Treasury Holdings Real Estate Pte Ltd, the Trustee Manager of Treasury China Trust ("TCT"), today announced a Strategic Partnership Agreement with the Qingdao-based TRIO Group to expand into China's east coast province of Shandong in what CEO Richard David says, "is the first in what we expect to be a number of such announcements in the coming months to broaden TCT's China footprint." This strategic cooperation marks an important first step for TCT, which listed on the SGX in June of this year with SGD1.9 billion in assets, into China's regional gateway cities outside of its current base of Beijing and Shanghai.

The TRIO Group has been operating in Qingdao and the broader Shandong Province with great success for over 15 years and has developed high quality real estate projects totaling in excess of three million square meters, representing more than 20 projects, predominantly in the residential sector. TRIO has been the recipient of numerous awards, and in 2008 was recognized as Qingdao's "Outstanding Real Estate Developer" and ranked in the city's Top 20 Private Enterprises. The group is aspiring to develop a diversified real estate portfolio and gain a strong foothold in the fast growing commercial property sector through its alliance with TCT.

CIO Wendy Yao responsible for TCT's business development put together the deal, "We are very excited about this partnership, and in TRIO, we have identified a strong and capable group to assist with the continued growth of our business in China. It is critical to our ongoing success that we develop strategic alliances in key provincial regions.  In this regard, the Shandong Province and particularly Qingdao, as a major east coast city, meet our key criteria for business expansion and more importantly will provide investment opportunities that will allow the growth of our balance sheet through accretive acquisitions."

Mr David added, "TRIO has an excellent record in quality real estate development and in identifying and delivering direct access to investment opportunities. We look forward to a long term relationship with TRIO that will focus on TCT's core competency of commercial real estate and provide considerable value to TCT and our unitholders. Tenant demand for quality, international grade commercial space in Qingdao is robust, however, this demand has been largely unmet due to constrained supply and limited participation of quality, experienced international developers"

The Strategic Partnership will focus exclusively on commercial real estate with a particular focus on retail properties and TCT will assume a majority equity and managerial control of all invested projects, from overseeing all design, development and asset management functions, to providing technology and systems transfers to TRIO through the shared management platforms.

Market access is a fundamental component for this alliance and in this regard, the partnership ensures exclusivity and investment rights for both parties. Accordingly, TRIO will utilise its local market knowledge and established network in the Shandong Province to introduce investment and development opportunities to the partnership.

Xie Jing Dong, Director of TRIO Group said, "We have been very impressed with the management platform and asset portfolio that TCT has built to date and the strong commitment it has made to China's commercial real estate sector. This partnership recognises true alignment and combines the key individual advantages of TCT and ourselves to drive significant long term performance for our mutual benefit."

Located on China's east coast, Shandong is one of China's most populated provinces and third largest in terms of GDP. Its total retail sales rose 9.9% to RMB 1,236 billion in 2009, ranking 2nd nationwide, behind Guangdong Province. Qingdao, probably best known for its annual beer festival, is China's fifth largest seaport and amongst the top 10 ports globally. It is one of Shandong's most dynamic and affluent cities and is further benefited by its international airport, which provides direct access to major cities in Asia including Japan and Korea on a daily basis.