prospectus dated 2 december 2015 (registered by the ... - bhg retail...

This document is important. If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser.BHG Retail Trust Management Pte. Ltd., as manager of BHG Retail REIT (BHG Retail REIT, and the manager of BHG Retail REIT, the Manager), is making an offering (the Offering) of 151,169,000 units representing undivided interests in BHG Retail REIT (Units) for subscription at the Offering Price (as defined herein) (the Offering Units). The Offering consists of (i) an international placement to investors, including institutional and other investors in Singapore (the Placement Tranche) and (ii) an offering to the public in Singapore (the Public Offer). No less than 8,000,000 Units will be offered under the Public Offer. Beijing Hualian Department Store Co., Ltd. is the sponsor of BHG Retail REIT (the Sponsor).It is currently expected that the issue price of each Unit under the Offering will be S$0.80 per Unit (the Offering Price). DBS Bank Ltd. is the financial adviser and issue manager for the Offering (the Financial Adviser and the Issue Manager). The Offering is fully underwritten at the Offering Price by DBS Bank Ltd. (the Bookrunner and Underwriter) on the terms and subject to the conditions of the Underwriting Agreement (as defined herein).The total number of Units in issue as at the date of this Prospectus and prior to the Redemption (as defined herein) is 100 Units (the Initial Units). Separate from the Offering, the Initial Units will be redeemed by the Manager at S$1.00 per Unit (the Redemption). The total number of outstanding Units immediately after completion of the Offering and the Redemption will be 492,725,000 Units. The exercise of the Over-Allotment Option will not increase the total number of Units in issue.Separate from the Offering, Beijing Hua Lian Group (Singapore) International Trading Pte. Ltd. (the Strategic Investor), a company incorporated in Singapore that is a wholly owned subsidiary of Beijing Hualian Group Investment Holding Co., Ltd. (Beijing Hualian Group), a company incorporated in the PRC (as defined herein) holding 29.58% of the total issued equity interest of the Sponsor as at the Latest Practicable Date (as defined herein), has entered into a subscription agreement to subscribe for an aggregate of 148,310,300 Units (the Strategic Investor Units) at the Offering Price and Beijing Hualian Mall (Singapore) Commercial Management Pte. Ltd. (BHG Singapore), a company incorporated in Singapore that is a wholly owned subsidiary of the Sponsor, has entered into a subscription agreement to subscribe for an aggregate of 24,636,300 Units (the Sponsor Units) at the Offering Price, in each case 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 defined herein).In addition, concurrently with, but separate from the Offering, each of the Cornerstone Investors (as defined herein) has entered into a subscription agreement to subscribe for an aggregate of 168,609,400 Units (the Cornerstone Units) 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.Prior to the Offering, there has been no market for the Units. The offer of Units under this Prospectus will be by way of an initial public offering in Singapore (IPO). Application has been made to Singapore Exchange Securities Trading Limited (the SGX-ST) for permission to list on the Main Board of the SGX-ST (i) all Units comprised in the Offering, (ii) the Sponsor Units, (iii) the Strategic Investor Units, (iv) the Cornerstone Units, (v) all the Units which will be issued to the Manager from time to time in full or part payment of the Managers fees, and (vi) all the Units which will be issued to BHG Mall (Singapore) Property Management Pte. Ltd., a company incorporated in Singapore that is a wholly owned subsidiary of the Sponsor (the Property Manager) from time to time in full or part payment of the Property Managers fees. Such permission will be granted when BHG Retail REIT has been admitted to the Official List of the SGX-ST (the Listing Date). Acceptance of applications for Units will be conditional upon issue of the Units and upon permission being granted to list the Units. 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 benefit arising therefrom, and without any right or claim against any of BHG Retail REIT, the Manager, DBS Trustee Limited, as trustee of BHG Retail REIT (the Trustee), the Sponsor, the Financial Adviser, the Issue Manager or the Bookrunner and Underwriter.BHG Retail REIT has received a letter of eligibility from the SGX-ST for the listing and quotation of (i) all Units comprised in the Offering, (ii) the Sponsor Units, (iii) the Strategic Investor Units, (iv) the Cornerstone Units, and (v) all the Units which will be issued to the Manager and the Property Manager from time to time in full or part payment of the Managers or the Property Managers fees on the Main Board of the SGX-ST. BHG Retail REITs eligibility to list on the Main Board of the SGX-ST does not indicate the merits of the Offering, BHG Retail REIT, the Manager, the Trustee, the Sponsor, the Financial Adviser, the Issue Manager, the Bookrunner and Underwriter or the Units. 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, BHG Retail REIT, the Manager, the Trustee, the Sponsor, the Financial Adviser, the Issue Manager, the Bookrunner and Underwriter or the Units.BHG Retail REIT is a collective investment scheme authorised under the Securities and Futures Act, Chapter 289 of Singapore (the Securities and Futures Act or SFA). A copy of this Prospectus has been lodged with and registered by the Monetary Authority of Singapore (the MAS) on 23 November 2015 and 2 December 2015, 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 Securities and Futures Act or any other legal or regulatory requirements have been complied with. The MAS has not, in any way, considered the investment merits of the collective investment scheme. This Prospectus will expire on 1 December 2016 (12 months after the date of the registration of this Prospectus).See Risk Factors commencing on page 63 of this Prospectus for a discussion of certain factors to be considered in connection with an investment in the Units. None of the Manager, the Trustee, the Sponsor, the Financial Adviser, the Issue Manager or the Bookrunner and Underwriter guarantees the performance of BHG Retail REIT, the repayment of capital or the payment of a particular return on the Units.In particular, recipients of this Prospectus should note that the Strategic Investor has entered into a Distributions Undertaking (as defined herein) with the Trustee and the Manager pursuant to which the Strategic Investor has irrevocably and unconditionally undertaken and acknowledged that notwithstanding the provisions of the Trust Deed, it shall not be entitled to any distributions in relation to certain Strategic Investor Units in accordance with the Distributions Undertaking. The Strategic Investor will be entitled to receive full distributions on all the Strategic Investor Units in respect of the period from 1 January 2021. Upon the expiry of the Distributions Undertaking on 1 January 2021, the Properties may not be able to generate a level of income for distribution to the Unitholders that is commensurate with the levels attained with the support of the Strategic Investor under the Distributions Undertaking. The DPU (as defined herein) and the distribution yield is 0.76 Singapore cents and 5.7% (annualised) for the Forecast Period 2015 (as defined herein), and 5.08 Singapore cents and 6.3% for the Projection Year 2016 (as defined herein), based on the assumptions in this Prospectus. In the absence of the Distributions Undertaking, the DPU and the distribution yield would be 0.53 Singapore cents and 4.0% (annualised) for the Forecast Period 2015, and 3.56 Singapore cents and 4.5% for the Projection Year 2016, based on the assumptions in this Prospectus. See pages 65 to 68 of this Prospectus (Risk Factors Risks Relating to the Properties The Properties may not be able to generate a level of income for distribution to Unitholders (other than the Strategic Investor) that is commensurate with the levels attained with the Distributions Undertaking due to unforeseen circumstances.) for further details.

