Milestones Hektar maintained steady progress since 2002 Emphasis on asset enhancement Constant lookout for yield-accretive acquisitions 2004 Acquisiti

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1 Sustainable Performance over the decade HEKTAR REAL ESTATE INVESTMENT TRUST ANNUAL REPORT A Decade of Stability HEKTAR REAL ESTATE INVESTMENT TRUST ANNUAL REPORT 2016 Quality Assets Hektar s Portfolio consists of mainly neighbourhood-focused shopping centres throughout Malaysia. %Average Distribution Yield 10 years 8.0over 96.0% Average Portfolio Occupancy Rate over 10 years Value Creation 10CAGR of Steady track record of value creation since IPO (RM million) Total Net Lettable Area 1,778, ,900 square feet Gross Revenue RM million Years Undisrupted Quarterly DPU since IPO 7.8% Hektar Real Estate Investment Trust (Hektar REIT) is Malaysia s first retail focused REIT. Hektar REIT s principal objective is to provide its Unitholders with a defensible income distribution and to enhance the long-term value of the fund. Hektar REIT invests in income-producing real estate primarily used for retail purposes. Hektar REIT s portfolio currently consists of quality shopping centres situated in Subang Jaya, Melaka, Muar, Sungai Petani and Kulim with a combined value of RM1.09 billion. Hektar REIT was listed on the Main Board of Bursa Malaysia Securities Berhad on 4 December 2006 and has continuously recorded stable perfomance since its listing. The REIT s cornerstone investor is Frasers Centrepoint Trust, part of the Fraser & Neave Group, headquartered in Singapore. Hektar REIT is managed by Hektar Asset Management Sdn Bhd, and was formed with a vision to develop world-class shopping centres for Malaysian consumers, based on international best practices. Asset Under Management RM million RM billion Number of Assets 2 5 shopping malls Net Property Income RM million Net Asset Value per Unit Ringgit Malaysia *13 months period for FY 2007 (since IPO 4 December 2006 to 31 December 2007)

2 Milestones Hektar maintained steady progress since 2002 Emphasis on asset enhancement Constant lookout for yield-accretive acquisitions 2004 Acquisition Phase Completed acquisition of Subang Parade in 2003 and Mahkota Parade in Entry of Frasers Centrepoint Trust (FCT) as Cornerstone Investor Frasers Centrepoint Trust acquired a 27% stake in Hektar REIT 2006 Bursa Listing Hektar REIT listed on the main board of Bursa Malaysia Securities Berhad on 4 December 2006 as Malaysia s first retail-focused REIT. Portfolio valued at RM512 million 2008~ st Expansion Completion of Wetex Parade acquisition for RM117.5 million 2 nd Expansion Completed acquisition of Landmark Central Shopping Centre and Central Square Shopping Centre for RM181 million Total assets value after acquisition > RM1 billion ~ rd Expansion Proposed acquisition of 1Segamat Shopping Mall Asset Enhancement Initiatives Post acquisition asset enhancement initiative at Landmark Central Asset Enhancement Initiatives Central Square relaunched after an extensive RM23 million asset enhancement initiative Completion and re-launch of the cinema expansion at Mahkota Parade, from 4 screens to 10 screens 2002 Feasibility & Conceptual Phase Formation of Hektar Feasibility studies on Subang Parade and Mahkota Parade 2005 Asset Enhancement & Revitalisation Revitalised and enhanced Subang Parade and Mahkota Parade profiles to create delightful shoppers experience Tribute to our latechairman (Nov Jan 2017) 2009 Awards In 2008, Subang Parade won a Silver Award for Development & Design at the International Council of Shopping Centers Asia Pacific Awards Mahkota Parade won a Silver Award in the Community Relations Category at the International Council of Shopping Centers Asia Pacific Awards in 2009 Dato Jaafar bin Abdul Hamid was the founder and principal shareholder of the Hektar Group of Companies. Serving as Chairman and Chief Executive Officer of Hektar Asset Management Sdn Bhd, the asset manager of Hektar REIT since 2006, he was the face of the REIT. Hektar REIT s portfolio has grown from two to five shopping malls under his tenure and the REIT has continuously shown strong and sustainable performance. In May 2016, Dato Jaafar retired as Chief Executive Officer, but remained as Non-Executive Chairman of Hektar Asset Management Sdn Bhd until his demise on 24 January 2017.

3 A decade of stability 2016 marks a milestone as Hektar REIT celebrates its 10-year anniversary. Since its listing on 4 December 2006, Hektar REIT has shown stable and strong financial performance. The REIT will continue to strive for a solid and defensible portfolio, and to create sustainable value to its stakeholders. Contents HIGHLIGHTS 2 Financial Highlights 3 Portfolio Highlights Management Discussions and Analysis 4 Corporate Vision and Strategy 5 Letter to Unitholders 14 Portfolio Performance Sustainability and Corporate Governance 30 Corporate Social Responsibility 32 Corporate Organisation 33 Corporate Directory 34 The Board of Directors 37 The Management Team 40 Investor Communications 41 Manager s Report 44 Corporate Governance 49 Statement by Manager 50 Statutory Declaration 51 Trustee s Report 52 Independent Auditors Report FINANCIALS 56 Statement of Financial Position 57 Statement of Profit or Loss and other Comprehensive Income 59 Statement of Changes in Net Asset Value 60 Statement of Cash Flows 62 Notes to the Financial Statements OTHERS 94 Analysis of Unitholders 97 Glossary

4 HEKTAR REAL ESTATE INVESTMENT TRUST ANNUAL REPORT Financial Highlights PROFIT & LOSS For Financial Year ended 31 December RM 000 FY2016 FY2015 FY 2014 FY 2013 FY2012 Gross Revenue 124, , , , ,232 Direct Cost & Property Expenses 50,236 49,028 48,714 46,120 39,485 Net Property Income (NPI) 74,335 76,483 73,277 74,115 63,747 Net Income 43,158 4,759 50,387 58,766 58,470 Earnings Per Unit* ** Net Income Realised 41,546 44,693 44,261 46,134 39,758 Net Income Per Unit Realised (sen) ** Income Distribution 42,067 42,067 42,067 42,067 35,777 Distribution Per Unit (DPU) (sen) Change in Unit Price (sen) (1.0) Annual Total Return per Unit (sen) Annual Total Return per Unit (%)*** * Include unrealised income ** Calculated based on Weighted Average No. of Units in Circulation of 340,159,279. *** Calculated based on the Closing Price of each year Balance Sheet As at 31 December RM 000 FY2016 FY2015 FY 2014 FY 2013 FY2012 Total Assets 1,130,809 1,116,315 1,110,046 1,085,103 1,066,267 Total Liabilities 545, , , , ,789 Total Borrowings 508, , , , ,100 Gearing Ratio (%) No. of Units in Circulation (Units) 400, , , , ,634 Net Asset Value (NAV) 585, , , , ,664 NAV per Unit (RM) Lowest NAV during the period (RM) Highest NAV during the period (RM) Unit Price as at 31 December (RM) Premium/(Discount) to NAV (%) (3.9) (2.0) (2.0) COMPARATIVE YieldS FY2016 Unit Price Performance FY2016 Debt Expiry Profile As at 31 December % 6% 6.7% 5.7% RM % RM million 600 RM486 m RM531 m 4% 3.9% 3.6% 3.2% % RM45 m 0% Hektar REIT Distribution Yield 10-year Bond (MGS) 5-year Bond (MGS) 12-months Fixed Deposit EPF Dividend Yield (2016) 1.45 Jan Mar Jun Sep Dec 0 FY2019 FY2020 FY2021 n Tranche 1 RM184 mil n Tranche 2 RM150 mil n Tranche 3 RM15 mil n Tranche 4 RM87 mil Total facilities available n Tranche 5 RM65 mil n Tranche 6 RM30 mil

