There are limitations on the ownership of units in Frasers Logistics & Commercial Trust ("FLCT")

Holders of units in FLCT ("Units", and the holders of Units, "Unitholders") are subject to the Unit Ownership Limit, that is, they are prohibited from directly or indirectly owning in excess of 9.9% of the outstanding Units (or such other applicable limits on unitholdings under the Australian Taxation Administration Act 1953 (Cth) which would be necessary for the head Australian trust (the "HAUT") to qualify as a "managed investment trust" ("MIT")). This limitation is to ensure that the HAUT or such other trusts acquired or established by FLCT in Australia continue to qualify as a MIT, where such Australian trust would otherwise qualify as a MIT.

Specifically, to qualify as a MIT, an Australian unit trust held by FLCT (being a Singapore REIT) must, among other requirements, not be closely held which can occur where a Foreign Resident Individual¹ holds MIT Participation Interests² in the Australian trust of 10.0% or more (the "closely held test"). To help comply with the closely held test, the Unit Ownership Limit restricts transfers of Units that would otherwise result in concentrated ownership positions. Such restriction is necessary to ensure that FLCT continues to enjoy preferential Australian withholding tax rates on distributions by a MIT.

Absent any exemption or waiver from the Unit Ownership Limit (which can be granted by the REIT Manager if such ownership would not impact the MIT qualification of the HAUT or such other trusts acquired or established by FLCT in Australia, where such Australian trust would otherwise qualify as a MIT) or save in the situation where the Take-Over Exception³ applies, Units acquired or held in excess of the Unit Ownership Limit will be subject to the Forfeiture Mechanism, where Units held directly or indirectly by any person in excess of the Unit Ownership Limit (the "Excess Units") will be automatically forfeited (the "Forfeiture Mechanism") and held by the trustee appointed to perform the functions required for purposes of the Forfeiture Mechanism⁴, and the Unitholder's rights to distributions in respect of such Excess Units and to vote would terminate.

The Forfeiture Trustee will arrange for the sale of the Excess Units pursuant to the terms of the Forfeiture Mechanism. The Unitholder from whom the Excess Units were forfeited shall receive the lesser of: (a) the Market Price of the Units on the day of the Excess Units are deemed to be forfeited; and (b) the proceeds received by the Forfeiture Trustee from the sale or other disposition of the forfeited Excess Units, in each case net of any commissions and expenses, including the costs and expenses of the Forfeiture Trustee and less distributions received by the Unitholder in respect of such forfeited Excess Units prior to the disposal of the forfeited Excess Units which are owed by the Unitholder to the Forfeiture Trustee.

(See "Important Notice Regarding the Ownership of Units " Restriction on ownership of Units in excess of 9.9% of the outstanding Units" in the final prospectus dated and registered with the Monetary Authority of Singapore on 10 June 2016 for further details.)

Notwithstanding the Take-Over Exception, this limitation on ownership of Units could delay, discourage or, as the case may be, prevent a transfer of Units or the ability of an investor to acquire control of or take-over FLCT and, as a result, may adversely affect the ability of Unitholders to realise any potential change of control premium.

For the avoidance of doubt, the Forfeiture Mechanism is effective automatically, whether or not the REIT Manager is aware of the change in ownership or aware of the fact that the Unit Ownership Limit has been breached and without any requirement for notice by the REIT Manager. That is, the Unitholder will be deemed to have held the forfeited Excess Units on trust for the Forfeiture Trustee from the date of forfeiture until the forfeited Excess Units are legally transferred to the Forfeiture Trustee.

Unitholders are advised to manage their interests in the Units so as not to breach the Unit Ownership Limit and trigger the Forfeiture Mechanism.