Fortune Real Estate Investment Trust : Changes in Board Composition

The Securities and Futures Commission of Hong Kong, Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

Fortune Real Estate Investment Trust

(a Hong Kong collective investment scheme authorized under section 104

of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong))

(Stock Code: 778)

Managed by

ARA Asset Management (Fortune) Limited

CHANGES IN BOARD COMPOSITION

In order to comply with the proposed amendments to the Securities and Futures (Licensing and Conduct of Business) Regulations (as further described below), the Board wishes to announce the following changes to the composition of the Board and the Board committees with effect from 1 January 2017:

1. Dr Chiu Kwok Hung, Justin will step down as chairman of the Board but will remain as a non-executive director;

2. Mrs Sng Sow-Mei (alias Poon Sow Mei) and Dr Lan Hong Tsung, David will resign as Independent Non-Executive Directors and cease to be members of the Audit Committee;

3. Mr Lim Lee Meng will cease to be the lead independent director, the chairman of the Audit Committee and a member of the Disclosures Committee and Designated Committee but will remain as an Independent Non-Executive Director and a member of the Audit Committee;

4. Mr Chui Sing Loi (alias Tsui Sing Loi) will be appointed as an Independent Non- Executive Director, the chairman of the Board and a member of the Audit Committee; and

5. Ms Cheng Ai Phing will be appointed as an Independent Non-Executive Director, the chairman of the Audit Committee and a member of the Disclosures Committee and Designated Committee.

Separately, the Board also wishes to announce that Mr Ang Meng Huat, Anthony will resign as an executive director with effect from 1 January 2017 to pursue his personal interests.

CHANGES IN BOARD COMPOSITION

The board of directors (the "Board") of ARA Asset Management (Fortune) Limited (the "Manager"), as the manager of Fortune Real Estate Investment Trust ("Fortune REIT"), reviews the structure, size and composition of the Board from time to time to ensure that the Board has the appropriate mix of expertise and experience in order to achieve a balance of skills, experience and diversity of perspectives. As part of its renewal process, the Board has identified several persons who have the experience and skills to widen the diversity of perspectives on the Board and maintain good corporate governance, to succeed the current independent non-executive directors ("Independent Non-Executive Directors") of the Manager.

In addition, as a holder of a Capital Markets Services License in Singapore, the Manager is required to comply with proposed amendments to the Securities and Futures (Licensing and Conduct of Business) Regulations relating to the independence and board composition requirements that will take effect no later than the first annual general meeting of Fortune REIT for the financial year ending 31 December 2016. In this regard, an independent director of the Manager shall not serve on the Board for a continuous period of 9 years or longer, or shall not hold any directorships in the related corporations of the substantial shareholder of the Manager or the substantial unitholder of Fortune REIT. Also, the Manager shall not appoint any immediate family member of the chief executive officer as the chairman of the Board. A similar requirement under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") (as if applicable to Fortune REIT) to the effect that if an independent non-executive director has served on the Board for more than 9 years, his/her further appointment shall be subject to separate unitholders approval of Fortune REIT has been set out in the Manager's compliance manual (the "Compliance Manual").

In order to comply with the proposed amendments to the Securities and Futures (Licensing and Conduct of Business) Regulations mentioned above, the Board wishes to announce the following changes to the composition of the Board and the Board committees with effect from 1 January 2017:

1. Dr Chiu Kwok Hung, Justin will step down as chairman of the Board but will remain as a non- executive director;

2. Mrs Sng Sow-Mei (alias Poon Sow Mei) and Dr Lan Hong Tsung, David will resign as Independent Non-Executive Directors and cease to be members of the Audit Committee;

3. Mr Lim Lee Meng will cease to be the lead independent director, the chairman of the Audit Committee and a member of the Disclosures Committee and Designated Committee but will remain as an Independent Non-Executive Director and a member of the Audit Committee;

4. Mr Chui Sing Loi (alias Tsui Sing Loi) will be appointed as an Independent Non-Executive Director, the chairman of the Board and a member of the Audit Committee; and

5. Ms Cheng Ai Phing will be appointed as an Independent Non-Executive Director, the chairman of the Audit Committee and a member of the Disclosures Committee and Designated Committee.

   Separately, the Board also wishes to announce that Mr Ang Meng Huat, Anthony will resign as an executive director with effect from 1 January 2017 to pursue his personal interests.

   Dr Chiu Kwok Hung, Justin, Mrs Sng Sow-Mei (alias Poon Sow Mei), Dr Lan Hong Tsung, David, Mr Lim Lee Meng and Mr Ang Meng Huat, Anthony have each confirmed that he/she has no disagreement with the Board and there are no other matters regarding their changes or resignations (as the case may be) that need to be brought to the attention of the unitholders of Fortune REIT.

   The Board would like to take this opportunity to express its gratitude to Mrs Sng Sow-Mei (alias Poon Sow Mei), Dr Lan Hong Tsung, David and Mr Ang Meng Huat, Anthony for their valuable contributions to the Manager and Fortune REIT during their tenure of services.

