PriccwatcrhouscCoopcrs

Socictc a rcsponsabilitc limitcc

Rcviscur d'cntrcpriscs
400, route d'Esch
For the attention of Mr Marius Kohl B.P. 1443
L-1014 Luxembourg
Telephone ~352 494848-1
Administration des Contributions Directes Facsimile +352 494848-2900
www .pwc.com/Iu
Bureau d'lmposition Societes VI info@Iu.pwc.com
18, rue du Fort Wedell
L-2982 Luxembourg

14 January 2009

References: DDRH/ELOR/J 180900 l M-JEGI

LaSalle Asia Opportunity Fund II

LaSalle Asia O pportunity II S.a r.I. -Tax number: 2004 2427 188
Bottom LuxCo S.a r .I. - Tax number : not yet available

Dear Mr Kohl,

At the request and on behalf of our client above, we are pleased to submit for your review
and approval the Luxembourg tax treatment of the following addition to the structure
described in the letter previously approved by you on 28 September 2005 (referenced
NANN/Jl805001M-DDRH), a copy of which is enclosed to this letter.

Alternatively, we would be pleased to receive your written comments on the additional

structuring described in this letter.

All others elements of the structure and the associated tax treatment remain unchanged.

This additional structuring has already been implemented for other funds sponsored by
Jones Lang LaSalle. Please see our letter dated 16 January 2008, referenced
DDRH/NABK/ELOR/Jl8008001M-JEGI and the letter dated 19 April 2007 referenced
DDRH/NABK/J 1807003 M-AEJE.

The issues we are seeking your approval on include the Luxembourg tax residency of
second-tier Luxembourg Soparfis, each investing in one or more "tokutei motukei kaisha"
("TMK") incorporated and resident in Japan so as to acquire Japanese real estate, and the
tax characterisation of the additional profit participating loan facilities (including its
treatment regarding tax deductibility of interest paid and for withholding tax purposes) to
be granted to the second-tier Luxembourg Soparfis.

R.C.S. Luxembourg B 65 477 - TVA LU 17564447

A Facts
i
As already mentioned in our letter of 28 September 2005, the Luxembourg
holding structure will be used to acquire (indirectly) Japanese real estate
investments (hereafter "Japanese investments").

2 The Fund intends to finance the investments primarily via profit participating
loans.

A.1 Outline structure

3 The need to interpose a second Luxembourg holding entity investing in a

TMK, as compared to the original structure envisaged in the letter of 28
September 2005, has arisen (and in the future will arise) because of the
commercial and security requirements of a third party lender, to have for this
transaction a single purpose entity acting as a bankruptcy remote company
based in Luxembourg and having an independent director.

4 Hence, in addition to the structure described in our Letter of 28 September

2005, LaSalle Asia Opportunity II Sari (hereafter referred to as "Top
LuxCo") will incorporate Bottom LuxCo, a Luxembourg company under the
legal form of a Sari, that will invest in a TMK holding Japanese immovable
property. The share capital of Bottom LuxCo will be 100% held by Top
LuxCo.

5 To finance the investment in the TMK described above, Top LuxCo will be
granted a Profit Participating Loan facility by the Fund, as envisaged in our
letter of 28 September 2005. These funds will subsequently be on lent to
Bottom LuxCo, as needed, also in the form of Profit Participating Loans
(hereafter " Bottom PPLs").

6 In the future, for similar transactions, both in Japan and potentially in other
territories, Top LuxCo could incorporate other Bottom LuxCos and finance
them in a similar way. Bottom LuxCo and other such potential future LuxCos
arc hereafter referred to as "Bottom LuxCo".

7 An amended structure chart summarising the situation 1s enclosed as

Appendix l.

(2)
A.2 Profit Participating Loans - Bottom PPLs

• Denomination will be USD.

• The Bottom PPLs will bear two types of interest as described below:

• A fixed interest coupon of 1.5 % p.a. on the outstanding balance of the

Bottom PPL; and

• A variable interest coupon computed as an amount equal to either (i)

100% of the Adjusted Accounting Profits of the borrower (i.e. Bottom
LuxCo) net of attributable overheads deriving from investments in or
Joans to SPY companies owning properties directly or indirectly ("the
Subsidiary assets") ("Adjusted Accounting Profits" are defined as the
relevant annual net accounting profit of Bottom LuxCo, before tax,
before any Variable Interest, after deduction of the fixed interest and the
carried forward losses, and after deduction of any withholding taxes
suffered being recorded as an expense) (the "basic variable interest"), or
(ii), if !:,Tfeater than the "basic variable interest", an amount equal to (a)
90% of the available cash generated by the borrower, or (if higher) (b)
75% of Adjusted Accounting Profits but before reduction for any losses
of prior periods (the "cash flow variable interest").

9 However, in the period in which Bottom LuxCo repays the PPL in full, the
Variable Interest is to be calculated differently. The amount of "basic variable
interest" is computed, and then this is reduced by the aggregate excess of
"cash flow variable interest" over "basic variable interest" in all previous
periods. (This could potentially result in " negative" interest - i.e. repayment
of excess interest paid in earlier periods - arising in this final period.)

