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Fixing of Interest Rate

2008-10-22

Prosperity REIT [SEHK: 808] currently has a term loan of HK$1,770 million (Term Loan) which was granted at the time of IPO in December 2005. The Term Loan will only mature on 16 December 2010 (Maturity Date). With a view to hedge against interest rate fluctuations, Prosperity REIT has recently entered into two separate plain vanilla interest rate swap agreements (Agreements) on a substantial portion of the Term Loan. Details of the Agreements are as follows:

1. 50% of the Term Loan has been fixed at 2.65% plus a spread of 0.49%, with effect from 22 September 2008; and

2. 20% of the Term Loan has been fixed at 2.60% plus a spread of 0.49%, with effect from 16 December 2008.

Prosperity REIT has now fixed 70% of the Term Loan until the Maturity Date. The remaining 30% of the Term Loan is maintained at prevailing and floating interest rate of HIBOR + 0.49%.

The Manager believes that such financial arrangement is prudent under current market uncertainties. We will continue to monitor interest rate movements closely and put in place prudent financial arrangement in the interest of unitholders.

Yours faithfully,

ARA Asset Management (Prosperity) Limited (as manager of Prosperity Real Estate Investment Trust)

22 October, 2008

(The information shown herein does not constitute an invitation or offer to acquire, purchase or subscribe for securities. Investment involves risk. You should carefully consider whether the investment product mentioned herein is appropriate for you in view of your personal circumstances. Past performance is no guide to future performance. Investors should refer to the offering document of Prosperity REIT for further details and risks involved. The price of investment products may move up or down. Losses may be incurred as well as profits made as a result of buying and selling investment products.)