   Following the aforesaid changes, the composition of the Board and Board committees will be as follows with effect from 1 January 2017:

   Board

   • Mr Chui Sing Loi (alias Tsui Sing Loi) (Chairman and Independent Non- Executive Director)

   • Dr Chiu Kwok Hung, Justin (Non-Executive Director)

   • Mr Lim Hwee Chiang (Non-Executive Director)

   • Ms Eirene Yeung (Non-Executive Director)

   • Mr Ma Lai Chee, Gerald (Non-Executive Director)

   • Ms Chiu Yu, Justina (Chief Executive Officer and Executive Director)

   • Mr Lim Lee Meng (Independent Non-Executive Director)

   • Ms Cheng Ai Phing (Independent Non-Executive Director)

     Audit Committee

   • Ms Cheng Ai Phing (Chairman)

   • Mr Lim Lee Meng

   • Mr Chui Sing Loi (alias Tsui Sing Loi)

     Disclosures Committee

   • Ms Chiu Yu, Justina (Chairman)

   • Ms Eirene Yeung

   • Ms Cheng Ai Phing

     Designated Committee

   • Ms Chiu Yu, Justina (Chairman)

   • Mr Ma Lai Chee, Gerald

   • Ms Cheng Ai Phing

   The Board confirms that the composition of the Board and the Board committees will remain in compliance with the Manager's corporate governance policy following the aforesaid changes.

   Mr Chui Sing Loi (alias Tsui Sing Loi) ("Mr Chui")

   Mr Chui, aged 68, is a non-executive director of the following private subsidiaries of Cheung Kong Property Holdings Limited and CK Hutchison Holdings Limited: Property Enterprises Development (Singapore) Pte Ltd, Japura Pte Ltd, Japura Development Pte Ltd, Glenfield Investments Pte Ltd, Grand Waterfront Development Pte Ltd, Luxury Green Development Pte Ltd, Kovan Treasure Pte Ltd, HWP Finance (Singapore) Private Limited, HWP Investment Holdings (Singapore) Private Limited, CK Capital (Singapore) Pte Limited, Hutchison Biofilm Solutions Pte Limited, Hutchison Ports Jakarta Pte Limited, Hutchison Water International Holdings Pte Limited and Advent Investments Pte Ltd (collectively, the "Relevant Companies"). Each of the Relevant Companies is regarded as a connected person of Fortune REIT for the purpose of the Hong Kong Code on Real Estate Investment Trusts by virtue of being an associate or associated company of Focus Eagle Investments Limited, a significant holder of Fortune REIT.

   Mr Chui has extensive professional experience in property development, investment and facility management.

   Mr Chui holds a Bachelor of Science (Engineering) from The University of Hong Kong.

   The Manager is of the view that Mr Chui meets the director independence requirements of the Compliance Manual and the Listing Rules (as if applicable to Fortune REIT) after taking into account that, as at the date of this announcement and save as disclosed above:

6. each of the Relevant Companies is incorporated in Singapore. Under the Singapore Companies Act, such companies must have at least one director who is ordinarily resident in Singapore. Mr Chui is the Singapore resident director of the Relevant Companies, and has not held any executive or management function in the Relevant Companies during the past two years;

7. the Relevant Companies have not entered into any transactions with Fortune REIT, and also do not compete with Fortune REIT since their core business is different to Fortune REIT's. Prior to Mr Chui's appointment as an Independent Non-Executive Director becoming effective, he will also resign as a director of each of the Relevant Companies and cease to have any positions or other interest in such companies;

8. Mr Chui does not have any relationship with any directors or senior management of the Manager, the trustee of Fortune REIT or the significant holders (as defined in the Hong Kong Code on Real Estate Investment Trusts) of Fortune REIT, that could interfere or be reasonably perceived to interfere with the exercise of his independent business judgment with a view to the best interests of Fortune REIT;

9. Mr Chui does not have any interest in the units of Fortune REIT within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong);

10. to the best of the Manager's knowledge, Mr Chui will not be financially dependent on his annual emolument as an Independent Non-Executive Director;

11. the Manager believes that Mr Chui is able to exercise his professional judgment and draw upon his extensive knowledge in property development and investment management for the benefit of Fortune REIT and its unitholders as a whole, in particular, the independent unitholders;

12. Mr Chui has confirmed his independence to the Manager with reference to the criteria affecting independence, as set out in the Compliance Manual, and has undertaken to inform the Securities and Futures Commission as soon as practicable if there is any subsequent change of circumstance which may affect his independence in acting as an Independent Non-Executive Director during the term of his directorship; and

13. save for his directorship in the Relevant Companies in the past two years (for the avoidance of doubt, prior to Mr Chui's appointment as an Independent Non- Executive Director becoming effective, he will resign as a director of each of the Relevant Companies and cease to have any positions or other interest in such companies), none of the other factors set out in Rule 3.13 of the Listing Rules and the Compliance Manual applies to Mr Chui.

In light of the above, notwithstanding Mr Chui has been a director of the Relevant Companies during the past two years, the present Audit Committee, as well as the full Board (including all the Independent Non-Executive Directors) are of the opinion that Mr Chui has the character, integrity, experience and independent judgment to carry out his duties as an Independent Non-Executive Director and is independent from Fortune REIT. The Manager has informed HSBC Institutional Trust Services (Singapore) Limited in its capacity as the trustee of Fortune REIT of such opinion, and confirm that they have no objection in respect of the same.