Perennial Real Estate Holdings Limited - Annual Report 2017

Dear Shareholders, OVERVIEW Strategy Taking Shape It has been three fruitful years since we strategically positioned ourselves as a leading integrated real estate and healthcare company and undertook the pursuit of our integrated real estate and healthcare business strategy in China. Today, as a real estate owner, developer and manager, Perennial’s real estate portfolio comprises 10 large-scale integrated developments and five commercial and retail assets located in its core markets of Singapore and China, as well as in Malaysia and Ghana. Known for our focus on prime real estate with excellent connectivity, Perennial’s assets are predominantly connected or in close proximity to key transportation hubs. Notably, two of the large-scale integrated developments are landmark projects in China which are located adjacent and connected to the two largest High Speed Railway (“ HSR ”) stations in the country. To showcase our integrated real estate and healthcare business model in China, we positioned Chengdu East HSR Integrated Development (“ Chengdu HSR Development ”), one of our two HSR projects, as the signature development. In addition to traditional real estate, we introduced healthcare real estate and services to the Chengdu HSR Development to capture the synergies that can be created between the various components within the precinct. business in the country as an owner, operator and provider of quality services in the core segments of Hospital and Medical Centres and Eldercare and Senior Housing , as well as supporting specialties through acquisitions and joint ventures with the finest operators in the market. Under the Hospitals and Medical Centres segment , we set our sights on developing our expertise in five core lines, namely General Hospitals, Specialist Medical Centres, Women and Children Hospitals, Geriatric and Rehabilitation Hospitals and Traditional Chinese Medicine Hospitals. Under the Eldercare and Senior Housing segment , we will focus on providing senior housing facilities for independent living, assisted living and nursing care. Underpinning these two business segments are supporting specialties in Genomics and Diagnostic Imaging , Plastic Surgery and Aesthetics as well as Maternal and Child Health Management . The expansion of our healthcare business has been remarkable, particularly in the Eldercare and Senior Housing segment. Today, we have a combined portfolio of 25 operational facilities with a bed capacity of over 4,100. Together with our real estate business presence, Perennial now has a foothold in 12 key cities across China. With China’s rapidly ageing population and the government’s focus on quality integrated elderly care, our ability to extend our medical and healthcare expertise and services to our eldercare and senior housing facilities will drive the growth of both of our core healthcare business segments. In the longer term, we expect the Eldercare and Senior Housing segment to become the key driver of our healthcare business and we will leverage on our successful three-pronged leasing, Public-Private-Partnership (“ PPP ”) and acquisition model to accelerate growth. Furthermore, with the robust demand for quality medical care driven by healthcare reforms and economic growth, coupled with the strong adoption of HSR as a transport mode and the expansive growth of the HSR network, our HSR healthcare integrated mixed-use developments are well-placed to serve as one-stop regional healthcare hubs. This year will mark the opening of the highly anticipated PIHMH and Chengdu Xiehe Home which are located at the Chengdu HSR Development, bringing our first integrated real estate and healthcare signature showcase to fruition. With China’s rapidly ageing population and the government’s focus on quality integrated elderly care, our ability to extend our medical and healthcare expertise and services to our eldercare and senior housing facilities will drive the growth of both of our core healthcare business segments. Our strategic venture into the healthcare business in China has provided us with not only a competitive edge in securing large scale healthcare integrated developments, but also the flexibility in managing our healthcare real estate by either leasing the space to third party operators or furnishing the space with our holistic range of in-house medical, healthcare and eldercare services. Build on Successful HSR Healthcare Integrated Mixed-use Development Model by Leveraging on US$1.2 billion Joint Venture (“JV”) to Grow HSR Portfolio This year will mark the opening of the highly anticipated Perennial International Health and Medical Hub (“ PIHMH ”) and Chengdu Xiehe International Eldercare and Retirement Home (“ Chengdu Xiehe Home ”) which are located at the Chengdu HSR Development, bringing our first integrated real estate and healthcare signature showcase to fruition. To build on this integrated model, we recently established an up to US$1.2 billion Perennial-syndicated JV with an initial capital commitment of US$500 million in January 2018 to invest in HSR healthcare integrated mixed-use developments in tier one and/or strong tier two cities and provincial capitals in China. The JV also provides an asset-light platform for us to potentially grow our HSR portfolio from two to eight projects with a total gross floor area of over 4 million square metres, positioning Perennial as a leading player with the largest HSR portfolio. Healthcare Strategy with Eldercare and Senior Housing to Lead Growth While we laboured to establish our first integrated healthcare signature showcase in China, we concurrently built our healthcare Annual Report 2017 16 PERENNIAL REAL ESTATE HOLDINGS LIMITED LETTER TO SHAREHOLDERS

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