5 Highlights Õ Management Discussions and Analysis Õ Sustainability and Corporate Governance Õ Financials Õ OTHERS Portfolio Highlights 3 Income Distributions FY2016 Interim 1 st Quarter DPU Interim 2 nd Quarter DPU Interim 3 rd Quarter DPU Final 4 th Quarter DPU Total DPU 2.60 sen 2.60 sen 2.60 sen 2.70 sen sen DPU Yield* 6.7% *Based on DPU of sen and the Closing Unit Price of RM1.56 for FY2016. Source: Bloomberg Portfolio Highlights Geographically widespread, resilient and stable portfolio Net Lettable Area 1.8 million square feet Unit Price Statistics FY2016 High RM1.70 Low RM1.48 Opening Price (4 Jan 2016) RM1.52 Closing Price (30 Dec 2016) RM1.56 Change In Price 2.6% Average Total Return* For 1 year (2016) 9.3% For 3 years ( ) 8.2% For 5 years ( ) 10.8% *Based on the Total Return and the Closing Price of each year. Number of Properties 5 malls across Peninsular Malaysia Market Valuation 1.09RM Billion Market Catchment¹ Total Return* For 3 years ( ) 24.0% For 5 years ( ) 51.6% *Based on the Total Return of each year and the Closing Price as at 30 December Visitor Traffic million residents Debt Structure As at 31 December 2016 Al-Murabahah/Overdraft Fixed Term Loan, Annual Floating Rate and Fixed Term Loan, Annual Fixed Rate Total Debt RM508 million Weighted Cost of Debt 4.6% Gearing Ratio¹ 44.9% Interest Cover 2.86 ¹ Gearing ratio calculated by total borrowings over Gross Asset Value (GAV) 30.1million NUMBER OF TENANCIES² 450 ¹ Source: Spectrum Research Asia Sdn Bhd, December 2012 (Independent Research) ² NLA Tenants only

6 HEKTAR REAL ESTATE INVESTMENT TRUST ANNUAL REPORT CORPORATE VISION and Strategy Corporate Vision Hektar Real Estate Investment Trust ( Hektar REIT ) aims to be recognized as a leading real estate owner and investor in terms of asset management, asset size and returns to unitholders. Corporate missions n To grow and manage Hektar REIT s portfolio optimally n To develop excellent employees n To conduct business ethically n To be customer-centric n To create value for the communities we operate in GOALS n n To pay attractive Distribution Per Unit ( DPU ) relative to the market To form a solid and defensible portfolio to create stable and sustainable value to its stakeholders Portfolio Optimisation Providing a portfolio with Sustainable Returns and Income Defensibility via: n Active Leasing: aligning the tenancy mix to the needs of the target shoppers n To provide optimum and sustainable income distribution to Hektar REIT s unitholders n n Advertising & Promotion: aggressive marketing to retain consumer interest and visitor traffic Value Creation Initiatives: improvements including asset enhancement and refurbishment designed to improve long-term yields Corporate Strategy Hektar REIT s corporate strategy forms the course and path to achieve its vision and missions. The REIT s strategy is to focus on retail assets in monopolistic environment, in growing towns across Malaysia and to bring Hektar s signature malls across Malaysia. Yield-Accretive Acquisitions Enhancing the Long-Term Value and Growth of Hektar REIT by acquisition of: n n Stable Properties: assets with sustainable cash flow, requiring selective optimisation Turnaround Properties: assets with solid fundamentals which are underserving their current market, requiring intensive value creation initiatives to turnaround the property, increasing yields in the long term Capital Management Optimising the capital structure to fund acquisitions and asset enhancements through a combination of debt and equity within a flexible framework providing a low cost of capital

7 Highlights Õ Management Discussions and Analysis Õ Sustainability and Corporate Governance Õ Financials Õ OTHERS Letter to Unitholders marked the 10 th anniversary of Hektar REIT as a public listed real estate investment trust on Bursa Malaysia. Hektar REIT has shown a decade of stability, providing unitholders with solid performance and undisrupted quarterly income distributions. MICHAEL LIM HEE KIANG Independent Non-Executive Chairman Dear Valued Unitholders 2016 has drawn to a close and I hereby present Hektar REIT s performance for the year. Financial Review 2016 marked the 10 th anniversary of Hektar REIT as a public listed real estate investment trust on Bursa Malaysia. Hektar REIT has shown a decade of stability, providing unitholders with solid performance and undisrupted quarterly income distributions. Hektar REIT has maintained its high distribution yield of approximately 7% since listing (10 years average distribution yield = 8%). However, as we cautioned in last year s annual report, 2016 has proven to be Hektar REIT s toughest year in its 10-year existence. A combination of a weak economy and increased competition have resulted in Hektar REIT s realised net profit decreasing from RM44.7 million in 2015 to RM41.5 million in 2016, a reduction of 7%. Realised earnings per unit decreased from sen to sen. However, net income increased from RM4.8 million to RM43.2 million, as there were fair value loss recorded in FY2015, arising from revaluation of investment properties. OPERATING ENVIRONMENT AND MARKET UPDATE Our flagship mall, Subang Parade, which has been our bedrock since Hektar REIT s listing on Bursa Malaysia in 2006, has taken the biggest hit from the soft retail sentiment and increased competition from existing and new malls. Its revenue dipped by 5% from RM52 to RM49 million. For Subang Parade, we had to make a difficult choice of either allowing for rental reductions for selected retailers or face the reality of increased vacancies. On the bright side, occupancy remains high at 93%, consistent with historical trend and affirming that Subang Parade s position as a premier neighbourhood mall has not changed. Retail space in Kuala Lumpur has doubled since last year from 7.6 square feet per capita to 16.7 square feet per capita, whilst retail space in Klang Valley has grown from 6.7 square feet per capita to 7.9 square feet per capita. This means that retailers now have better negotiating leverage. Coupled with a soft retail market where shoppers are more prudent in their spending, rental rate now is suppressed. Retail Group Malaysia had downgraded most of their quarterly forecast in 2015 and 2016, and has also indicated that 2017 will continue to be a challenging year as consumers contend with costlier goods and services amid a weaker ringgit. Based on feedback we received from industry players, retailers now prefer to enter either new or refurbished malls rather than older but more stable malls. In view of this, we have decided to undertake a RM40 million asset enhancement initiative ( AEI ) for Subang Parade, which will revitalise the mall, as well as increase its net lettable area by 5% (approximately 25,000 sq ft). The new wing will boast an array of new offerings, especially from the food and Hektar REIT has maintained its high distribution yield of approximately 7% since listing (10 years average distribution yield = 8%). Hektar REIT has shown a decade of stability, providing unitholders with solid performance and undisrupted quarterly income distributions.

8 HEKTAR REAL ESTATE INVESTMENT TRUST ANNUAL REPORT Letter To Unitholders Hektar REIT executed a sale and purchase agreement to acquire 1Segamat, located in Segamat, Johor for RM104 million on 10 June At this price, the property yield is 7%. Subang Parade s occupancy remains high at 93%, consistent with historical trend and affirming its position as a premier neighbourhood mall has not changed. Wetex Parade has achieved full occupancy in 2016 despite challenging retail conditions. beverages ( F&B ) segment. Scheduled to complete by mid-2018, we are confident that this will provide Subang Parade with the much-needed boost. We are pleased to report that in 2016, our malls in second-tier towns in Kedah and Johor have improved their respective revenues which served to mitigate the grey performance in Subang Parade. This validated our belief that malls in second-tier towns are more resilient and the extent of the impact from the global economy is less felt in these areas. Wetex Parade has achieved full occupancy in 2016 despite challenging retail conditions. Renewals and new tenants at the mall were secured for more than six months ahead of expiries. The mall has also continuously introduced new brands to its shoppers, which include Kenny Rogers Roasters, Jipangi, and Sushi World in The management is currently in the midst of exploring the recalibration of the retail and hotel area to maximise yield from the asset. Moving forward, we have commenced the AEI for our mall in Kulim at a cost of RM23 million. Targeted to complete in August 2017, the revamped Landmark Central will have an additional 20,000 sq ft of net lettable area plus refurbished flooring, painting and overall infrastructure improvement of the existing building. Landmark Central is the only purpose-built mall in Kulim and has been showing good reversion rates. The management hopes to bring the mall to new heights with the completion of its refurbishment. Acquisition Plans As for inorganic growth, we executed a sale and purchase agreement to acquire 1Segamat, located in Segamat, Johor for RM104 million, on 10 June At this price, the property yield is 7%. We expect 1Segamat to be our positive story for the year as the mall has a lot of room for improvement. In the short term, we are looking at replacing single-store local retailers with national and international chains which can provide better rentals. Even as we speak, a few reputable international retailers have voiced interest in doing business in 1Segamat. This class of retailers used to be hesitant in coming to secondtier towns. However, our success in bringing retailers like Sushi King and Baskin Robbins to Wetex Parade in Muar, which continue to thrive after many years, has convinced the aforementioned retailers of the viability of doing business in malls in second-tier towns. This bodes well for Hektar REIT as a whole, as our focus now is acquiring more malls in the said second-tier growing towns. In the longer term, we are looking at increasing the lettable footprint of 1Segamat, as well as improving its aesthetics to increase its appeal, revenue and simultaneously, its value. Undisrupted Distribution Hektar REIT maintains a policy of paying out at least 90% of our distributable net income in four quarterly distribution payments throughout the year. We should clarify that distributable net income is net income excluding non-cash items, such as fair value adjustments and items under MFRS 117, an accounting standard implemented in FY2010 (see notes to the accounts for more details). For FY2016,

