changes, Spring REIT was able to deliver a modest rebound in both revenue and net property income for the Reporting Period in RMB terms. Revenue rose 0.5% half on half ("HoH") to RMB244.82 million. After deducting property operating expenses of RMB63.49 million, net property income was RMB181.33 million, rising 1.9% HoH.

For the Six Months Ended	30-Jun-16 RMB million (note i)	Change 31-Dec-16 % RMB million		Change %	30-Jun-17 RMB million
Revenues - Rental income	244.20	(4.3%) 233.70		1.8%	237.81
- Car park income	2.09	(19.6%) 1.68		2.4%	1.72
- Other income (note ii)	11.12	(27.1%) 8.11		(34.8%)	5.29
257.41	(5.4%) 243.49		0.5%	244.82
Property Operating Expenses
- Property management fee	(5.21)	6.3%	(5.54)	(2.7%)	(5.39)
- Property tax (note iii)	(12.42)	139.3%	(29.72)	(2.7%)	(28.92)
- Business and other taxes (note iv)	(11.89)	(68.7%)	(3.72)	(6.5%)	(3.48)
- Withholding tax (note v)	(25.98)	(6.7%)	(24.23)	(0.1%)	(24.20)
- Leasing Commission	(2.22)	(14.4%)	(1.90)	(42.6%)	(1.09)
- Others	(0.43)	-	(0.43)	(4.7%)	(0.41)
(58.15)	12.7%	(65.54)	(3.1%)	(63.49)
Net Property Income (note vi)	199.26	(10.7%)	177.95	1.9%	181.33

Notes:

1. While the consolidated financial statements were prepared in USD, the performance of the CCP Property is presented in RMB in order to facilitate meaningful discussions given that the CCP Property is located in China.

2. Other income mainly represents compensation paid by tenants for early termination of lease. iii Property tax represents real estate tax and land use tax.

1. Business and other taxes represent business tax, urban construction and maintenance tax, education surcharge and stamp duty.

2. Withholding tax in the People's Republic of China is calculated based on the rental revenues at a rate of 10%.

3. The property tax changes that became effective on 1 July 2016 was the primary cause for the decrease in net

property income by 10.7% from RMB199.26 million in the first half ("1H") of financial year ("FY") 2016 to RMB177.95 million in the second half ("2H") of FY 2016.

Rental income

The Rental income for the Reporting Period was RMB237.81 million, a 2.6% decrease year on year ("YoY") and a 1.8% increase HoH. If the effect of business tax and value-added tax ("VAT") (where applicable) was removed from the rental income to facilitate a like-for-like comparison, net rental income for the Reporting Period would have shown an increase of

approximately 0.9% YoY.

Operation at the CCP Property continued to firm with an average occupancy of 93.5% (2H

2016: 93.0%; 1H 2016: 95.6%). Average passing rent (net of VAT) stood at RMB354 per sqm, up 2.3% HoH and 4.4% YoY on the back of a respectable average rental reversions of 5.8%

(FY2016: 7.5%). For the leases that expired during the Reporting Period, retention rate remained healthy at 67.9%.

Summary of Operating Performance

For the six months ended	30-Jun-16	Change	31-Dec-16	Change	30-Jun-17
Average Monthly Passing Rent (RMB/sqm) − Gross passing rent	360	+6.7%	384	+3.6%	398
− Net passing rent	339	+2.1%	346	+2.3%	354
Average Occupancy (%)	96%	-3 ppts	93%	+1 ppts	94%