10 A further feature of the PPL Variable Interest calculation is that the Adjusted
Accounting Profits as defined include any foreign exchange gains or losses
accounted for, including such gains or losses arising as a result of repayment
of part of or the entire outstanding balance of the PPL principal.

(3)
B Tax analysis
B.1 Luxembourg tax residency

11 Bottom LuxCo (and any other Bottom LuxCo that may be incorporated in the
future) will be a Luxembourg tax resident in the sense of the tax treaties
concluded by Luxembourg and in the sense of article 159 of Luxembourg
Income Tax Law (hereafter "LITL") to the extent that its shareholders'
meetings will be held in Luxembourg, its managers' meetings will take place
in Luxembourg, its accounting will be done in Luxembourg and its effective
management seat will be located in Luxembourg. Tax residency certificates
will be issued upon request.

B.2 Profit Participating Loans

.8. 2. / Characterisation ofPPL interest payments

12 The Bottom PPLs will be qualified as debt for both corporate income tax
purposes and interest thereon will in principle be fully tax deductible.
Furthermore interest thereon will not be subject to any withholding tax.

13 A further analysis of the tax regime applicable to the Bottom PPLs noted
above comprises Appendix 2.

il.2.2 Margin subject to taxation

14 As an appropriate margin subject to taxation will be left in Top LuxCo (see

Section 2.4 below), no further margin subject to taxation is to be left in
Bottom LuxCo .

.8.2..J Debt-to-equity ratio, dividend withholding tax

15 The overall investment made by Bottom LuxCo in the TMK (i.e. equity) is
regarded as being connected with the overall financing of Bottom LuxCo (i.e.
PPL). This is economically speaking clearly the case: if the TMK does well,
Bottom LuxCo pays out annually a very significant element of its income as
PPL interest, and if the TMK does badly, only fixed interest has to be paid on
the PPL. Bottom LuxCo does not face a high financial risk, even if the
investments perform badly.

16 Hence, Bottom LuxCo will be deemed to be in a connected position with

respect to the whole financing amount of the investment in the TMK, which
will not be covered by the participation exemption regime (please see item
2.3 below). As a consequence of this connected position, the PPL will fall
outside the scope of the Luxembourg tax practice that applies a 85: 15 debt-to-
equity ratio, and thus none of the interest paid by Bottom LuxCo will be re-
characterised into deemed dividends. As a result, all the interest paid by
Bottom LuxCo will be fully deductible for corporate tax purposes, and will
not be subject to any withholding tax that would apply were deemed
dividends to arise.
(4)
 17

B.3 Participation exemption regime - Participation of Bottom LuxCo in TM Ks

18 A TMK is a special purpose Japanese company formed under the amended

Securitisation law of 1998, which is granted certain tax privileges in Japan.

19 As a TMK can obtain an advantageous income tax rate in Japan, it fails the
"subject to tax" test which requires that the foreign tax must be assessed at a
minimum rate of 11 % on a taxable basis determined similarly to the
Luxembourg one.

20 Accordingly, Bottom LuxCo will not benefit from the participation

exemption regime for net wealth tax, corporate tax and municipal business
tax for its participation in any TMK.

B.4 Profit margin subject to taxation left in Lux HoldCo

21 Receipts of PPL interest payments from Bottom LuxCo and from any other
future Bottom LuxCos will be fully taxable in the hands of Top LuxCo. Such
interest receipts will comprise one element of the accounting profits of Top
LuxCo to which the PPL facility financing described, and treatment agreed, in
the letter of 28 September 2005 applies. Consequently, 5 % of the amounts
borrowed by TopLuxCo will be subject to corporate income tax and
municipal business tax in the hands of Top LuxCo. All other aspects of the
tax treatment outlined in the letter of 28 September 2005 will remain as set
out in that letter.

B.S Functional Currency

22 The accounts of Bottom LuxCo will be denominated in USD. It will have no

investments in territories using EUR. We hereby apply for the use of USO as
the functional currency of Bottom LuxCo.

23 The taxable profits of Bottom LuxCo, computed in USD, will be converted

into EUR at the year-end USD-EUR exchange rate.

24 A consequence of this treatment will be that during the life of the financing
structure and when the USO denominated PPL is repaid, no foreign exchange
gain or loss will be recorded in Bottom LuxCo accounts, and nor will any
foreign exchange gain or loss be taxable or deductible in the hands of Bottom
LuxCo.

(5)
We respectfully request that you confirm the tax treatment of the situation described above
or that you provide us with your remarks, if any.

We remain at your disposal should you need any further information, and would like to
thank you for the attention that you will give to our request.