9 Highlights Õ Management Discussions and Analysis Õ Sustainability and Corporate Governance Õ Financials Õ OTHERS 7 net income is higher than the net distributable income. Despite challenges in 2016, our Board has decided to continue distributing 10.5 sen per unit to you, our treasured unitholders, as a reward for your continued belief in us. We now ask for your patience and support in the coming year, as we expect it to be even more challenging than 2016, and the quantum of our future quarterly distribution payout may be affected. Turbulence AHEAD We trust you appreciate that investment in a REIT is a long term game, and to date, the REIT has been providing undisrupted stable distributions for a decade now. However, from now henceforth, we expect some turbulence coming our way as the global political and economic scene has become precarious; we are unsure as to how the macroeconomic changes will affect investor sentiment and the resultant impact on retail sector. We are also keeping a close eye on the mushrooming of retail space, especially in Klang Valley and how this will affect us in the long term. However, rest assured that we are continuously monitoring the changes in the internal and external economic environment and will review and make adjustments which are necessary for us to adapt, survive and continue prospering. Hektar REIT maintains a policy of paying out at least 90% of our distributable net income in four quarterly distribution payments throughout the year. Acknowledgements It is a great honour for me to pick up the baton from Dato Jaafar bin Abdul Hamid, our former Chairman and founder who passed on in January Having taken the role of Chief Executive Officer since listing of Hektar REIT until April 2016, he leaves us with a great legacy and a strong team, who will strive to continue the vision and missions that he had set for the company since the incorporation of Hektar Group. His presence and wise counsel will be deeply missed. On behalf of the Board of Directors, I wish to also thank our management team and staff for their commitment and dedication to their work. Our sincere appreciation is also extended to our retailers, vendors and business partners. Your contributions and support shall ensure that Hektar REIT remains a defensible, safe and preferred investment for our investors. MICHAEL LIM HEE KIANG Independent Non-Executive Chairman Notwithstanding the above, we expect the economy to recover in 2018 and we remain committed to extract the best values from all our assets in our portfolio.

10 HEKTAR REAL ESTATE INVESTMENT TRUST ANNUAL REPORT Perutusan Pengerusi kepada Pemegang-pemegang Unit 2016 menandakan ulang tahun yang ke 10 Hektar REIT tersenarai di Bursa Malaysia sebagai sebuah tabung amanah pelaburan hartanah. Pemegang-pemegang Unit yang Dihargai 2016 telah sampai ke penghujung dan dengan ini saya ingin mengulas prestasi Hektar REIT bagi tahun ini. Ulasan Kewangan 2016 menandakan ulang tahun yang ke 10 Hektar REIT tersenarai di Bursa Malaysia sebagai sebuah tabung amanah pelaburan hartanah. Hektar REIT telah membuktikan kestabilan selama satu dekad dengan prestasi yang kukuh dan pengagihan pendapatan tanpa gangguan pada setiap suku tahun. Hektar REIT telah mengekalkan kadar pengagihannya yang tinggi sebanyak lebih kurang 7% sejak penyenaraiannya (penggagihan pendapatan purata sepanjang 10 tahun = 8%). Walaubagaimanapun, seperti yang telah kami ingatkan dalam laporan tahunan yang lepas, 2016 terbukti menjadi tahun yang paling sukar untuk Hektar REIT dalam tempoh 10 tahun kewujudannya. Ditambah lagi dengan keadaan ekonomi yang lemah dan persaingan yang meningkat telah mengakibatkan keuntungan nyata Hektar REIT berkurangan daripada RM44.7 juta pada tahun 2015 kepada RM41.5 juta pada tahun 2016, pengurangan sebanyak 7%. Pendapatan nyata bagi setiap unit berkurangan daripada sen kepada sen. Walaubagaimanapun, pendapatan bersih meningkat daripada RM4.8 juta kepada RM43.2 juta disebabkan kerugian nilai saksama ekoran daripada penilaian semula hartanah pada tahun Persekitaran Operasi dan Pasaran Terkini Pusat membeli-belah kami yang utama iaitu Subang Parade, yang merupakan tunjang kami sejak penyenaraian Hektar REIT di Bursa Malaysia pada tahun 2006, telah terkena tempias yang paling teruk hasil daripada sentimen peruncitan yang perlahan dan peningkatan persaingan daripada pusat-pusat membeli-belah yang sedia ada dan yang baru. Perolehannya merosot sebanyak 5% daripada RM52 juta kepada RM49 juta. Di Subang Parade, kami terpaksa membuat pilihan yang rumit samaada membenarkan pengurangan sewa bagi peruncit-peruncit terpilih atau menghadapi kenyataan peningkatan kekosongan. Disebaliknya, kadar penyewaan kekal tinggi pada 93%, selaras dengan prestasi selama ini dan mengesahkan bahawa kedudukan Subang Parade sebagai pusat membeli-belah kejiranan perdana tidak berubah. Ruang runcit di Kuala Lumpur telah meningkat dua kali ganda sejak tahun lepas daripada 7.6 kaki persegi setiap kapita kepada 16.7 kaki persegi setiap kapita, manakala ruang runcit di Lembah Klang telah meningkat daripada 6.7 kaki persegi setiap kapita kepada 7.9 kaki persegi setiap kapita. Ini bermakna sekarang ini peruncit-peruncit mempunyai lebih kuasa perundingan berbanding dengan pemilik. Tambah pulak dengan pasaran runcit yang perlahan, di mana pembeli-pembeli lebih berhemah dalam perbelanjaan mereka, telah menyebabkan kadar sewa kini menjadi lebih tertekan. Retail Group Malaysia telah menurunkan kebanyakan daripada ramalan suku tahunannya pada 2015 dan 2016, dan telah juga menyatakan bahawa 2017 akan terus menjadi tahun yang mencabar apabila penggunapengguna berhadapan dengan barangan dan perkhidmatan yang lebih mahal ditambah dengan nilai ringgit yang lemah. Berdasarkan maklum balas yang kami terima daripada pengusahapengusaha industri, peruncit-peruncit sekarang lebih suka untuk memasuki pusat-pusat membeli-belah yang baru atau yang telah di ubahsuai daripada yang lebih lama tetapi lebih stabil. Berlandaskan hakikat ini, kami telah memutuskan untuk mengambil inisiatif peningkatan aset ( AEI ) untuk Subang Parade, dengan kos sebanyak RM40 juta. Inisiatif ini akan memberi nafas baru kepada Subang Parade serta penambahan kawasan boleh disewa bersih sebanyak 5% (lebih kurang 25,000 kaki persegi). Kawasan baru ini akan menempatkan pelbagai tawaran-tawaran baru terutama sekali dari segmen makanan dan minuman ( F&B ). Dijadualkan siap menjelang pertengahan tahun 2018, kami yakin bahawa ini akan memberikan suntikan yang amat diperlukan kepada Subang Parade untuk memastikan pemulihan yang lancar. Kami dengan sukacitanya ingin melaporkan bahawa pada tahun 2016, pusat-pusat membeli-belah kami di bandar-bandar tier kedua di Kedah dan Johor telah berjaya menambah baik perolehan masing-masing yang dapat membantu mengurangkan beban penurunan prestasi Subang Parade. Ini mengesahkan pendapat kami bahawa pusat-pusat membeli-belah di bandar-bandar tier kedua adalah lebih berdaya tahan dan tahap kesan daripada ekonomi global adalah kurang. Wetex Parade telah mencapai tahap penyewaan penuh pada tahun 2016 disebalik keadaan peruncitan yang mencabar. Pembaharuan sewaan dan penyewa-penyewa baru telah diperolehi enam bulan lebih awal sebelum tamat tempoh. Pusat membeli-belah

