Franshion Properties (China) Limited Announces 2010 Interim Results

During the period, the gross profit margin of the Company improved by 2 percentage points to 50%. The total GFA of the three business segments reached 3.23 million square meters. For the six months ended 30 June 2010, cash and cash equivalents held by the Company amounted to HK$4.268 billion.

Mr. Luo Dongjiang, Chairman of Franshion Properties, said, The first half of 2010 is full of opportunities and challenges. Under the positive impacts brought by the development of Hainan into an International Tourism Island and the hosting of the World Expo in Shanghai, Franshion Properties has taken advantage of market opportunities and policy directions and elevated its business performance substantially.

The three business segments have reported excellent development and operation. In particular, Shanghai Port International Cruise Terminal has become an important profit contributor in the first half of the year. While business has remained stable in property leasing, the Company s hotel operation segment has recorded a significant improvement in business results.

We have also quickened the pace of building up our land reserves, including No.15 Guangqu Road Project in Beijing, Shanghai International Shipping Service Center Project and Shanghai Chongming Island Project. Thus a strong foundation has been established for rapid development in the future, said Mr.

Luo.

Property Development Pleasing sales resulted from development projects and smooth going for construction in progress

In 1H2010, Franshion Property accomplished strong growth in the property development segment. Most of the units in the Shanghai Port International Cruise Terminal Project were sold or presold. Sales revenue was recognized after four office buildings were delivered to owners. Also, 8 out of 11 office buildings have already been sold, accounting for 71% of the total estimated saleable area upon completion of construction.

The remaining un-sold buildings were expected to be completed within the year. The adjacent Shanghai International Shipping Service Center Project, which is currently under construction, has become a key component of Shanghai s urban development strategy.

Government approval for the Shanghai Chongming Island Project had been completed and construction commenced in July. Pre-construction preparation of No.15, Guangqu Road Project in Beijing is now underway. This project will be developed as a complex comprising high-end residential and commercial properties as well as leisure and educational facilities. Construction is expected to commence in the second half of this year.

Property Leasing High occupancy and rental rates maintained

The Company s leasing properties include the Central and West Towers of Beijing Chemsunny World Trade Center, Sinochem Tower in Beijing and Jin Mao Tower in Shanghai. As all three projects are located at prime locations in first-tier cities, both occupancy and rental rates were kept at relatively high levels among similar properties. The tenant portfolio, which mainly includes leading international and domestic financial institutions, is stable.

In 1H2010, the occupancy rates of the Central and West Towers of Beijing Chemsunny World Trade Centre, Sinochem Tower and Jin Mao Tower were respectively 94.4%, 96% and 87.2%.

Hotel Operations Market opportunities seized and business results soared

The Company currently owns six high-end luxurious hotels, namely Grand Hyatt Shanghai; the Ritz-Carlton, Sanya; Hilton Sanya Resort & Spa; Westin Beijing, Chaoyang; Wangfujing Grand Hotel and JW Marriott Shenzhen, in Shanghai, Sanya, Beijing and Shenzhen. The total number of guest rooms reaches 2,872.

In the first half of the year, Franshion Properties firmly captured the timing of the recovery of the domestic hotel market and adopted flexible measures to significantly improve both the performance and operational efficiency of its hotel business. In particular, Grand Hyatt Shanghai exploited the opportunities brought by the World Expo and its occupancy and room rates were lifted.

As the State s International Tourism Island planning for Hainan at the beginning of this year drove tourism spending growth in the Sanya area, the Company s two high-end hotels in Sanya adopted reasonable operational and pricing strategies to strengthen their core competitiveness and succeeded in boosting their occupancy and room rates.

Reserved Projects Active project development provided solid foundation for the future

Currently, the Company has three projects under planning, namely the Jin Mao World Heritage Park Redevelopment Project and the Jin Mao Yulong Snowy Mountain Resort Hotel Project in Linjiang, Yunan Province, and the Lanhai Xingang City Project in Qingdao. The two Lijiang projects are expected to be completed within three years. In addition, Franshion Properties entered into a Framework Cooperation Agreement with Qingdao Urban Investment Group in May 2010 to jointly develop the Lanhai Xingang City Project in Qingdao.

In the first half of 2010, Franshion Properties adopted the business model of developing and holding of commercial properties and demonstrated once again its sound risk resistance capability. Looking forward to the second half, although the mainland property market will be increasingly affected by control policies and there are still uncertainties in the global economy, we will continue to grasp market opportunities and endeavor to develop large-scale city complexes to accelerate our scaling up and to become China s leading high-end property developer and operator, Mr. Luo concluded.