Investors who are members of the Central Provident Fund (CPF) in Singapore may not use their CPF Ordinary Account savings to purchase Units as an investment included under the CPF Investment Scheme Ordinary Account under the Public Offer. CPF members are allowed to invest up to 35.0% of the Investible Savings (as defined herein) in their CPF Ordinary Accounts to purchase Units in the secondary market only. Investors applying for Units by way of Application Forms (as defined herein) or Electronic Applications (both as referred to in Appendix G, Terms, Conditions and Procedures for Application for and Acceptance of the Units in Singapore) in the Public Offer will have to 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 (i) an application is rejected or accepted in part only, or (ii) if the Offering does not proceed for any reason. The agreement between the Bookrunner and Underwriter and the Manager to proceed with the Offering is expected to be entered into on 7 December 2015 upon the close of the Public Offer, with such notice to be published in one or more major Singapore newspapers such as The Straits Times, The Business Times and Lianhe Zaobao not later than two calendar days after such agreement has been entered into. In connection with the Offering, the Bookrunner and Underwriter has been granted an over-allotment option (the Over-Allotment Option) by BHG Singapore (the Unit Lender), exercisable by DBS Bank Ltd. (the Stabilising Manager) (or any of its affiliates or other persons acting on behalf of the Stabilising Manager), in full or in part, on one or more occasions, only from the Listing Date but no later than the earliest of (i) the date falling 30 days from the Listing Date; or (ii) the date when the Stabilising Manager (or its affiliates or other persons acting on behalf of the Stabilising Manager) has bought, on the SGX-ST, an aggregate of 24,636,300 Units, representing 16.3% of the total number of Units in the Offering, to undertake stabilising actions to purchase up to an aggregate of 24,636,300 Units (representing 16.3% of the total number of Units in the Offering), at the Offering Price. The exercise of the Over-Allotment Option will not increase the total number of Units outstanding. In connection with the Offering, the Stabilising Manager (or its affiliates or other persons acting on behalf of the Stabilising Manager) may, at its discretion, over-allot or effect transactions which stabilise or maintain the market price of the Units at levels that might not otherwise prevail in the open market. However, there is no assurance that the Stabilising Manager (or 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.Nothing in this Prospectus constitutes an offer for securities for sale in the United States of America (United States or U.S.) or any other jurisdiction where it is unlawful to do so. The Units have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the Securities Act) or the securities law of any state of the U.S. and accordingly, may not be offered or sold within the U.S. except in certain transactions exempt from or not subject to the registration requirements of the Securities Act. The Units are being offered and sold in offshore transactions as defined in and in reliance on Regulation S under the Securities Act (Regulation S).

(a real estate investment trust constituted on 18 November 2015 under the laws of the

Republic of Singapore)

PROSPECTUS DATED 2 DECEMBER 2015 (Registered by the Monetary Authority of Singapore on 2 December 2015)

(1) Based on the Offering Price and the accompanying assumptions in the Prospectus. In the absence of the Distributions Undertaking, the distribution yield would be 4.5% for the Projection Year 2016. Such yield will vary accordingly for investors who purchase Units in the secondary market at a market price different from the Offering Price.

First Pure-Play ChinaRetail REIT Sponsored

by a China-based Group

OFFERING OF 151,169,000 Units (subject to the Over-Allotment Option)OFFERING PRICE: S$0.80 PER UNIT

The minimum initial subscription is for 1,000 Units. An applicant may subscribe for a larger number of Units in integral multiples of 100

Financial Adviser, Issue Manager, Bookrunner and UnderwriterSponsor

Lead Manager Co-Managers (in alphabetical order)

BHG RETAIL TRUST MANAGEMENT PTE. LTD.100 Beach Road, Shaw Tower #25-11

Singapore 189702

Tel : +65 6805 8288

Fax : +65 6805 8277

Website : http://www.bhgreit.com

IPO PORTFOLIO OVERVIEW

BHGRETAIL REIT

A Singapore real estate investment trust (REIT) established with the investment strategy of investing principally, directly or indirectly, in a diversified portfolio of income-producing real estate which is used primarily (1) for retail purposes (whether either wholly or partially), as well as real estate-related assets in relation to the foregoing, with an initial focus on the Peoples Republic of China (PRC).