11 Highlights Õ Management Discussions and Analysis Õ Sustainability and Corporate Governance Õ Financials Õ OTHERS 9 ini juga sentiasa memperkenalkan jenama-jenama baru kepada pengunjung-pengunjungnya, termasuklah Kenny Rogers Roasters, Jipangi, dan Sushi World pada tahun Pihak pengurusan kini sedang merancang untuk penentukuran semula kawasan runcit dan hotel untuk memaksimumkan pendapatan daripada asset. Bergerak ke hadapan, kami telah memulakan AEI bagi pusat membelibelah kami di Kulim dengan kos sebanyak RM23 juta. Dijangka siap pada bulan Ogos 2017, Landmark Central yang diperbaharui akan mempunyai penambahan kawasan boleh disewa bersih sebanyak 20,000 kaki persegi beserta lantai baru, warna cat baru dan penambahbaikan infrastruktur keseluruhan bangunan. Landmark Central merupakan satu-satunya pusat membeli-belah khas di Kulim dan telah menunjukkan kadar peningkatan sewaan yang baik. Pihak pengurusan berhasrat untuk membawa Landmark Central ke tahap yang lebih tinggi selepas siapnya AEI nanti. Rancangan-rancangan Pengambilalihan Bagi pertumbuhan luaran, kami telah menandatangani satu perjanjian jual beli pada 10 Jun 2016 untuk mengambilalih pusat membeli-belah 1Segamat, yang terletak di Segamat, Johor dengan harga RM104 juta. Pada harga ini, kadar hasil pulangan adalah 7%. Kami menjangkakan 1Segamat akan menjadi berita positif bagi tahun ini memandangkan pusat membeli-belah ini mempunyai banyak ruang untuk penambahbaikan. Dalam jangkamasa pendek, kami berhasrat menggantikan peruncit-peruncit tempatan yang mempunyai satu kedai dengan rangkaian peruncit-peruncit nasional dan antarabangsa yang dapat membayar kadar sewaan yang lebih tinggi. Dalam masa kini pun, beberapa peruncit antarabangsa yang terkenal telah menyuarakan minat mereka untuk menjalankan perniagaan di 1Segamat. Sebelum ini, peruncit-peruncit kelas ini sering keberatan untuk pergi ke bandar-bandar tier kedua. Walaubagaimanapun, kejayaan kami dalam membawa peruncitperuncit seperti Sushi King dan Baskin Robbins ke Wetex Parade di Muar, yang terus berjaya setelah beberapa tahun, telah meyakinkan peruncit-peruncit tersebut akan daya maju menjalankan perniagaan di pusat-pusat membeli-belah di bandar-bandar tier kedua. Ini merupakan petanda yang baik bagi Hektar REIT secara keseluruhan, memandangkan tumpuan kami sekarang adalah untuk mengambilalih lebih banyak pusat-pusat membeli-belah di bandarbandar tier kedua yang semakin maju. Dalam jangka masa yang lebih panjang, kami juga merancang untuk menambah kawasan boleh disewa, serta menambah baik nilai estetikanya untuk meningkatkan perolehan dan pada masa yang sama, nilainya. Pengagihan Tanpa Gangguan Hektar REIT mengekalkan polisinya membuat pengagihan pendapatan sekurang-kurangnya 90% daripada pendapatan bersih boleh diagih setiap suku tahun sebanyak empat kali sepanjang tahun. Kami ingin menjelaskan bahawa pendapatan bersih boleh diagih adalah pendapatan bersih tidak termasuk perkara-perkara bukan tunai, seperti pelarasan nilai saksama dan perkara-perkara di bawah MFRS 117, piawaian perakaunan yang dilaksanakan pada tahun 2010 (sila rujuk kepada nota-nota akaun bagi maklumat lebih lanjut). Akibatnya, pendapatan bersih FY2016 adalah lebih tinggi daripada pendapatan bersih boleh agih pada tahun itu. Di sebalik cabaran-cabaran yang kami hadapi pada tahun 2016, pihak Lembaga Pengarah telah memutuskan untuk terus mengagih 10.5 sen setiap satu unit kepada pemegang-pemegang unit kami yang amat dihargai, sebagai ganjaran bagi kepercayaan anda yang berterusan kepada kami. Kami ingin memohon kesabaran dan sokongan pada tahun 2017, di mana kami menjangkakan ianya akan menjadi lebih mencabar daripada tahun 2016, yang mungkin akan menjejas kuantum pengagihan suku tahunan pada masa hadapan. Pergolakan Mendatang Kami percaya anda menghargai bahawa pelaburan di dalam Tabung Amanah Pelaburan Hartanah adalah untuk jangkamasa yang panjang, dan setakat ini, Hektar REIT telah membuat pengagihan yang stabil tanpa gangguan selama satu dekad. Walaubagaimanapun, mulai dari sekarang dan seterusnya, kami menjangkakan beberapa pergolakan yang akan dihadapi, disebabkan senario politik dan ekonomi global yang tidak menentu yang akan mempengaruhi sentimen pelabur dan kesan terhadap ekonomi. Kami juga tidak pasti bagaimana pertumbuhan ruang runcit, terutama sekali di Lembah Klang akan menjejaskan perniagaan kami pada jangkamasa yang panjang. Walau bagaimanapun, anda harus yakin yang kami akan sentiasa meneliti perubahan-perubahan dalam persekitaran ekonomi dalaman dan luaran dan akan pertimbang perubahan kepada model perniagaan kami yang perlu untuk kami menyesuaikan diri, berjaya dan terus makmur. Walaubagaimanpun, kami menjangkakan ekonomi akan pulih pada tahun 2018 dan kami tetap komited untuk mendapatkan nilai yang terbaik daripada kesemua aset-aset di dalam portfolio kami. PENGHARGAAN Ini adalah satu penghormatan yang amat besar bagi saya untuk mengambil alih sebagai Pengerusi daripada Allahyarham Dato Jaafar bin Abdul Hamid, bekas Pengerusi dan Pengasas Hektar yang telah meninggal dunia pada bulan Januari Beliau telah menjadi Ketua Pegawai Eksekutif sejak penyenaraian Hektar REIT sehinggalah bulan April 2016, dan beliau meninggalkan legasi yang cukup hebat dan pasukan yang kukuh yang akan terus merealisasikan wawasan dan misi yang beliau telah tetapkan bagi syarikat sejak penubuhan Kumpulan Hektar. Kehadiran beliau dan nasihat-nasihat yang bijaksana akan terasa kehilangannya. Bagi pihak Lembaga Pengarah, saya juga ingin mengucapkan terima kasih kepada semua kakitangan kami di atas komitmen dan dedikasi mereka terhadap kerja-kerja mereka. Penghargaan kami juga diberikan kepada peruncit-peruncit, vendor-vendor dan rakan-rakaniaga kami. Sumbangan dan sokongan anda memastikan Hektar REIT kekal sebagai pelaburan yang boleh dipertahankan, selamat serta menjadi pilihan bagi pelabur-pelabur kami. MICHAEL LIM HEE KIANG Pengerusi Bebas Bukan Eksekutif

