Investor Update Q3 2006

Macau Property Opportunity Fund Ltd
04 October 2006


                   Macau Property Opportunities Fund Limited

                                Investor Update
                               Third Quarter 2006

Key Points

•    Strong & varied pipeline of opportunities
•    Seven sites under negotiation worth approximately £70 million
•    Niche, focused investment strategy maintained
•    Opening of first 'mega' casino Wynn Macau a success
•    Powerful macro-economic story remains intact


Fund Activity

Since the Company's admission to AIM on 5 June 2006, Sniper Capital Limited, the
Company's Investment Manager (the 'Manager'), has made excellent progress in
sourcing a strong and varied pipeline of acquisition opportunities, primarily
via its well-established local network, but also through an expanding range of
relationships with local developers and agents. To-date the Manager has assessed
over thirty five sites in wider Macau and a further ten in Zhuhai, with a
combined value of approximately £279 million. Of these, seven properties with a
combined acquisition value of approximately £70 million are at various stages of
negotiation.

Terms have been agreed in principle on two developments (one a redevelopment of
a prime central site for retail and entertainment use and the other a luxury
residential development, both in Macau) with a combined acquisition value of
approximately £43 million.  Final due diligence is now being undertaken on these
acquisitions.  Of the other five sites currently under negotiation, two are for
industrial use, two are residential developments (one luxury and one low-end)
all in Macau, and the other is a retail / commercial development in Zhuhai.
There is no guarantee that these potential opportunities will result in
investments being made, but the Manager is confident that a number will be
secured for the Company at attractive prices.

The Manager remains extremely cautious of the spate of middle-market residential
projects being developed predominantly in new areas and targeted at the
burgeoning expatriate population (Jones Lang La Salle predicts there will be
17,000 new expatriates by 2009). This opinion is predicated on the excessive
supply being experienced in this sector and the potential obsolescence of such
stock as newer and better designed projects reach completion. Consequently, the
Manager has declined numerous opportunities, which, if taken, would already have
resulted in full investment of the Company's equity.

The Manager maintains its view that residential demand will be driven primarily
by the local population as it continues to benefit from rising disposable income
levels and high savings rates. With Macau households spending an average of only
25% of their income on residential mortgages (versus almost 60% for Hong Kong),
there is substantial scope for them to upgrade on their existing accommodation.
The Manager therefore continues to focus on opportunities in established
neighbourhoods and communities.

The Manager is also in discussions with a number of international businesses
which are seeking to form a commercial presence in Macau, with a view to
developing purpose-built facilities for sale or long lease across a variety of
sectors. Such arrangements have the significant benefit of establishing
guaranteed investment exits via a pre-agreed sale or through securing a long
term leasing contract which substantially enhances the property's market value.

The Company's investment strategy is to remain focused on a mix of niche
developments and redevelopment opportunities, clearly differentiated by either
location or sustainability of future demand. These types of properties are
inherently more difficult to secure due to more complex due diligence processes
and often multiple ownership.  It is these investments, however, which the
Manager believes will ultimately generate superior returns for investors and
hence justify the lead times involved.


Market Overview


Gaming
The highlight of the quarter was the successful opening of Wynn Macau casino in
September. This is the first true western-style casino to be established in the
territory with 600 rooms, six gourmet restaurants, spa facilities and luxury
shopping facilities and marks the first of a series of 'mega' casinos to be
opened over the next three years.  In addition, the Sands Macau opened its
extension in August adding 64,000 sq ft of gaming space, making it the world's
largest casino with 740 gaming tables and 1,254 slot machines. The first casino
to operate under the Galaxy license, Galaxy Starworld, is scheduled to open by
year end, followed by the Crown Plaza and the Grand Lisboa.  The Las Vegas Sands
Macau flagship, the US$2.3bn, 3,000 room Venetian Macau topped-out in August and
is on schedule for a soft opening in 2Q 2007.


Residential market
The overall property market was relatively subdued during the quarter, with
activity in the primary and secondary residential markets remaining cautious.
Some slight appreciation in average prices was reported, despite transaction
volume declining 40% YoY. The outlook for the residential market remains
positive on the back of strong economic fundamentals, however, the Manager
remains extremely cautious of certain sub-sectors of this market as discussed
above.  Much of the anticipated demand for new residential projects has been
replaced by a 'wait and see' approach as more choices are presented by different
developers. Commentators forecast marketing campaigns for up to 6,000 units will
commence in the coming months.


Retail & Office market
The underlying fundamentals of these markets remain strong with retail sales up
20% YoY and average office transaction prices up 26% in the first six months of
2006. Despite this positive backdrop, the Manager believes it is important to
focus on quality of location and composition of demand to ensure a successful
project. As a result the manager remains extremely selective in the
opportunities it proposes for investment consideration by the Company.


Infrastructure
Macau infrastructure projects continue apace, with the Macau-Taipa tunnel
securing approval for construction which is due to commence in October, and work
reaching completion on a new border crossing with China.  It is understood that
the final routing for the Macau light rail project should be finalised soon. The
Manager believes this project is an important part of the overall public
infrastructure plan and will contribute greatly towards easing current traffic
congestion.


Economic Overview

The local economy continues to benefit from the booming gaming and tourism
industries. Real GDP grew by 16.3 per cent in Q2 2006, mainly driven by exports
of gaming services and tourism receipts. Gaming receipts and fixed capital
formation remained as the key drivers, with gaming receipts increasing by 11%YoY
in Q2 2006. Gross fixed capital formation grew by 60.1% YoY.

The employment situation remained largely favourable on the back of the buoyant
economy and the unemployment rate fell to 3.8 per cent in Q2 2006. The continued
strong demand for labour has resulted in sizeable pay rises across the job
market. The median monthly employment income in Q2 2006 rose by 13 per cent
compared with the same quarter of 2005, further improving the already high
housing affordability levels of the local population.


About the Macau Property Opportunities Fund

Macau Property Opportunities Fund Limited is a closed-end investment company
incorporated in Guernsey listed on the Alternative Investment Market of the
London Stock Exchange. The Company's investment policy is to provide
shareholders with an attractive total return, which is expected to comprise
primarily capital growth, but with the potential for dividends over the medium
to long term. The Company focuses on investing in property opportunities
primarily in Macau, but also potentially in the Western Pearl River Delta region
and in exceptional circumstances, greater China.


For further information:

Sniper Capital Management Limited
Tom Ashworth/Martin Tacon
Tel: [phone]
Email: [e-mail]

Collins Stewart Limited
Hugh Field
Tel: [phone]
Email: [e-mail]

Heritage International Fund Managers Limited
Mark Huntley/Laurence McNairn
Tel: [phone]
Email: [e-mail]


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Macau Property Opportunities Fund Limited is a Guernsey incorporated company
whose shares have been admitted to trading on AIM.




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