Shimao Property : Discloseable Transactions - Intra-Group Transfers

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(Incorporated in the Cayman Islands with limited liability)

Reference is made to the Announcement in relation to the Issue Proposal and the Transfer Transactions.

As disclosed in the Announcement, each of the Issue Proposal and completion of the Transfer Transactions is conditional upon, among other matters, the Issue Proposal having obtained the approval from the CSRC. As the approval for the application of the Issue Proposal has yet to be obtained from the CSRC as at the date of this announcement, on 11 October 2016, Shanghai Shimao entered into the Equity Transfer Agreements to substitute the Qianhai Shimao Agreements, the Nanchang Shuicheng Agreement and the Hangzhou Shimao Agreement respectively for the furtherance of the Equity Transfer Transactions as originally contemplated, utilising internal financial resources. Accordingly, the Issue Proposal and the Transfer Transactions will not proceed.

On 29 August 2016, Hongsheng Investment (a non wholly-owned subsidiary owned as to 95% by the Company) entered into the Shanghai Qianshe Agreement with Xingxi Investment (another non wholly-owned subsidiary owned as to 58.92% by the Company), pursuant to which Hongsheng Investment agreed to sell, and Xingxi Investment agreed to acquire, the entire equity interests in Shanghai Qianshe.

As one of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the Equity Transfer Transactions (on an aggregated basis as if they were one transaction) exceeds 5% but is less than 25%, the Equity Transfer Transactions constitute discloseable transactions for the Company and are subject to reporting and announcement requirements under Chapter 14 of the Listing Rules.

The Shanghai Qianshe Transfer, on a stand-alone basis, does not constitute a notification transaction on the basis that none of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) exceeds 5%. The Shanghai Qianshe Transfer, when aggregated with the Equity Transfer Transactions, constitute discloseable transactions for the Company and are subject to reporting and announcement requirements under Chapter 14 of the Listing Rules.

Reference is made to the Announcement in relation to the Issue Proposal and the Transfer Transactions. Capitalised terms used herein shall have the same meanings as those defined in the Announcement unless defined herein otherwise.

As disclosed in the Announcement, each of the Issue Proposal and completion of the Transfer Transactions is conditional upon, among other matters, the Issue Proposal having obtained the approval from the CSRC. As the approval for the application of the Issue Proposal has yet to be obtained from the CSRC as at the date of this announcement, on 11 October 2016, Shanghai Shimao entered into the Equity Transfer Agreements to substitute the Qianhai Shimao Agreements, the Nanchang Shuicheng Agreement and the Hangzhou Shimao Agreement respectively for the furtherance of the Equity Transfer Transactions as originally contemplated, utilising internal financial resources. Accordingly, the Issue Proposal and the Transfer Transactions will not proceed.

Principal terms of each of the Equity Transfer Agreements are set out below:

1. THE NEW QIANHAI SHIMAO AGREEMENT

   Date

   11 October 2016

   Parties

2. Shanghai Shimao (as purchaser); and

3. Shimao Jianshe (as vendor).

Subject Matter

Shanghai Shimao has conditionally agreed to acquire, and Shimao Jianshe has conditionally agreed to sell, 51% equity interests in Qianhai Shimao.

QH Consideration

The QH Consideration is RMB2,452,058,500 which shall be paid by Shanghai Shimao in cash in the following manner:

1. approximately RMB490,411,700, representing 20% of the QH Consideration, shall be payable within 30 days from the effective date of the New Qianhai Shimao Agreement; and

2. approximately RMB1,961,646,800, representing 80% of the QH consideration, shall be payable within one year from the QH Completion Date.

The QH Consideration was arrived at arm's length negotiation between the parties on normal commercial terms on basis of the appraisal report issued by an independent valuer. The QH Consideration will be funded by the Group's internal resources.

Conditions Precedent

The New Qianhai Shimao Agreement shall be effective upon the satisfaction of all of the following conditions:

1. the board and the general meeting of Shanghai Shimao having approved the New Qianhai Shimao Agreement and the relevant matters contemplated thereunder;

2. the controlling shareholders of Shimao Jianshe having approved the New Qianhai Shimao Agreement and the relevant matters contemplated thereunder in accordance with the applicable laws; and

3. if necessary, the transactions contemplated under the New Qianhai Shimao Agreement having obtained the relevant approval from, or completed the relevant registration with, the foreign investment departmental authorities.

Completion

Upon satisfaction of all of the conditions precedent above, completion of the New Qianhai Shimao Agreement shall take place on the QH Completion Date.

Upon completion of the New Qianhai Shimao Agreement, Shanghai Shimao will be directly interested in 51% equity interests in Qianhai Shimao. Qianhai Shimao will remain as a subsidiary of the Company and will be consolidated in the accounts of the Company.

4. THE NEW NANCHANG SHUICHENG AGREEMENT

   Date

   11 October 2016

   Parties

5. Shanghai Shimao (as purchaser);

6. Shimao Jianshe (as one of the vendors); and

7. Shanghai Shiying (as one of the vendors).

Subject Matter

Shanghai Shimao has conditionally agreed to acquire, and Shimao Jianshe and Shanghai Shiying have conditionally agreed to sell, 100% equity interests in Nanchang Shuicheng.

NC Consideration

The NC Consideration is RMB670,620,600 which shall be paid by Shanghai Shimao in cash in the following manner:

1. approximately RMB134,124,100, representing 20% of the NC Consideration, shall be payable within 30 days from the effective date of the New Nanchang Shuicheng Agreement; and

2. approximately RMB536,496,500, representing 80% of the NC Consideration, shall be payable within one year from the NC Completion Date.

The NC Consideration was arrived at arm's length negotiation between the parties on normal commercial terms on basis of the appraisal report issued by an independent valuer. The NC Consideration will be funded by the Group's internal resources.

Conditions Precedent

The New Nanchang Shuicheng Agreement shall be effective upon the satisfaction of all of the following conditions:

1. the board and the general meeting of Shanghai Shimao having approved the New Nanchang Shuicheng Agreement and the relevant matters contemplated thereunder; and

2. each of the controlling shareholders of Shimao Jianshe and Shanghai Shiying having approved the New Nanchang Shuicheng Agreement and the relevant matters contemplated thereunder in accordance with the applicable laws.

Completion

Upon satisfaction of all of the conditions precedent above, completion of the New Nanchang Shuicheng Agreement shall take place on the NC Completion Date.

Upon completion of the New Nanchang Shuicheng Agreement, Shanghai Shimao will be directly interested in 100% equity interests in Nanchang Shuicheng. Nanchang Shuicheng will remain as a subsidiary of the Company and will be consolidated in the accounts of the Company.

8. THE NEW HANGZHOU SHIMAO AGREEMENT

Date

11 October 2016