12 HEKTAR REAL ESTATE INVESTMENT TRUST ANNUAL REPORT 致单位持有者函年度报告 2016 年是贺达产托在马来西亚证券交易所公开上市为房地产投资信托基金的第 1 0 周年 尊贵的单位持有人, 2016 年已经落幕, 本人欣然报告贺达房地产投资信托基金 ( 简称 贺达产托 ) 这一年来的表现 财务表现检讨 2016 年是贺达产托在马来西亚证券交易所公开上市为房地产投资信托基金的第 10 周年 贺达产托这十年来表现十分平稳, 为单位持有人交出稳固可靠的业绩表现, 并且无间断地分派每季收益分配 自上市以来, 贺达产托保持约 7% 的高配息率 (10 年平均配息率为 8%) 然而, 正如在前一年常年报告中所提及,2016 年确实是贺达产托十年来最艰辛的一年 经济疲软适逢竞争加剧, 导致贺达产托已实现净盈利减少 7%, 从 2015 年的 4470 万令吉, 退减至 2016 年的 4150 万令吉 每单位已实现收益从 仙降至 仙 然而, 公允价值变更, 导致净收益从 480 万令吉增至 4320 万令吉 营运环境与市场最新资讯 自从于 2006 年在马来西亚证券交易所上市以来一直是贺达产托旗舰广场的首邦百利广场, 在面对零售消费情绪疲弱, 以及现有与新加入商场激烈竞争下, 受到最严峻的冲击 其收入挫跌 5%, 从 5,200 万令吉降至 4,900 万令吉 就首邦百利广场的情况而言, 我们面对两难间的抉择 : 调低特定零售租户的租金或者面对空置率增加 从积极角度来说, 租用率高达 93%, 保持以往的趋势, 而且首邦百利广场作为社区商场的牢固地位毫无动摇 吉隆坡的零售商场面积去年倍增, 从人均面积 7.6 平方尺激增至人均面积 16.7 平方尺, 而巴生河流域的零售商场从人均面积 6.7 平方尺增至人均面积 7.9 平方尺 这意味着零售商和业主 谈判租金时有更强的筹码 再加上购物者更谨慎地消费, 导致零售市况低迷, 如今的租金水平深受抑制 马来西亚零售集团于 2015 年与 2016 年调低大部分的季度预测数据, 并表示 2017 年将继续面对严峻挑战, 因为令吉汇价疲弱, 商品与服务价格上升让消费人备感吃力 根据我们从业者所得到的意见, 零售商更喜欢进驻崭新或已翻新的商场, 而不是较为悠久但相对稳定的商场 有鉴于此, 我们已决定对首邦百利广场推行耗资 4000 万令吉的资产增值举措行动 ( 简称 AEI ), 这将会为此商场换上新装, 并增加 5% 的净可出租面积 ( 约 2 万 5000 平方尺 ) 新的楼翼将会提供一系列新商店, 尤其是饮食部 此资产增值工程预计将于 2018 年中完成, 我们有信心, 此举将有助首邦百利广场脱胎换骨, 注入殷切需要的新气息 欣然的, 我们在吉打州与柔佛州发展中城镇的各商场, 于 2016 年成功改善收入, 并协助抵销首邦百利广场逊色表现所带来的冲击 这印证了我们的信念, 那就是发展中城镇商场表现更为坚韧, 在面对全球经济冲击时, 受影响程度较轻微 尽管面对艰难的零售环境, 威德百利广场于 2016 年达到百分之百的租用率 广场在还有超过 6 个月期满前, 即已取得续租与新租户的租约 此广场也不断向购物者推介新的品牌, 其中包括于 2016 年引入的 Kenny Rogers Roasters,Jipangi 与 Sushi World 管理层目前正探讨如何重新调整零售商场区与酒店区, 以从这项资产获得最可观的收益 放眼未来, 我们已在居林的广场开始了耗资 2300 万令吉的资产增值举措行动 预计于 2017 年 8 月完成, 翻新后的新世纪广场将可增加 2 万平方尺净出租面积, 而且现有建筑物也将整修地板 粉刷油漆与改善整体基本设施 新世纪广场是居林城镇唯一专门建设的购物中心, 至今获得良好的租金调升率 管理层期盼藉着完成翻新工程, 让此广场再攀新高峰

13 Highlights Õ Management Discussions and Analysis Õ Sustainability and Corporate Governance Õ Financials Õ OTHERS 11 收购计划 在扩张收购计划下, 我们于 2016 年 6 月 10 日以 1 亿 400 万令吉收购位于柔佛州昔加末 1Segamat 商场 按此收购价, 此产业的收益是 7% 我们确信 1Segamat 有许多改进的空间, 并期望此商场今年为我们捎来佳音 短期而言, 我们正探讨将只有单一商店的本地零售商更换为全国或国际连锁零售商, 以取得更理想的租金 即使我们只是放话, 已有数家声誉卓著的国际零售商已表明有意进驻 1Segamat 这类等级的零售商一向来不太愿意进入二线市镇 然而, 我们成功地将 Sushi King 与 Baskin Robbins 等零售商带入麻坡的威德百利广场, 而且持续经营了多年, 有助说服了前述的零售商在二线市镇商场营商是可行的 这对贺达产托整体而言是个有利趋势, 因为我们目前的焦点是在上述欣欣向荣的二线市镇收购更多商场 长期而言, 我们有意增加 1Segamat 的可出租面积, 并改善此商场的外观, 以增加收入, 同时提升其价值 配息不曾间断 贺达产托坚持在全年以四个季度派息支付至少 90% 的可分配净收益的政策 我们必须澄清可分配净收益是指不包括非现金项目, 例如公允价值调整以及属于财务报告标准 117 的项目, 财务报告标准 117 是于 2010 财政年度采纳的会计标准 ( 详情请见账目注释 ) 有鉴于此,2016 财政年度的净收益高于可分配净收益 虽然我们在 2016 年面对艰巨挑战, 然而董事部已决定继续分配每单位 10.5 仙给身为尊贵单位持有人的您, 作为您持续信任我们的回报 我们恳请您来年继续支持我们, 因为我们预期未来的道路比 2016 年更具挑战, 可能会影响我们未来每季配息支出的分配量 前路崎岖 我们相信您会欣赏房地产投资信托基金 (REIT) 是作为长期投资的产品, 迄今为止, 此 REIT 已连续十年不曾间断地提供稳定配息 然而, 从现在开始, 我们预期前路会有些崎岖, 全球政治与经济环境更添变数 我们不确定世界经济会带来什么样的影响与如何影响投资者的情绪 我们也不确定如雨后春笋般冒起的零售商场 ( 尤其在巴生河流域 ) 长期而言将对我们产生什么样的影响 然而, 您大可放心, 我们会密切留意内在与外围的经济环境, 并在必要时考虑改变现有的商业模式, 以适应 生存并持续昌盛 尽管如上所述的挑战, 我们预期经济将于 2018 年里复苏, 而我们承诺会从资产组合中粹取最理想的投资价值与回报 鸣谢 前主席兼创办人 Dato Jaafar bin Abdul Hamid 不辛于 2017 年 1 月离世 他自贺达产托上市就担任首席执行员的职份直至 2016 年 4 月, 为我们留下美好记忆, 工作方针与强大的专业团队, 我们将继续努力完成他为贺达集团自创立以来就制定的愿景与使命 他在任期间所做的一切以及他的明智忠告, 我们将牢记于心 本人代表董事会感谢团队对工作尽责和献身的精神 我们也感谢零售商 供应商和业务伙伴 大家的贡献和支持确保贺达产托得以继续成为投资者一项具防御性和安全的投资首选 主席 MICHAEL LIM HEE KIANG

14 HEKTAR REAL ESTATE INVESTMENT TRUST ANNUAL REPORT CREATING FAVOURITE MEETING PLACES

15 Highlights Õ Management Discussions and Analysis Õ Sustainability and Corporate Governance Õ Financials Õ OTHERS 13

16 HEKTAR REAL ESTATE INVESTMENT TRUST ANNUAL REPORT Portfolio Performance PROPERTY PROFILES Hektar REIT s portfolio consists of five well-established shopping centres in various states on the West Coast of Peninsular Malaysia. Subang Parade, located in Subang Jaya, Selangor Mahkota Parade, located in Bandar Melaka, Melaka Wetex Parade located in Muar, Johor Central Square Shopping Centre, located in Sungai Petani, Kedah Landmark Central Shopping Centre, located in Kulim, Kedah Net Lettable Area 1.8sq ft million Occupancy 96.2 percentage Market Catchment¹ 3.0 million residents Data current as at 31 December Spectrum Research Asia Sdn. Bhd., December 2012 (Independent Research), within 20-minutes drive. 2 NLA Tenants only. Visitor Traffic 30.1 million per annum Number of Tenancies² 450 The portfolio provides a good geographical diversification to the REIT. The REIT is in the midst of acquiring another mall in Segamat, Johor. The acquisition is expected to complete in second half of 2017, where upon completion, the enlarged portfolio will be made up of six malls across Peninsular Malaysia, with approximately 2.0 million square feet of retail space. The Manager aims to enhance the long-term value of the portfolio via key operating, investment and capital management strategies. The performance achieved by each centre in the financial year 2016 is set out in the following pages.