DALIAN JINSANJIAO PROPERTY(DALIAN PROPERTY)

XINING HUAYUAN MALL(XINING MALL)

HEFEI MENGCHENGLU MALL(HEFEI MALL)

CHENGDU KONGGANG MALL(CHENGDU MALL)

DALIAN Liaoning Province

HEFEI Anhui Province

BEIJING

CHENGDU Sichuan Province

XINING Qinghai Province

(1) The term primarily shall mean more than 50.0% of net lettable area (Net Lettable Area or NLA) or (in the case of a property where the concept of NLA is not applicable) GFA of a property is used for retail purposes. GFA for the purposes of this Prospectus means in relation to properties in China, the area specified in the House Ownership Certificate () or Real Estate Title Certificate () issued by the local building ownership administration bureau or the local real estate administration bureau, respectively of the PRC (the Building Ownership Certificate) for each property.

(2) Based on the Building Ownership Certificates of the Properties in the IPO Portfolio.(3) As at 30 June 2015. Based on the average of the two independent appraisal values for the Properties and a 60.0% interest in Beijing Mall. The appraisal value

for the Properties based on a 60.0% interest in Beijing Mall ranges from S$605.5 million to S$606.4 million. The average of the two independent appraisal values of the Properties based on 100.0% interest in Beijing Mall is RMB3.6 billion (approximately S$778.0 million). The appraisal value for the Properties based on 100.0% interest in Beijing Mall ranges from S$777.6 million to S$778.5 million.

5Retail PropertiesAggregate

GFA of

Total Appraised

Value of (approximately S$605.9 million)

263,688 sq m(2)

RMB2.8 billion(3)

BHG RETAIL REIT

6.3%(1)Distribution Yield for

Projection Year 2016(inclusive of the Distributions Undertaking)

60% INTEREST INBEIJING WANLIU MALL

(BEIJING MALL)

PR

OS

PE

CT

US

DA

TE

D 2 D

EC

EM

BE

R 2015

EXPERIENCED AND PROFESSIONAL MANAGEMENT TEAM Each of the Manager and the Property Manager Group (as defined herein) employs experienced

professionals with proven track record in asset management, property management, marketing, leasing, finance and treasury

ALIGNMENT OF INTEREST BETWEEN MANAGER AND UNITHOLDERS Management fees payable to the Manager have an incentive-based element which is designed to align

the interest of the Manager with those of the Unitholders through incentivising the Manager to grow distributable income

The Manager has elected to receive 100.0% of its Management Fees in the form of Units for the Forecast Period 2015 and the Projection Year 2016

STABLE AND GROWING DISTRIBUTIONS

FIRST PURE-PLAY CHINA RETAIL REITSPONSORED BY A CHINA-BASED GROUP Sponsored by Beijing Hualian Department Store Co., Ltd. (the Sponsor), an established PRC home

grown retail property operator

Strong PRC Economy The PRC has achieved a high level of growth in terms of

gross domestic product in the past decade Domestic consumption is set to act as the key driver of

Chinas future economic growth Abolishment of the one-child policy is expected to add

an average of 2.5 million newborns per year, resulting in an expected increase of RMB75.0 billion in consumption demand in the PRC

Strong Potential forRetail Properties in China The PRC is expected to become the worlds second largest

consumer market accounting for 14.0% of total global consumption by 2015

The PRC is well poised to overtake the U.S. to become the worlds largest retail market by 2018

Chinas retail space per capita is only one-fifth of that of the U.S., hence offering significant opportunities for future development and growth

Distributions Undertaking:The Strategic Investor has entered into a deed of distributions undertaking dated 23 November 2015 (the Distributions Undertaking) with the Trustee and the Manager, pursuant to which the Strategic Investor has irrevocably and unconditionally undertaken and acknowledged that notwithstanding the provisions of the Trust Deed, it shall not be entitled to any distributions in relation to certain of its Strategic Investor Units in accordance with the Distributions Undertaking to demonstrate its support for BHG Retail REIT and its commitment to the long-term growth and development of BHG Retail REIT. Viewed in totality with the Strategic Investors aggregate unitholding of 30.1%, the Distributions Undertaking reflects the Strategic Investors confidence in BHG Retail REIT and benefits Unitholders by augmenting the level of cash distribution that can be paid.The DPU and the distribution yield is 0.76 Singapore cents and 5.7% (annualised) for the Forecast Period 2015, respectively, and 5.08 Singapore cents and 6.3% for the Projection Year 2016, respectively. In the absence of the Distributions Undertaking, the DPU and the distribution yield would be 0.53 Singapore cents and 4.0% (annualised) for the Forecast Period 2015, respectively, and 3.56 Singapore cents and 4.5% for the Projection Year 2016, respectively.

THE BHG GROUP IS A LEADING INTEGRATED RETAIL GROUP IN CHINA WITH MORE THAN 20 YEARS OF RETAILING EXPERIENCEAs part of an integrated retail group that possesses an established background in retailing, the Sponsor is well-placed to understand the changing consumer trends and demands in the communities which the malls serve, enabling the Sponsor to optimise the retail mix of the malls.

KEY INVESTMENTHIGHLIGHTS

One of the first operators in China engaged in retail property management The Sponsor is the only operator whose focus is on the ownership

and management of community retail properties The Sponsors malls are positioned as one-stop family-oriented

destinations for the community in its locality, with shopping, dining, recreational and entertainment facilities to cater to an extensive variety of communal needs

Proven management platform The Sponsor has established a strong and efficient management

plateform supported by a dedicated and experienced management team

The Sponsor also leverages on the expertise of international consultants

Extensive network of existing and potential tenants The Sponsor possesses a large network of relationships with existing

and potential tenants. Brands represented in the Sponsors malls include international brands like H&M, Uniqlo, MUJI, Sephora, ESPRIT, Watsons, ToysRUs, Mothercare, BreadTalk, Starbucks, KFC and Pizza Hut

Together with BHG Hypermarkets supermarkets, these popular tenants draw in stable shopper traffic and enhance the profile of the malls

5 IPO Portfolio

Properties

12 Shopping Malls owned

by Sponsor (2)

26 Shopping Malls managed

by Sponsor (3)

Xizang(Tibet)