Yours sincerely,

David Roach
lr (___:_ Y
Jorge Garcia Arregui
Partner Senior Manager

Appendix 1: Structure chart

Appendix 2: Further analysis of the tax regime applicable to the PPLs

Le prepose d bureau
d'impositio11 ocietes 6
Mariu Kohl

1 8 MARS 2009

711is tax agreement is based on the .facts as presented lo PricewaterhouseCoopers Sari as at the date Jhe advice was given. 711e
agreement is dependent on specific/acts and circumstances and may not be appropriale Lo any party o ther than the one/or which it was
prepared. 711is tax agreement wro prepared with only the interests d[ LaSalle Asia Opportunity Fund fl in mind, and was not planned or
carried out in contemplation ofany use by any other parly. PricewaterhouseCoopers Sari, its partners, employees and or agents. neither
owe nor accept any duty of care or any responsibility to any other party. whether in contract or in tort (including wilhout limitation.
negligence or breach ofstatuto1y duty) however arising, and shall not be liable in respect of any loss, damage or expense of whatever
nalure which is caused to any other party.

(6)
 fJR/cEWA1fRJ-1ousf(SDPERS I Appendix 1 : Lasalle Asia Opportunity Fund II

r·-· r·-·

PPL (95% of i
PPL (95% of :
I profits) 1 I
profits) L._.J Top LuxCo I
,.----~·~·_1 Top LuxCo 5%margm
5% margin I

I ·
I

r----- · I r ·
I I I
I
I
I
i PPLs (1004>
I
I 1
of profits)
I

SinCo I
I
I
I - · •• I I
I
Bottom
SinCo
I
I
I
I
l LuxCo
I
I I
I I
I I
I I
I I

-------------
I

YK (Japan)
I
I
YK
Common L---------------- (Japan)
shares Common
l Preferred shares Preferred
TMK shares - - Equity shares
(Japan) TMK
- TMK common stock (Japan)
Conventional debt
PPL
EXISTING STRUCTURE BANKRUPTCY REMOTE STRUCTURE

(7)
fR/cEWA1fRJ-1ousE[roPERS I
Appendix 2

FURTHER ANALYSIS OF THE TAX REGIME APPLICABLE TO

THE PPL

A Tax classification as debt

According to the commentaries to the income tax law (cmmnentaries

included in "Projet de Loi N° 571 (1955)") on the former article 114 LITL
(now article 97 LITL) on income from participation, where a profit
participating loan bears a minimum fixed interest rate, payable even when the
company is in a loss position, provided the principal amount of the loan is
repayable before the reimbursement of the company's share capital, the profit
participating loan should continue to be treated as a debt for Luxembourg tax
purposes.

2 Consequently, the PPL between Top LuxCo and Bottom LuxCo will be
qualified as debt for both net wealth tax purposes and for corporate income
tax purposes and interest thereon is deductible under the same conditions as
apply to fixed interest debt.

3 The participating interest will be dependent on the profit realised on specific

investment(s), before unrealised gains or losses, before Luxembourg tax and
variable interest charge, and after deduction of foreign exchange gains or
losses, any losses brought forward and of a margin computed on the adjusted
accounting profit, it will consequently be qualified as interest rather than
dividend.

B Classification as interest rather than dividend

4 Authors have examined the question whether the definition of "dividend"

given by the Luxembourg income tax law could includ!e payments accounted
for as interest. The key criteria for characterizing a payment as dividend
rather than interest are:

• Entitlement to the ongoing profit (including the profit reserves); and

• Entitlement to the liquidation proceeds.

5 Under this interpretation, the payment of an amount neither directly relating

to the entire profit of the borrower, nor to the liquidation proceeds, need not
be considered as a dividend.

6 For the PPL since the participating loan interest will be dependent on the
income realized before Luxembourg tax and variable interest, and not profit
after tax, the loan interest may be qualified as interest rather than dividend.

(8)
C Payment of remuneration free of Luxembourg dividend
withholding tax

7 Both article 146 (1)-3 and article 164 (2) LITL provide for the application of
a withholding tax upon payment of interest arising from participating bonds
or other similar securities. Interest payment may be subject to a 15%
withholding tax in Luxembourg if the followin g conditions apply:

• the loan is structured in the form of a bond or other similar security; and
• aside from the fixed interest, a supplementary interest varying according
to the amount of distributed profit is paid, unless the supplementary
interest is linked to a corresponding decrease in the fixed interest.

8 On the contrary, interest payments related to participating loans are not

subject to a specific withholding tax.

9 In the present case, the debt is structured as a profit participating loan facility
(and not as a profit participating bond), and the participating interest does not
depend on distributed profit. Consequently, no withholding tax will be due on
any interest paid on the PPL by Bottom LuxCo to Top LuxCo.

10 In addition, article 97 (1) 2 and 146 (1) 2 LITL provide for a withholding tax
when a profit participating return is paid to a silent partner ("bailleur de
fonds"). The PPL holders cannot be assimilated to silent partners within the
meaning of the above-mentioned provisions. Indeed, there is no common
interest/goal between the PPL holder and the borrowing company.

D Deductibility of the remuneration paid to PPL holders

11 100% of all interest paid on the PPL will in principle be tax deductible in
accordance with article 45 (1) LITL, unless article 45 (2) LITL (interest
expense in relation to exempt income, or other provisions of LITL, are
applicable).

(9)