17 Highlights Õ Management Discussions and Analysis Õ Sustainability and Corporate Governance Õ Financials Õ OTHERS 15 Subang Mahkota Wetex Central Landmark parade Parade Parade Square Central State Selangor Melaka Johor Kedah Kedah Title Freehold Leasehold* Freehold Freehold Freehold Primary Trade Area¹ 1,834, , , , ,195 NLA Retail (sq ft) 507, , , , ,388 Tenancies Occupancy (%)² Visitor Traffic FY2016 (million) Purchase Price (RM million) Valuation (RM million)² Gross Revenue FY2016 (RM million) Net Property Income (NPI) FY2016 (RM million) ¹ Spectrum Research Asia Sdn. Bhd., December 2012 (Independent Research) ² As at 31 December 2016 * Until year 2101 GEOGRAPHICALLY WIDESPREAD PORTFOLIO 39% 30% 39% 32% 42% 30% 10% 12% 9% 12% 9% 11% 9% 8% 8% n Subang Parade n Mahkota Parade n Wetex Parade n Central Square n Landmark Central Portfolio by Valuation Portfolio by Gross Revenue Portfolio by NPI PORTFOLIO OCCUPANCY Hektar s portfolio of assets have achieved an aggregate occupancy rate of 96.2% as at 31 December Despite tough retail environment, Wetex Parade has achieved full occupancy. Property (Occupancy as at 31 December) Subang Parade 93.0% 94.7% 99.3% 100.0% 99.8% Mahkota Parade 96.4% 95.5% 94.5% 97.8% 96.1% Wetex Parade 100.0% 98.7% 98.3% 96.8% 97.8% Central Square 96.6% 98.0% 80.5% 82.5% 89.8% Landmark Central 98.9% 99.3% 97.8% 93.7% 96.9% Overall* 96.2% 96.6% 94.3% 95.0% 96.3% * The weighted average occupancy rate is calculated based on NLA.

18 HEKTAR REAL ESTATE INVESTMENT TRUST ANNUAL REPORT Portfolio Performance VISITOR TRAFFIC Visitor traffic is measured by FootFall, a computerised video-based traffic monitoring system. Visits to Mahkota Parade has increased slightly by 3.3% but Subang Parade and Landmark Central have decreased slightly. Both of the latter malls will be undergoing major asset enhancement initiatives in Shopper traffic at Wetex Parade and Central Square remained stable at 4.6 million and 3.9 million respectively. Property (Number of Visits) Subang Parade (million) Change in Traffic (%) (6.1) (2.5) Mahkota Parade (million) Change in Traffic (%) 3.3 (9.0) (3.8) (5.5) 34.1 Wetex Parade (million) Change in Traffic (%) (4.2) (7.7) (11.9) Central Square (million)* Change in Traffic (%) 18.2 (19.5) Landmark Central (million)* Change in Traffic (%) (6.3) (5.9) Total (million) * FootFall system for Central Square and Landmark Central was installed only in late November FootFall for these two malls are reported from January 2013 onwards. PORTFOLIO TENANCY MIX The portfolio tenancy mix is dominated by department stores and supermarkets, which are led by Parkson, The Store and Giant constitute 36.5% of total portfolio NLA. In terms of rental income, the largest segment remains fashion and footwear, which contributes 22.0% of monthly rental income. Food and beverage comes closely behind, constituting 21.6% of the portfolio monthly income. n Fashion & Footwear n Food & Beverage/Food Court n Department Store/Supermarket 22.0% 21.6% 17.3% 36.5% n Gifts/Books/Toys/Specialty n Education/Services n Leisure & Entertainment/ Sports & Fitness 9.6% n Electronics & IT n Homewares & Furnishing n Others 7.3% 8.6% 17.5% 13.2% 10.8% 5.0% 1.1% 7.5% 6.6% 5.6% Portfolio by Rental Income 3.2% 1.9% 4.8% * Based on monthly rental income for December 2016 Portfolio by NLA

19 Highlights Õ Management Discussions and Analysis Õ Sustainability and Corporate Governance Õ Financials Õ OTHERS 17 PORTFOLIO S TOP TEN TENANTS The top ten tenants in the portfolio contributed 28.6% of total monthly rental income, providing a diversified revenue base. After the top tenant, Parkson, which contributed 9.7% monthly rental income, no other tenant contributed more than 6.0%. % of % of Monthly Tenant Trade Sector NLA (sq ft) Total NLA Rental Income* Parkson Department Store/Supermarket 254, % 9.7% The Store Department Store/Supermarket 273, % 5.9% Seleria Food & Beverage 35, % 2.5% Giant Department Store/Supermarket 96, % 1.7% MBO Cinemas Leisure & Entertainment/Sports & Fitness 83, % 1.7% Bata Fashion & Footwear 7, % 1.6% McDonald s Food & Beverage 14, % 1.5% KFC Food & Beverage 17, % 1.5% Kenny Rogers Roasters Food & Beverage 7, % 1.3% Watsons Services 7, % 1.2% Top 10 Tenants (By Monthly Rental Income) 796, % 28.6% Other Tenants 981, % 71.4% Total 1,778, % 100.0% * Based on monthly rental for December 2016 PORTFOLIO RENTAL REVERSIONS For the year ended 31 December 2016, the portfolio recorded 140 new and renewed tenancies, with an overall weighted average rental reversion of -9%. The negative reversion is generally caused by the tough retail and macro-economic environment. Landmark Central maintains healthy reversion due to its monopolistic position in the market. % Increase/ No. of New % of (Decrease) Full Year (12 months) Tenancies/ NLA Total Over Previous (Ended 31 December) Renewals (sq ft) NLA Rent Rates Subang Parade 40 80,755 16% (4%) Mahkota Parade ,788 26% (18%) Wetex Parade 21 18,030 11% (6%) Central Square 18 60,130 19% (5%) Landmark Central 18 50,302 18% 7% Total/Average* ,005 19% (9%) * The weighted average is calculated based on NLA. Figures as at 31 December 2016

20 HEKTAR REAL ESTATE INVESTMENT TRUST ANNUAL REPORT Portfolio Performance PORTFOLIO TENANCY EXPIRY PROFILE For the year 2017, a total of 207 tenancies will expire, representing approximately 59% of NLA and 56% of monthly rental income as at 31 December The expiries are slightly more concentrated in 2017 due to the expiry of several anchor tenants. However, the tenancies are secured with options-to-renew and are confirmed six months prior to their expiries. nla of nla of Tenancies % of Total no. of Tenancies Expiring Monthly Portfolio Tenancies Expiring as % of Rental For Year Ending 31 December expiring (sq ft) Total NLA Income* FY ,046,347 59% 56% FY ,026 26% 27% FY ,174 11% 16% * Based on monthly rental income for December % 59% 56% 50% 40% 30% 20% 10% 0% 26% 27% 16% 11% FY 2017 FY 2018 FY 2019 n By Total NLA n By Monthly Rental Income

21 Highlights Õ Management Discussions and Analysis Õ Sustainability and Corporate Governance Õ Financials Õ OTHERS 19 PORTFOLIO TENANCY PROVISIONS As at 31 December 2016, turnover rent provisions were present in approximately 93% of the tenancies in the portfolio. Step-up rent provisions were present in approximately 41% of tenancies within the portfolio. A turnover rent provision allows for rent calculated as a proportion of annual turnover of the tenant s business. Turnover rent is paid to the REIT if it exceeds the base rent specified in tenancy agreements on an annual basis. A step-up rent provision as specified in tenancy agreements is a pre-determined increase in rent at defined intervals during a tenancy agreement, typically each year and forms the base rent of any tenancy agreement. Hektar REIT Tenancy Provisions Turnover Rent Hektar REIT Tenancy Provisions Step-up Rent Portfolio Average 93% Portfolio Average 41% Subang Parade 95% Subang Parade 14% Mahkota Parade 99% Mahkota Parade 59% Wetex Parade 97% Wetex Parade 54% Central Square 70% Central Square 60% Landmark Central 99% Landmark Central 24% 0% 50% 100% 0% 50% 100%