Qinghai

Xinjiang

Gansu Inner Mongolia

Sichuan

Yunnan

Guizhou

Guangxi

Chongqing

Jiangxi

Shaanxi

Liaoning

Jilin

Heilongjiang

Hunan

Guangdong

Fujian

Zhejiang

Hubei

Henan

ShanxiNingxia

Shandong

Jiangsu

HebeiBeijing

Tianjin

ShanghaiAnhui

Huhhot (1)

Huhhot Mall (1)

Chifeng (1)

Chifeng Mall (1)

Dalian (1)

Dalian Property

Taiyuan (1)

Shengli Mall (1)

Lanzhou (1)

Dongfanghong Mall

Qingdao (1)

Huangdao Mall (1)

Neijiang (1)

Neijiang Mall

Maanshan (1)

Maanshan Mall (1)

Haikou (1)

Haikou Mall (1)

Hefei (4)

Hefei Mall Changjiangxilu Mall Jinzhai Mall Heping Mall (1)

Wuhan (1)

Zhonghualu Mall(1) Properties under construction.(2) Shopping Malls owned by the Sponsor and which

are subject to the Voluntary Sponsor ROFR.(3) As at the Latest Practicable Date.(4) By Gross Floor Area (sq m).

Province with IPO portfolio properties Province with shopping malls owned by Sponsor Province with shopping malls managed by Sponsor

Baotou (2)

Gangtiedajie Mall (1)

Qingdonglu Mall (1)

Shenyang (3)

Shenyang Wulihe Mall Taiyuanjie Mall Beihang Mall (1)

Beijing (17)

Beijing Mall Tongchengjie Mall Guanganmen Mall Changying Mall Libao Mall Shangdi Mall Tiantongyuan Mall Huilongguan Mall Tianshi Mall

Nanjing (2)

Zijin Mall Zixin Mall

Xining (2)

Xining Mall Chuangxin Mall

Yinchuan (1)

Yinchuan Mall (1)

Chengdu (2)

Chengdu Mall Yanshikou Mall

Wuyi Mall Longbeicun Mall Shunyijinjie Mall Gongyixiqiao Mall Aolai Mall Datun Mall (1)

Pinggu Mall (1)

Shunyixincheng Mall (1)

Hainan

DPU Yield

4.0%

4.5%

Forecast Period 2015 Projection Year 2016

Without Distributions Undertaking (and based on distribution of 100% of BHG Retail REITs Distributable Income):

Growth

of 12.5

%

DPU Yield

5.7%

6.3%

Forecast Period 2015 Projection Year 2016

With Distributions Undertaking (and based on distributionof 100% of BHG Retail REITs Distributable Income):

Growth

of 10.

5%

GFA - Sq m

IPO Portfolio Voluntary SponsorROFR Properties

Enlarged Portfolio

292,430

398,350157,768

430,084587,852

263,688

722,514 986,202BeijingOther cities

105,920

Operational Synergies with Membersof the BHG Group The BHG Group is involved in four main businesses:

management of retail properties; operation of supermarkets/hypermarkets; operation of SKP Beijing, a luxury department store

located in Beijings Central Business District; and retail joint ventures and distributorships which include

internationally-renowned brands such as COSTA Coffee and Clarks

BHG Hypermarkets supermarkets are anchor tenants in every IPO portfolio property

Strong Acquisition Growth Pipeline of 12 properties identified under the Voluntary

Sponsor ROFR Potential to more than triple the IPO portfolio size(4) and

increase BHG Retail REITs presence to 11 cities in China

STRATEGICALLYLOCATED ASSETS IN HIGH-GROWTH CITIES

(1) Based on the Building Ownership Certificates of the Properties in the IPO Portfolio.(2) This is based on the Gross Floor Area under the Building Ownership Certificates and includes kiosks and pushcarts but does not include car park lots, common areas and

areas which cannot be leased.(3) As at 30 June 2015.(4) Occupancy rate is based on all current leases in respect of the Property for the period, including legally binding letters of offer which have been accepted for vacant

units, as a function of NLA.(5) Including tenants whose lease agreement are in the process of finalisation, the committed occupancy rate as at 31 October 2015 is 98.1%.(6) As at 31 August 2015.(7) The relevant Building Ownership Certificate in respect of the Dalian Property states that the GFA owned by Dalian Hualian (as defined herein) is 15,345.08 sq m and is

located on the underground storey. However, relevant documents supporting the purchase of the Dalian Property provide that the GFA is split between the above ground area of 1,746.95 sq m and the underground storey of 13,598.13 sq m. Although no changes will be made to the Building Ownership Certificate, as the subject matter of BHG Retail REITs acquisition and master lease to BHG Hypermarket is the full 15,345.08 sq m of space. Accordingly, the discrepancy is unlikely to result in any material adverse effect to BHG Retail REIT.

BEIJING MALL

HEFEI MALL

CHENGDU MALL

DALIAN PROPERTY

XINING MALL

Commencement of Operations August 2010GFA (1)/NLA (2) (sq m) 105,920 / 54,355Lease Type Multi-tenantedIndependent Valuations by DTZ (3) (S$m) 258.1 (Based on 60.0% interest of Beijing Mall)Independent Valuations by Knight Frank (3) (S$m) 258.3 (Based on 60.0% interest of Beijing Mall)Occupancy Rate (4) (%) 80.5 (5)Weighted Average Lease Expiry (by committed NLA) (6) 6.3

Only community mall with a premium positioning in Wanliu Close proximity to Zhongguancun only core retail hub in northwest Beijing Surrounded by key tertiary institutions such as Peking University, Tsinghua University and Renmin University Residents in the Wanliu region have higher education and higher expenditure per capita than comparable areas in Beijing Great accessibility to several main roads and bus lines with direct access to subway line 10 and the upcoming Xiangshan line

which is anticipated to be completed by 2016

Commencement of Operations February 2013GFA (1)/NLA (2) (sq m) 49,699 / 25,417Lease Type Multi-tenantedIndependent Valuations by DTZ (3) (S$m) 120.7Independent Valuations by Knight Frank (3) (S$m) 123.0Occupancy Rate (4) (%) 100.0Weighted Average Lease Expiry (by committed NLA) (6) 7.6

