HONG KONG, 15 August 2007 - Prosperity Real Estate Investment Trust ("Prosperity REIT") [SEHK: 0808] today announced its interim results for the six months ended 30 June 2007 ("Reporting Period").

Prosperity REIT recorded a strong performance for the first six months of 2007. Revenue rose by 17.5% year-on-year ("YoY"), while distribution per unit ("DPU") improved by 10.7% over the last corresponding period. This outstanding performance has been achieved on the back of buoyant economic conditions in Hong Kong and business expansion amongst all sectors in the territory.

An attractive DPU of HK$0.0639 has been realized for our unitholders, representing an annualized tax exempt yield of about 8.15% for the first half of 2007. With the upward revaluation of the seven properties in our portfolio, the net asset value per unit increased by 1.7% to HK$2.42 as at 30 June 2007.

Operation Review

Against the backdrop of a positive and bullish property market, coupled with the Manager’s professional management expertise, Prosperity REIT delivered a strong performance during the period under review. For the first six months of 2007, Prosperity REIT’s net property income surged 19.1% YoY to HK$94.0 million. As a result of effective leasing strategies, portfolio occupancy reached 97.0% as at 30 June 2007. The average effective unit rent also grew substantially by 17.3% to HK$13.29 per sq. ft.

As part of the Manager’s ongoing cost rationalization initiatives, the cost–to-revenue ratio was lowered to 21.5%, as compared to 22.6% in the last corresponding period. The gearing ratio was improved to 34.3%, enhancing financing flexibility for yield accretive acquisitions in the future.

In addition to achieving strong organic growth, the Manager has also completed two yield accretive acquisitions during the interim period to boost returns to unitholders. These two acquisitions of strata-titled units in Prosperity Center will increase Prosperity REIT’s ownership and strengthen management control in the building. The Manager aims to pursue more yield accretive acquisitions in the near future, with a view to generating greater returns to unitholders.

Financial Review

Revenue - During the Reporting Period, revenue stood at HK$119.7 million, which was HK$17.8 million or 17.5% higher than the last corresponding half year. The revenue was made up of HK$100.5 million of rental and car park income, plus HK$19.2 million of rental related income. Rental and car park income was HK$16.3 million or 19.3% above the last corresponding half year. The increase was mainly due to an increase in average effective unit rent.

Net Property Income - Net property income was HK$94.0 million, exceeding the last corresponding half year by HK$15.1 million or 19.1%. The growth was attributed to higher revenue generated during the Reporting Period. The cost-to-revenue ratio has improved to 21.5% from 22.6% in the last corresponding half year.

Distribution - For the six-month period from 1 January 2007 to 30 June 2007, the unaudited distributable income of Prosperity REIT to unitholders of Prosperity REIT was HK$81,331,000. The interim DPU is HK$0.0639, representing an annualized distribution yield of 8.15%, outperforming the last corresponding half year by 10.7%.

Going Forward

Looking ahead, the Manager believes that the positive property market outlook and stable economic environment in Hong Kong will result in a fruitful year for Prosperity REIT. As corporate expansion continues from many businesses, the demand for office and industrial space is expected to maintain its strong growth momentum. The Manager plans to implement proactive asset enhancement initiatives, effective costs control practices and yield accretive acquisitions to deliver stable and sustainable returns to unitholders in the latter half of 2007.