22 HEKTAR REAL ESTATE INVESTMENT TRUST ANNUAL REPORT Portfolio Performance Subang Parade was the first regional shopping centre in Selangor when it was opened in The centre is located in the heart of Subang Jaya s commercial district, a township which is 25 minutes drive from Kuala Lumpur. Location Title Primary Trade Area Gross Floor Area Net Lettable Area No. 5, Jalan SS 16/1, Subang Jaya Petaling Jaya, Selangor Freehold 1,834,000 within 20-mins drive time 1,169,038 sq ft 507,150 sq ft Subang Parade s positioning strategy is neighbourhoodfocused, with an emphasis on its primary trade area. This market focus provides the centre with a captive customer base, whose needs are met by a tenant mix offering value and convenience. In 2011, the introduction of a cinema has further enhanced the tenant mix of the centre, bringing us closer to our purpose in meeting customers needs. Subang Parade will undergo an asset enhancement initiative ("AEI") this year with creation of new net lettable area of 20,000 sq ft. The AEI is expected to complete in Car Park 1,288 Valuation Tenants* 122 Key Tenants Occupancy 93.0% Visitor Traffic Year Opened 1988 Year Acquired 2006 RM427.2 million Parkson, Celebrity Fitness, MBO Cinemas, Best Denki, Digital One, TGIF 9.2 million per annum Data as of 31 December * Only NLA Lots. Subang Parade s Tenancy Mix 14.2% 17.7% 27.4% 16.4% 10.2% 19.8% 29.8% 7.4% 8.7% 9.4% 9.9% 1.7% 6.1% 3.3% 4.3% 0.4% 0.1% 13.1% n Fashion & Footwear n Food & Beverage/ Food Court n Department Store/ Supermarket n Gifts/Books/Toys/ Specialty n Education/Services n Leisure & Entertainment/ Sports & Fitness n Electronics & IT n Homewares & Furnishing n Others By Rental Income* By NLA SUBANG PARADE S EXPIRY PROFILE nla of nla of Tenancies % of Total no. of Tenancies Expiring Monthly For Year Ending Tenancies Expiring as % of Rental 31 December expiring (sq ft) Total NLA Income * FY ,812 41% 54% FY ,671 38% 29% FY ,136 12% 17% * Based on monthly rental income for December 2016.

23 Highlights Õ Management Discussions and Analysis Õ Sustainability and Corporate Governance Õ Financials Õ OTHERS 21 SUBANG PARADE S TOP TEN TENANTS % of % of Monthly Tenant Trade Sector nla (sq ft) Total NLA Rental Income* Parkson Department Store/Supermarket 140, % 14.2% Digital One Electronics & IT 21, % 2.9% Celebrity Fitness Leisure & Entertainment/Sports & Fitness 21, % 2.8% Bata Fashion & Footwear 4, % 2.6% Best Denki Electronics & IT 24, % 2.4% TGI Friday s Food & Beverage 5, % 2.0% Kenny Rogers Roasters Food & Beverage 3, % 2.0% MBO Cinemas Leisure & Entertainment/Sports & Fitness 25, % 1.9% The Reject Shop Fashion & Footwear 9, % 1.8% MPH Bookstores Gifts/Books/Toys/Specialty 14, % 1.8% Top 10 Tenants (by monthly rental income) 271, % 34.4% Other Tenants 235, % 65.6% Total 507, % 100.0% * Based on monthly rental income for December 2016.

24 HEKTAR REAL ESTATE INVESTMENT TRUST ANNUAL REPORT Portfolio Performance Location No. 1, Jalan Merdeka Bandar Melaka, Melaka Title Leasehold (until 2101) Mahkota Parade was the first regional shopping centre located in the commercial and tourist centre situated in the heart of Melaka town. Mahkota Parade is positioned as the leading shopping centre in the Melaka region. The centre also serves as a key destination for major community events and exhibitions. Mahkota Parade was re-launched on May 1, 2010, following a complete refurbishment. The revitalised shopping centre improved the overall shopping experience for customers. A further expansion at the cinema was completed in 2015, where the number of screens was increased from four to ten. These are part of Hektar s continuing efforts to invest in the Melaka market and maintain Mahkota Parade as the leading shopping centre in the state. Primary Trade Area 382,200 within 20-mins drive time Gross Floor Area 1,392,623 sq ft Net Lettable Area 519,542 sq ft Car Park 1,079 Valuation RM322.4 million Tenants* 106 Key Tenants Parkson, Seleria, Giant, MIXX, LFS Occupancy 96.4% Visitor Traffic 9.4 million per annum Year Opened 1994 Year Acquired 2006 Data as of 31 December * Only NLA Lots. MAHKOTA Parade s Tenancy Mix 11.4% 27.3% 22.2% 27.5% 15.0% 20.7% 13.6% 14.6% 7.4% 6.9% 5.6% 9.4% 4.7% 6.2% 5.0% 2.3% 0.2% 0.1% n Fashion & Footwear n Food & Beverage/ Food Court n Department Store/ Supermarket n Gifts/Books/Toys/ Specialty n Education/Services n Leisure & Entertainment/ Sports & Fitness n Electronics & IT n Homewares & Furnishing n Others By Rental Income* By NLA MAHKOTA PARADE S EXPIRY PROFILE nla of nla of Tenancies % of Total no. of Tenancies Expiring Monthly For Year Ending Tenancies Expiring as % of Rental 31 December expiring (sq ft) Total NLA Income* FY ,045 59% 60% FY ,680 23% 21% FY ,061 14% 19% * Based on monthly rental income for December 2016.

25 Highlights Õ Management Discussions and Analysis Õ Sustainability and Corporate Governance Õ Financials Õ OTHERS 23 MAHKOTA PARADE S TOP TEN TENANTS nla % of % of Monthly Tenant Trade Sector (sq ft) Total NLA Rental Income* Parkson Department Store/Supermarket 113, % 12.3% Seleria Food & Beverage 35, % 7.8% Ampang Superbowl Leisure & Entertainment/Sports & Fitness 36, % 2.7% LFS Cinemas Leisure & Entertainment/Sports & Fitness 43, % 2.6% McDonald s Food & Beverage 5, % 2.2% KFC Food & Beverage 5, % 2.1% Darling Fashion & Footwear 2, % 2.0% Guardian Services 3, % 1.7% Kaison Homewares & Furnishing 9, % 1.6% Reject Shop Fashion & Footwear 5, % 1.5% Top 10 Tenants (by monthly rental income) 262, % 36.5% Other Tenants 257, % 63.5% Total 519, % 100.0% * Based on monthly rental income for December 2016.

26 HEKTAR REAL ESTATE INVESTMENT TRUST ANNUAL REPORT Portfolio Performance Location Title 69 Jalan Ali, Off Jalan Sulaiman Muar, Johor Freehold Wetex Parade is an integrated retail development located within the commercial district of Muar, Johor. Wetex Parade is the leading shopping centre in town and serves as the premier retail destination for the Muar area. As part of the integrated development, Classic Hotel is situated on top of Wetex Parade and is one of the leading hotels in Muar. Hektar REIT has secured a 10-year net lease with the operator as part of the terms of the acquisition in May Primary Trade Area 201,600 within 20-mins drive time Gross Floor Area 281,590 sq ft Net Lettable Area 159,153 sq ft Classic Hotel 125,931 sq ft GFA/NLA Car Park 175 Valuation* # RM135.2 million Tenants* 76 Key Tenants The Store, McDonald s, Watsons, Popular Occupancy 100.0% Visitor Traffic 4.6 million per annum Year Opened 1996 Year Acquired 2008 Data as of 31 December * Only NLA Lots. WETEX Parade s Tenancy Mix n Fashion & Footwear 53.7% n Food & Beverage/ Food Court n Department Store/ Supermarket 26.0% 23.6% 16.3% 11.5% 12.9% 11.3% 9.0% n Gifts/Books/Toys/ Specialty n Education/Services n Leisure & Entertainment/ Sports & Fitness 11.2% 6.2% 6.0% 5.3% 40% 3.1% n Electronics & IT n Homewares & Furnishing n Others By Rental Income* By NLA WETEX PARADE S EXPIRY PROFILE nla of nla of Tenancies % of Total no. of Tenancies Expiring Monthly For Year Ending Tenancies Expiring as % of Rental 31 December expiring (sq ft) Total NLA Income* FY ,868 69% 48% FY ,203 20% 35% FY ,985 11% 17% * Based on monthly rental income for December 2016.