First comprehensive multi-tenanted retail mall in Hefei Situated in Luyang District where the average income of urban residents ranks higher than those in Hefeis other counties and

districts Surrounded by well-developed mature residential communities with high occupancy rates and high-quality office projects and

commercial facilities 5 minutes walk from two bus stations and easily accessed via several main roads

Commencement of Operations December 2013GFA (1)/NLA (2) (sq m) 71,916 / 40,053Lease Type Multi-tenantedIndependent Valuations by DTZ (3) (S$m) 132.8Independent Valuations by Knight Frank (3) (S$m) 129.8Occupancy Rate (4) (%) 98.0Weighted Average Lease Expiry (by committed NLA) (6) 5.6

Community retail mall located in an emerging residential area with a large number of mature and high-density residential projects Targets and serves the needs of upper-middle class shoppers in its catchment area as retail projects in its vicinity are

mostly smaller, one-storey shops 5 minutes drive to Shuangliu International Airport, and well-connected to several key highways and main roads in the vicinity

Commencement of Operations July 2000GFA (1)/NLA (2) (sq m) 15,345 (7) / 15,345Lease Type Master-leasedIndependent Valuations by DTZ (3) (S$m) 35.7Independent Valuations by Knight Frank (3) (S$m) 34.8Occupancy Rate (4) (%) 100.0Weighted Average Lease Expiry (by committed NLA) (6) 19.3

Only supermarket in the area and is popular among residents in its catchment area Situated in Jinsanjiao area, which is surrounded by mature residential projects Close proximity to the Huanan retail hub, the only key retail area in the north of Dalian Situated near many bus lines and enjoys easy access to main roads and other transportation infrastructure

Commencement of Operations August 2000GFA (1)/NLA (2) (sq m) 20,807 / 20,807Lease Type Master-leasedIndependent Valuations by DTZ (3) (S$m) 59.1Independent Valuations by Knight Frank (3) (S$m) 59.6Occupancy Rate (4) (%) 100.0Weighted Average Lease Expiry (by committed NLA) (6) 19.3

Located in Xining, the largest city in the Tibetan Plateau Situated in Ximen-Dashizi retail hub with high population density and immediate catchment of approximately 300,000

residents Shoppers in the area are mostly individuals with middle or upper-middle level income who have a relatively high awareness

of international brands, and are willing to spend more on retail goods and services Well-connected with several main roads and bus lines in the vicinity

KEY STRATEGIES

Active Asset Management The Manager will pro-actively manage BHG Retail REITs property

portfolio and strive to achieve growth in revenue and net property income and maintain high occupancy levels

The Manager will also look to drive organic growth and build long-lasting relationships with the tenants of BHG Retail REITs properties

Active Asset Enhancement The Manager will seek to implement property enhancement

opportunities to support and enhance organic growth so as to optimise the cash flow and value of the Properties

IMPORTANT DATES

Event Date & Time

Opening Date and Time for the Public Offer 2 December 2015, 9.00 p.m.

Closing Date and Time for the Public Offer 7 December 2015, 12 noon

Commence trading on a ready basis 11 December 2015, 2.00 p.m.

Acquisition Growth by Leveraging on theSponsors Experience and Supported by the ROFRs The Manager will achieve portfolio growth through the acquisition

of quality income-producing retail properties (which include the properties under the Voluntary Sponsor ROFR) that provide attractive cash flows and yields

Capital and Risk Management The Manager will endeavour to employ an appropriate mix of debt

and equity in financing acquisitions and asset enhancements, and utilise hedging strategies, where appropriate from time to time, to manage interest rate volatility and foreign exchange exposure for BHG Retail REIT

TABLE OF CONTENTS

Page

NOTICE TO INVESTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

CERTAIN DEFINED TERMS AND CONVENTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii

MARKET AND INDUSTRY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix

OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

OWNERSHIP OF THE UNITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

EXCHANGE RATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

CAPITALISATION AND INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

UNAUDITED PRO FORMA FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . 139

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144

PROFIT FORECAST AND PROFIT PROJECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

OVERVIEW OF ACQUISITION OF THE IPO PORTFOLIO . . . . . . . . . . . . . . . . . . . . . . . 172

STRATEGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185

BUSINESS AND PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193

THE MANAGER AND CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . 240

THE SPONSOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274

THE FORMATION AND STRUCTURE OF BHG RETAIL REIT . . . . . . . . . . . . . . . . . . . . 278

CERTAIN AGREEMENTS RELATING TO BHG RETAIL REIT AND THE

PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291

OVERVIEW OF RELEVANT LAWS AND REGULATIONS IN THE PEOPLES REPUBLIC

OF CHINA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325

TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336

PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347

CLEARANCE AND SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363

EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364

REPORTING AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366

GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367

GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372

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

i

Page

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION . . . . . . . . . C-1

APPENDIX D INDEPENDENT TAXATION REPORT . . . . . . . . . . . . . . . . . . . . . . . . D-1

APPENDIX E INDEPENDENT PROPERTY VALUATION SUMMARY REPORTS . . . . E-1

APPENDIX F INDEPENDENT MARKET RESEARCH REPORT . . . . . . . . . . . . . . . F-1

APPENDIX G TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION

FOR AND ACCEPTANCE OF THE UNITS IN SINGAPORE . . . . . . . G-1

APPENDIX H LIST OF PRESENT AND PAST PRINCIPAL DIRECTORSHIPS OF

DIRECTORS AND EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . . . H-1

ii

NOTICE TO INVESTORS

No person is authorised to give any information or to make any representation 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 BHG Retail REIT, the Manager, the Trustee, the

Sponsor, the Financial Adviser, the Issue Manager or the Bookrunner and Underwriter. If anyone

provides you with different or inconsistent information, you should not rely upon 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 herein is correct as of 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 BHG Retail REIT, the Manager, the Trustee, the Units or the Sponsor

since the date on the front 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 Manager will make an announcement of the same to the SGX-ST and, if required,

lodge and issue a supplementary document or replacement document pursuant to Section 298 of

the Securities and Futures Act and take immediate steps to comply with the said Section 298.

