HONG KONG, 18 August 2008 - Prosperity Real Estate Investment Trust ("Prosperity REIT") [SEHK: 0808] today announced its unaudited interim results for the six months ended 30 June 2008 (the "Reporting Period").

Prosperity REIT delivered an outstanding performance during the Reporting Period. Distribution per unit ("DPU") rose 8.0% year-on-year ("YoY") as revenue and net property income grew by 7.7% YoY and 10.2% YoY, respectively. With the upward valuation of our property portfolio, net asset value per unit also increased to HK$2.58 as at 30 June 2008. Healthy organic growth was achieved through proactive asset management efforts and prudent cost management. The continued uptrend in the Hong Kong commercial property sector also contributed to Prosperity REIT's strong performance.

We, ARA Asset Management (Prosperity) Limited, as the manager of Prosperity REIT (the "Manager"), are pleased to announce that our unitholders will receive an interim DPU of HK$0.0690 for the Reporting Period, representing an attractive annualized distribution yield of 9.2%, based on Prosperity REIT's closing unit price of HK$1.50 on 30 June 2008.

Operation Review

Prosperity REIT delivered strong results during the Reporting Period on the back of the Manager\s professional management expertise and a buoyant property market. Prosperity REIT’s net property income of HK$103.6 million and revenue of HK$128.9 million rose 10.2% YoY and 7.7% YoY, respectively.

As a result of proactive leasing efforts and efficient tenant recruitment strategies, the average effective unit rent of the portfolio increased by 5.9% YoY to HK$14.07 per sq. ft., complemented by a high occupancy rate of 99.1% as at 30 June 2008.

The cost–to-revenue ratio decreased to 19.6%, which is 8.8% lower than a year ago. Gearing ratio has improved to 32.5% as at the end of June 2008, enhancing Prosperity REIT's financial foundation for future growth.

Financial Review

Revenue - During the Reporting Period, revenue stood at HK$128.9 million, which was HK$9.2 million or 7.7% higher than the last corresponding half year. The revenue was made up of HK$108.2 million of rental and car park income, plus HK$20.7 million of rental related income. Rental and car park income was HK$7.7 million or 7.7% above the last corresponding half year. The increase was mainly due to an increase in average effective unit rent and occupancy rate.

Net Property Income - Net property income was HK$103.6 million, exceeding the last corresponding half year by HK$9.6 million or 10.2%. The growth was attributed to higher revenue generated during the Reporting Period. The cost-to-revenue ratio has improved to 19.6% from 21.5% in the last corresponding half year.

Distribution - For the Reporting Period, the unaudited distributable income of Prosperity REIT to unitholders of Prosperity REIT was HK$89,024,000. The interim DPU is HK$0.0690, representing an annualized distribution yield of 9.2% based on the last traded price of HK$1.50 as of 30 June 2008, outperforming the last corresponding half year by 8.0%.

Prospects

Looking ahead, the ongoing economic slowdown in the US and global financial market turbulence could affect business sentiment as uncertainty persists. However, Hong Kong's economy has remained resilient, supported by strong business links with Mainland China. We expect domestic demand to remain healthy, boosted by the low interest rate environment and firm job market conditions. It is expected that the Hong Kong commercial property market will continue to experience steady demand on the back of corporations seeking expansion opportunities. The Manager will implement more asset enhancement initiatives and effective cost control measures to enhance returns for unitholders.