MMP – UOBKH

Evaluating proposals from strategic review

Received various proposals from third parties. Macquarie Pacific Star Prime REIT Management, manager of Macquarie MEAG Prime REIT (MMP REIT), has embarked on a strategic review with the objective of enhancing value for all MMP REIT unitholders. The manager has received a number of indicative proposals from third parties and is in the process of reviewing these proposals. Macquarie Real Estate Singapore, the largest unitholder with a 26% stake in MMP REIT, continues to support the strategic review.

Reiterate BUY recommendation. We like MMP REIT for strategic frontage on Orchard Road. MMP REIT benefits full year contribution from overseas investments in China and Japan in FY08. The on-going strategic review could also unlock value for investors. MMP REIT provides FY08 distribution yield of 6.08%. Our target price is S$1.55 based on two-stage dividend discount model.