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.

The Strategic Investor has entered into a Distributions Undertaking with the Trustee and theManager, pursuant to which the Strategic Investor has irrevocably and unconditionally undertakenand acknowledged that notwithstanding the provisions of the Trust Deed, it shall not be entitled toany distributions in accordance with the Distributions Undertaking to demonstrate its support forBHG Retail REIT and its commitment to the long-term growth and development of BHG Retail REIT.Under the Distributions Undertaking, the Strategic Investor shall not be entitled to any distributionson (i) the aggregate of 147,817,500 Strategic Investor Units constituting 30.0% of the total numberof Units on the Listing Date immediately after the completion of the Offering, in respect of thedistribution period from the date of issuance of the Strategic Investor Units up to and including 31December 2016; (ii) the aggregate of 135,499,375 Strategic Investor Units constituting 27.5% ofthe total number of Units on the Listing Date immediately after the completion of the Offering, inrespect of the distribution period from 1 January 2017 up to and including 31 December 2017; (iii)the aggregate of 123,181,250 Strategic Investor Units constituting 25.0% of the total number ofUnits on the Listing Date immediately after the completion of the Offering, in respect of thedistribution period from 1 January 2018 up to and including 31 December 2018; (iv) the aggregateof 73,908,750 Strategic Investor Units constituting 15.0% of the total number of Units on the ListingDate immediately after the completion of the Offering, in respect of the distribution period from 1January 2019 up to and including 31 December 2019, and (v) the aggregate of 24,636,250Strategic Investor Units constituting 5.0% of the total number of Units on the Listing Dateimmediately after the completion of the Offering, in respect of the distribution period from 1 January2020 up to and including 31 December 2020. (See Certain Agreements Relating to BHG RetailREIT and the Properties Distributions Undertaking for further details.)

492,800 of the Strategic Investor Units constituting 0.1% of the total number of Units on the ListingDate immediately after the completion of the Offering are not subject to the DistributionsUndertaking.

The Strategic Investor will be entitled to receive full distributions on all of the Strategic InvestorUnits in respect of the period from 1 January 2021.

Following the expiry of the Distributions Undertaking on 1 January 2021, the Properties may not beable to generate a level of income for distribution to the Unitholders that is commensurate with thelevels attained with the support of the Strategic Investor under the Distributions Undertaking.

(See Risk Factors Risks Relating to the Properties The Properties may not be able to generatea level of income for distribution to Unitholders (other than the Strategic Investor) that iscommensurate with the levels attained with the Distributions Undertaking due to unforeseencircumstances.)

iii

None of BHG Retail REIT, the Manager, the Trustee, the Sponsor, the Financial Adviser, the Issue

Manager and the Bookrunner and Underwriter or any of their respective affiliates, directors,

officers, employees, agents, representatives or advisers is making any representation or

undertaking to any purchaser or subscriber of Units regarding the legality of an investment by

such purchaser or subscriber under appropriate legal, investment or similar laws. In addition,

investors in the Units should not construe the contents of this Prospectus as legal, business,

financial or tax advice. Investors should be aware that they may be required to bear the financial

risks of an investment in the Units for an indefinite period of time. Investors should consult their

own professional advisers as to the legal, tax, business, financial and related aspects of an

investment in the Units.

Copies of this Prospectus and the Application Forms may be obtained on request, subject to

availability, during office hours, from:

DBS Bank Ltd.

12 Marina Boulevard

Level 46 DBS Asia Central @ Marina Bay

Financial Centre Tower 3

Singapore 018982

and, where applicable, from members of the Association of Banks in Singapore, members of the

SGX-ST and merchant banks in Singapore. A copy of this Prospectus is also available on the

SGX-ST website: http://www.sgx.com.

The Units have not been and will not be registered under the Securities Act and, accordingly, may

not be offered or sold within the U.S. except in certain transactions exempt from, or not subject

to, the registration requirements of the Securities Act. The Units are being offered and sold in

offshore transactions as defined in and in accordance with Regulation S.

The distribution of this Prospectus and the offering, subscription, placement, purchase, sale or

transfer of the Units in certain jurisdictions may be restricted by law. BHG Retail REIT, the

Manager, the Trustee, the Sponsor, the Financial Adviser, the Issue Manager and the Bookrunner

and Underwriter 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 BHG Retail REIT, the Manager, the Trustee, the Sponsor, the Financial Adviser, the Issue

Manager and the Bookrunner and Underwriter. This Prospectus does not constitute, and the

Manager, the Trustee, the Sponsor, the Financial Adviser, the Issue Manager and the Bookrunner

and Underwriter are not making, an offer of, or an invitation to subscribe for or purchase, any of

the Units in any jurisdiction in which such offer or invitation would be unlawful. 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.

In connection with the Offering, the Stabilising Manager (or any of its affiliates or other persons

acting on behalf of the Stabilising Manager) may, at its discretion, over-allot or effect transactions

which stabilise or maintain the market price of the Units 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

earliest 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 24,636,300 Units, representing 16.3% of the total number

of Units in the Offering, to undertake stabilising actions to purchase up to an aggregate of

iv

24,636,300 Units (representing 16.3% of the total number of Units in the Offering), at the Offering

Price. The exercise of the Over-Allotment Option will not increase the total number of Units

outstanding.

