TheSecuritiesandFuturesCommissionofHongKong,HongKongExchangesandClearingLimited andTheStockExchangeofHongKongLimitedtakenoresponsibilityforthecontentsofthis
announcementm,
akenorepresentationastoitsaccuracyorcompletenessandexpresslydisclaimany
liabilitywhatsoevefroar nylosshowsoevear risingfromoirnrelianceuponthewholeoar nyparot tfhe contentsotfhisannouncement.
The Link Real Estate Investment Trust(acollectiveinvestmenst chemeauthorisedundesr ection104 otfheSecuritiesandFuturesOrdinance(Chapte5r 71otfheLawsoHf ongKong))
(stockcode8: 23)
ACQUISITIONOFPROPERTY
On18Augus2t 014T, heLinkREIT(throughthePurchaser)enteredintotheSPAwiththeVendor (awholly-ownedsubsidiaryofKerryPropertiesLimited)pursuanttowhichfortheConsideration (beingHK$1,380million),theVendoragreedtosell,andthePurchaseragreedtoacquire,the Property,subjectoandwiththebenefitoftheTenanciesbutotherwisefreefromencumbrances. ThePurchaserpaidadeposiot Hf K$138milliononenteringintotheSPAa, ndwilpl aythebalance
oHf K$1,242milliononCompletionwhichwiltlakeplaceon18Septembe2r 014.
Thisannouncementismadepursuantto10.3and10.4oftheREITCode.TheConsideration,
togetherwiththeExpenses,representsapproximately(a)1.51%ofthetotaml
arketcapitalisation
ofTheLinkREIT(basedontheaverageclosingpriceoftheUnitsontheStockExchangeforthe fivebusinessdaysimmediatelyprecedingthedateotfhisannouncementa; nd(b1) .35%otfhetotal
assetsoTf heLinkREIT(asdisclosedinthe2013/2014AnnuaRl
eporat fteradjustingforthefinal
distributionpaidbyTheLinkREITon3July2014andhavingtakenintoaccounthegainfromthe disposaol ffoupr ropertiesbyTheLinkREITasannouncedon20May2014).
TheConsideration,togetherwiththeExpenses,isalsolessthan15%ofthegrossassetvalueof
TheLinkREITasa3t 1March2014(asshowninthe2013/2014AnnuaRl eport).
TheManagerissatisfieda, nd(basedontheinformationandconfirmationgivenbytheManagerto theTrustee)t,heTrusteeisalsosatisfiedt,hant oUnitholdersa' pprovailsrequiredundertheREIT CodefotrhePurchasetroenteirntotheSPAandthetransactionscontemplatedthereunder.
TheManagerispleasedtoannouncethaTt heLinkREIT(throughthePurchaser)hasenteredintothe
SPAwiththeVendoirnrespecot tfheAcquisition.
1
KEYTERMSOFTHESPA
Date: 18Augus2t 014
Parties: (i) BethanCompanyLimitedastheVendora; nd
(ii) Link(LRM)Limited(aSpeciaPl urposeVehiclewhollyownedbyTheLink
REITa) sthePurchaser.
TothebestoftheDirectors'knowledge,informationandbelief,andhaving madealrl easonableenquiries,eachoftheVendor,KerryPropertiesLimited, andtheirespectiveultimatebeneficiaol wner(si)sanIndependenTt hirdParty.
Subjecot tfhe
Acquisition:
PursuanttothetermsotfheSPAt,hePurchasewr ilal cquirethePropertyfrom theVendors, ubjecttoandwiththebenefiot tfheTenanciesbuot therwisefree fromencumbrances.