27 Highlights Õ Management Discussions and Analysis Õ Sustainability and Corporate Governance Õ Financials Õ OTHERS 25 WETEX PARADE S TOP TEN TENANTS nla % of % of Monthly Tenant Trade Sector (sq ft) Total NLA Rental Income* The Store Department Store/Supermarket 85, % 26.0% Watsons Services 2, % 4.3% Living Cabin Gifts/Books/Toys/Specialty 2, % 3.0% McDonald s Food & Beverage 2, % 2.5% Tanjongmas Bookcentre Gifts/Books/Toys/Specialty 4, % 2.3% Popular Gifts/Books/Toys/Specialty 7, % 2.3% Sukan Muara Leisure & Entertainment/Sports & Fitness 1, % 2.1% Fabiano Ricco/Ecco Fashion & Footwear 1, % 2.0% Baker House Confectionery Food & Beverage % 1.8% Pao Sing Gifts/Books/Toys/Specialty 1, % 1.8% Top 10 Tenants (by monthly rental income) 108, % 48.1% Other Tenants 50, % 51.9% Total 159, % 100.0% * Based on monthly rental income for December 2016.

28 HEKTAR REAL ESTATE INVESTMENT TRUST ANNUAL REPORT Portfolio Performance Location Title 23, Jalan Kampung Baru Sungai Petani, Kedah Freehold Completed in 1997, Central Square is the most established retail centre in Sungai Petani and is considered as one of the most recognisable landmarks in the area. Strategically situated in the town centre, the Central Square property is well-positioned as a neighbourhood mall that caters to its immediate surrounding community. It houses an established mix of national and international brand retailers. Central Square was relaunched in 2015 upon the completion of its extensive asset enhancement initiatives ( AEI ). The mall is now fitted with a modern facade, bright interior and a brand new cinema having eight screens. Primary Trade Area Gross Floor Area Net Lettable Area Car Park 477 Valuation Tenants* 70 Key Tenants 406,870 within 20-mins drive time 743,117 sq ft 311,230 sq ft Occupancy 96.6% Visitor Traffic RM95.7 million The Store, Perfect Mobile Village, MBO Cinemas, Popular Bookstore, Dave s Deli, Mr DIY 3.9 million per annum Year Opened 1997 Year Acquired 2012 Data as of 31 December * Only NLA Lots. CENTRAL Square s Tenancy Mix 43.2% 29.7% 16.2% 24.7% 8.0% 13.1% 11.6% 5.7% 12.2% 8.8% 6.6% 4.2% 4.2% 0.1% 4.2% 5.4% 0.1% 2.1% n Fashion & Footwear n Food & Beverage/ Food Court n Department Store/ Supermarket n Gifts/Books/Toys/ Specialty n Education/Services n Leisure & Entertainment/ Sports & Fitness n Electronics & IT n Homewares & Furnishing n Others By Rental Income* By NLA CENTRAL SQUARE S EXPIRY PROFILE nla of nla of Tenancies % of Total no. of Tenancies Expiring Monthly For Year Ending Tenancies Expiring as % of Rental 31 December expiring (sq ft) Total NLA Income* FY ,121 80% 72% FY ,774 7% 18% FY , % 10% * Based on monthly rental income for December 2016.

29 Highlights Õ Management Discussions and Analysis Õ Sustainability and Corporate Governance Õ Financials Õ OTHERS 27 CENTRAL SQUARE S TOP TEN TENANTS nla % of % of Monthly Tenant Trade Sector (sq ft) Total NLA Rental Income* The Store Department Store/Supermarket 130, % 29.7% Perfect Mobile Village Electronics & IT 13, % 5.7% MBO Cinemas Leisure & Entertainment/Sports & Fitness 34, % 5.5% Anjung Irama Services Leisure & Entertainment/Sports & Fitness 13, % 3.8% KFC Food & Beverage 3, % 3.5% Panbowling Leisure & Entertainment/Sports & Fitness 25, % 2.8% Studio Fashion & Footwear 6, % 2.8% Popular Gifts/Books/Toys/Specialty 6, % 2.6% Mr DIY Homewares & Furnishing 11, % 2.4% Food Karnival Food & Beverage 6, % 2.0% Top 10 Tenants (by monthly rental income) 251, % 60.8% Other Tenants 59, % 39.2% Total 311, % 100.0% * Based on monthly rental income for December 2016.

30 HEKTAR REAL ESTATE INVESTMENT TRUST ANNUAL REPORT Portfolio Performance Location No. 1, Jalan KLC Satu (1) Kulim, Kedah Title Freehold Landmark Central is the prime neighbourhood mall in Kulim. It offers shoppers a plethora of retailers including Giant Superstore as well as a large variety of telecommunication stores. Two of its anchor tenants Big Cinemas and Ole Ole Superbowl, are the only cinema and bowling centre respectively in Kulim. This allows Landmark Central to capitalise on its unique selling proposition as an allencompassing neighbourhood mall. Landmark Central is currently undergoing an asset enhancement initiative ("AEI"), and is expected to complete by mid Primary Trade Area Gross Floor Area Net Lettable Area Car Park 610 Valuation Tenants* 67 Key Tenants 181,195 within 20-mins drive time 513,333 sq ft Occupancy 98.9% Visitor Traffic Year Opened ,388 sq ft RM112.0 million Giant, The Store, Big Cinemas, SEC, Pizza Hut, KFC 3.0 million per annum Year Acquired 2012 Data as of 31 December * Only NLA Lots. LANDMARK CENTRAL s Tenancy Mix 47.0% 26.5% 24.1% 23.2% 12.6% 13.0% 9.1% 8.9% 10.7% 5.1% 4.5% 3.9% 8.0% 3.6% n Fashion & Footwear n Food & Beverage/ Food Court n Department Store/ Supermarket n Gifts/Books/Toys/ Specialty n Education/Services n Leisure & Entertainment/ Sports & Fitness n Electronics & IT n Homewares & Furnishing n Others By Rental Income* By NLA LANDMARK CENTRAL S EXPIRY PROFILE nla of nla of Tenancies % of Total no. of Tenancies Expiring Monthly For Year Ending Tenancies Expiring as % of Rental 31 December expiring (sq ft) Total NLA Income* FY ,501 60% 48% FY ,698 35% 44% FY ,237 3% 8% * Based on monthly rental income for December 2016.

31 Highlights Õ Management Discussions and Analysis Õ Sustainability and Corporate Governance Õ Financials Õ OTHERS 29 LANDMARK CENTRAL S TOP TEN TENANTS nla % of % of Monthly Tenant Trade Sector (sq ft) Total NLA Rental Income* Giant Superstore Department Store 72, % 15.1% The Store Department Store 57, % 9.3% Big Cinemas Leisure & Entertainment/Sports & Fitness 24, % 5.2% Ole Ole Superbowl Leisure & Entertainment/Sports & Fitness 23, % 3.5% Hasani Books Gifts/Books/Toys/Specialty 5, % 3.5% SEC Electronics & IT 5, % 2.8% CYC Mega Leisure World Leisure & Entertainment/Sports & Fitness 11, % 2.6% Pizza Hut Food & Beverage 3, % 2.3% KFC Food & Beverage 3, % 2.3% Hussain Nasi Kandar Food & Beverage 3, % 2.0% Top 10 Tenants (by monthly rental income) 210, % 48.6% Other Tenants 70, % 51.4% Total 281, % 100.0% * Based on monthly rental income for December 2016.