Personal Data Protection Act

For the purposes of the Personal Data Protection Act 2012 of Singapore (PDPA), you consent

and acknowledge that all Personal Data (as defined in the PDPA) provided by you to the Manager,

the Trustee, BHG Retail REIT, the Financial Adviser, the Issue Manager, and the Bookrunner and

Underwriter or any of their respective agents, may be collected, used, disclosed or otherwise

processed in order for the Manager, the Trustee, BHG Retail REIT, the Financial Adviser, the Issue

Manager, and the Bookrunner and Underwriter or any of their respective agents, to carry out their

respective duties and obligations in relation to any investment by you into BHG Retail REIT, for

each of the purposes as set out in this section or as may be permitted under the PDPA.

v

FORWARD-LOOKING STATEMENTS

Certain statements in this Prospectus constitute forward-looking statements. This Prospectus

also contains forward-looking financial information in Profit Forecast and Profit Projection. 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 BHG Retail REIT, the Manager, the Sponsor, 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 the Managers present and future business

strategies and the environment in which BHG Retail REIT, the Manager or the Sponsor will

operate in the future. Because these statements and financial information reflect the current views

of the Manager and the Sponsor 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 undue reliance on these forward-looking statements.

Among the important factors that could cause the actual results, performance or achievements of

BHG Retail REIT, the 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 in Singapore and the Peoples Republic of China (the PRC or China), changes in

government laws and regulations affecting BHG Retail REIT, competition in the property markets

of Singapore and the PRC in which BHG Retail REIT may invest, industry, currency exchange

rates, interest rates, inflation, relations with service providers, relations with lenders, hostilities

(including future terrorist attacks), the performance and reputation of BHG Retail REITs

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, general volatility of the capital markets, general risks relating to the

property market in which BHG Retail REIT may invest and the market price of the Units as well

as other matters not yet known to the Manager or not currently considered material by the

Manager. 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 Manager expressly

disclaims any obligation or undertaking to release publicly any updates of or revisions to any

forward-looking statement or financial information contained herein to reflect any change in the

expectations of the Manager 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 and/or the rules of the SGX-ST and/or any

other relevant regulatory or supervisory body or agency.

vi

CERTAIN DEFINED TERMS AND CONVENTIONS

BHG Retail REIT will publish its 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, references to RMB or Renminbi are to the lawful currency of the PRC, and

references to US$, US dollars or USD are to the lawful currency of the United States.

References to the Peoples Republic of China, the PRC or China are, for the purposes of this

Prospectus, to mainland China.

For the readers convenience, except where the exchange rate is expressly stated otherwise,

Renminbi amounts in this Prospectus have been translated into Singapore dollars based on the

fixed exchange rate of S$1.00: RMB4.60.

However, such translations should not be construed as representations that Renminbi amounts

have been, could have been or could be converted into Singapore dollars at that or any other rate

and vice versa (see Exchange Rate Information for further details).

The latest practicable date prior to the lodgement of this Prospectus with the MAS is 13 November

2015 (the Latest Practicable Date).

Unless otherwise defined, capitalised terms used in this Prospectus shall have the meanings set

out in the Glossary.

The forecast and projected distribution per Unit (DPU) yields are calculated based on the

Offering Price and assumed exchange rates as set out in this Prospectus. Such yields and yield

growth will vary accordingly for investors who purchase Units in the secondary market at a market

price different from the Offering Price, and according to differences between actual and assumed

exchange rates.

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 unless otherwise indicated. Measurements in square metres (sq

m) are converted to square feet (sq ft) and vice versa based on the conversion rate of 1 sq m

= 10.7639 sq ft. References to Appendix or 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.

References to the English names of the tenants of the IPO Portfolio (as defined herein) are to the

English trade names, or English translations of the Chinese trade names, which the respective

tenants carry on business under.

Unless otherwise specified, all information relating to the Properties in this Prospectus are as at

31 August 2015 (see Business and Properties for details regarding the Properties).

Unless otherwise specified, references to:

GFA for the purposes of this Prospectus means in relation to properties in China, the area

specified in the House Ownership Certificate () or Real Estate Title Certificate() issued by the local building ownership administration bureau or the local realestate administration bureau, respectively of the PRC (the Building Ownership

Certificate) for each property;

vii

Gross Rental Income in relation to the Properties consists of (i) Fixed Rent, being rental

income received or receivable (after adjusting for leasing incentives such as rent rebates and

rent-free periods where applicable, but excluding Turnover Rent, where applicable); (ii)

Turnover Rent, which is generally calculated as a pre-determined percentage of the

tenants gross turnover; (iii) master lease income; and (iv) Service fee, which is a

contribution paid by tenants towards covering the operation and property maintenance

expenses of the Properties; and

primarily when used in relation to the phrase primarily for retail purposes shall mean

more than 50.0% of net lettable area (Net Lettable Area or NLA) or (in the case of a

property where the concept of NLA is not applicable) GFA of a property is used for retail

purposes.

viii

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 information.

The Manager has commissioned DTZ Debenham Tie Leung Limited (the Independent Market

Research Consultant) to prepare the independent market research report (the Independent

Market Research Report) (see Appendix F, Independent Market Research Report for further

details). While the Manager has taken reasonable steps to ensure that the information is extracted

accurately and in its proper context, the Manager has not independently verified any of the data

from third-party sources or ascertained the underlying economic assumptions relied upon therein.

Consequently, none of BHG Retail REIT, the Manager, the Trustee, the Sponsor, the Financial

Adviser, the Issue Manager and the Bookrunner and Underwriter 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.

The Trustee and the Manager have appointed DTZ Debenham Tie Leung Limited (DTZ) and

Knight Frank Petty Limited (Knight Frank) as the independent valuers of the Properties (the

Independent Valuers) (see Appendix E, Independent Property Valuation Summary Reports for

further details).

ix

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OVERVIEW

The following section 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

section can be found in the Glossary or in the trust deed constituting BHG Retail REIT dated

18 November 2015 (and as may be amended, modified, varied or supplemented from time to time)

(the Trust Deed). A copy of the Trust Deed can be inspected at the registered office of the

Manager, which is located at 100 Beach Road, Shaw Tower #25-11, Singapore 189702 (prior

appointment would be appreciated).

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 and uncertainties which could cause

actual results of BHG Retail REIT to differ materially from the forecast or projected results of BHG

Retail REIT (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 BHG Retail REIT, the

Manager, the Trustee, the Sponsor, the Financial Adviser, the Issue Manager, the Bookrunner and

Underwriter or any other person or that these results will be achieved or are likely to be achieved.

Investing in the Units 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

BHG Retail REITs businesses and risks.

OVERVIEW OF BHG RETAIL REIT

BHG Retail REIT is a Singapore real estate investment trust (REIT) established with the

investment strategy of investing principally, directly or indirectly, in a diversified portfolio of

income-producing real estate which is used primarily1 for retail purposes (whether either wholly or

partially), as well as real estate-related assets in relation to the foregoing, with an initial focus on

China.

(See Strategy for further details.)

Key Objectives

The Managers key financial objectives are to provide unitholders of BHG Retail REIT

(Unitholders) with an attractive rate of return on their investment through regular and stable

distributions to Unitholders and to achieve long-term sustainable growth in DPU and net asset

value (NAV) per Unit, while maintaining an appropriate capital structure for BHG Retail REIT.

BHG Retail REIT is focused on investing in quality retail properties which are strategically located

in Tier 1, Tier 2 and other cities of significant economic potential in China.

1 The term primarily shall mean more than 50.0% of NLA or (in the case of a property where the concept of NLA

is not applicable) GFA of a property is used for retail purposes.

1

IPO Portfolio

The initial portfolio of BHG Retail REIT (the IPO Portfolio) will comprise five retail properties

strategically located in Tier 1, Tier 2 and other cities of significant economic potential in China,

with an aggregate GFA of approximately 263,6881 sq m and a total appraised value of

approximately RMB2.8 billion2 (equivalent to approximately S$605.9 million) as at 30 June 2015.

The IPO Portfolio consists of:

a 60.0% interest in Beijing Wanliu Mall () (Beijing Mall). Beijing Mallis located at No. 2 Bagou Road, between the north-western part of Third Ring Road and

Fourth Ring Road at Haidian District in the north-western area of downtown Beijing. Beijing

Mall comprises seven storeys and is in close proximity to Zhongguancun and surrounded by

high-end residential developments and educational institutions including several

universities;

Hefei Mengchenglu Mall () (Hefei Mall). Hefei Mall is locatedat No. 99 Mengcheng Road. Hefei Mall comprises seven storeys and is located in the North

First Ring retail hub, which comprises several mature residential communities, a number of

government organisations and high quality office projects;

Chengdu Konggang Mall () (Chengdu Mall). Chengdu Mall islocated at No. 166 Jinhua Road, Shuangliu County in Chengdu, Sichuan Province. Chengdu

Mall comprises seven storeys and is located in an emerging residential area which comprises

high density residential communities and targets upper middle class shoppers including

young families with children;

the 15,345.08 sq m of space known as Dalian Jinsanjiao Property ()(Dalian Property). The Dalian Property is located at No. 18 Huadong Road in Dalian in

Xinhe Building. It is located in the Jinsanjiao area not far from the Huanan retail hub and is

easily accessible by major transportation networks and is located at the traditional residential

area of Jinsanjiao providing a steady stream of customers. The Dalian Property is master

leased to Beijing Hualian Hypermarket Co., Ltd. (BHG Hypermarket) which is listed on the

Shanghai Stock Exchange (see The Sponsor Beijing Hualian Group for further details);

and

Xining Huayuan Mall () (Xining Mall). Xining Mall is located at No.16-19 Shipo Street in Xinings Ximen-Dashizi retail hub which is the political, cultural and

business centre of Xining with a high population density targeting individuals with middle or

upper-middle level income. Xining Mall comprises four storeys and is under a master lease

with BHG Hypermarket as the master lessee,

(together, the Properties).

(See Business and Properties for further details.)

1 Based on the Building Ownership Certificates of the Properties in the IPO Portfolio (see Certain Defined Terms and

Convention for details regarding the computation of GFA).

2 Based on the average of the two independent appraisal values for the Properties and a 60.0% interest in Beijing

Mall. The appraisal value for the Properties based on a 60.0% interest in Beijing Mall ranges from S$605.5 million

to S$606.4 million. The average of the two independent appraisal values of the Properties based on 100.0% interest

in Beijing Mall is RMB3.6 billion (equivalent to approximately S$778.0 million). The appraisal value for the Properties

based on 100.0% interest in Beijing Mall ranges from S$777.6 million to S$778.5 million.

2

KEY INVESTMENT HIGHLIGHTS

The Manager commissioned the Independent Market Research Consultant to prepare an

independent market research report of the real estate and economic markets in the PRC,

especially in Beijing, Hefei, Chengdu, Dalian and Xining for the purpose of inclusion in this

Prospectus. All information about the location of the Properties, the real estate and economic

markets in the PRC in the Key Investment Highlights is extracted from Appendix F, Independent

Market Research Report. See Appendix F for further details1.

The Manager believes that an investment in BHG Retail REIT offers the following attractions to

Unitholders:

(1) First pure-play China retail REIT sponsored by a China-based group

BHG Retail REIT is the first retail REIT sponsored by an established PRC homegrown retail

property operator, Beijing Hualian Department Store Co., Ltd., or the Sponsor.

The IPO Portfolio comprises five retail properties located in strategic cities throughout China

valued at approximately RMB2.8 billion2 (equivalent to approximately S$605.9 million) as at

30 June 2015.

In view of the quality and location of the assets as well as the lease expiry profiles, the

Manager believes that the Properties will deliver stable income and potential for long-term

growth in distribution to Unitholders, and allow Unitholde

prospectus dated 2 december 2015 (registered by the ... - bhg retail...

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