UponCompletion,thePropertywillbehelddirectlybythePurchaser(as registeredownera) sfollows:
Trustee
HSBC Institutional Trust Services (Asia) Limited
100%
Manager
The Link Management Limited
100%
The Link Holdings Limited
100%
The Link
Properties Limited
The Link Finance
(Cayman)
2009 Limited
The Link Finance
(Cayman)
2006 Limited
The Link Finance Limited
100%
Metro Pilot
100%
Purchaser
178 existing properties(Note)
The Property
(Note:TheLinkPropertiesLimitedistheregisteredownerofexisting177properties andGreaLt and(HK)Limiteda,direcwt holly-ownedsubsidiaryoTf heLinkProperties
Limitedi,stheregisteredowneor tfheremaining1property.)
2
Consideration: TheConsideration(beingHK$1,380millioni)spayablebythePurchasetrothe
Vendori,ncasha, sfollows:
(i) adepositofHK$138million,representing10%oftheConsideration,was paidupontheenteringintooftheSPA,whichwillberefundedtothe PurchaseirtfheVendofrailstoproceedtoCompletiona; nd
(ii) thebalanceoHf K$1,242millionr,epresenting90%otfheConsiderationi,s payableonCompletion.
TheConsiderationrepresentsapproximatelya4.5%premiumtotheAppraised Value.TheConsiderationwasdetermineduponarm'slengthcommercial negotiationwiththeVendoar ftetrakingintoaccountthequalityotfheProperty andtheAppraisedValue.
Completion: Completionshaltlakeplaceon18September2014a, ndthereisnocondition precedenttoCompletion.
Othetrerms: T h eS P A contain sundertaking san dprovision si ncustomar yterm sfor transactionsotfhisnatureandscale.
THEPROPERTY
Generadl escription
Asathedateotfhisannouncementt,hePropertyisknownastheLionsRise
otfheProperty
Mal(l
).
Itcomprises(i)theCommercialDevelopment(otherthantheSignageAreas
andasdefinedintheDeedoMf
utuaCl ovenant)onthegroundfloorf,irsftloor
andsecondfloorotfheEstate(,ii)theSignageAreas(asdefinedintheDeed ofMutualCovenant),and(iii)privatecar-parkingspaces(Commercial)and
motorcycleparkingspaces(Commercial)b, eingrespectivelyN,
osR.
1toR55
andM1toM6onthebasementfloor,andalal ncillaryareas,spaces,plants, fixturesf,ittingsandfacilitiesthereast ervingtheaforesaidpremisesexclusively andtheVendor'sintereste, stateandrightstherein.
AccordingtotheValuationReport,thePropertyhasagrossfloorareaof approximately126,319squarefeet.
3
Tenancies BasedoninformationprovidedbytheVendora, sa3t 0July2014t,herewere
36tenanciesandapproximately30licencesattheProperty(approximately,
84%occupancy),deliveringamonthlyrentailncomeofapproximatelyHK$2.8 million(excludingmanagemenfteesbuitncludingcarparkincome)A. ccording totheValuationReport5, 3.4%otfheleases(bymonthlypassingrent)otfhe Propertywilel xpirebytheendo2f 015.
ThePropertyhasanexistingdiversifiedtenantbasecomprisingfashion, healthcar eproducts ,househol dgoods ,supermarket ,foodstuff ,beauty, servicesandvariousfoodandbeverageoutletsincludingChineserestaurants, specialtyrestaurantsandcafes.
TheEstate TheEstate(owf hichthePropertyformsparti)sknownasLionsRise( ),
8MukLunStreet,Kowloon,HongKong.Itconsistsofiveresidentiabl locks with968residentiaul nitsontopotfhePropertyT. heEstateandtheProperty werecompletedin2012.
GovernmenLt ease termandun-divided sharesotfhe
Property
ThePropertyisheldunderConditionsofSaleNo.20045dated31July2007 inrespecot Nf ewKowloonInlandLoNt o6. 309foratermo5f 0yearsfrom31
July2007.
UndertheDeedofMutuaCl
ovenant,atota1l 2,551/81,133rdequaul ndivided
sharesofandintheEstatehavebeenallocatedtothePropertyandsuch
12,551undividedsharesrepresen1t 00%otfheundividedsharesallocatedto theProperty.Theremaining68,582/81,133rdundividedsharesoftheEstate representtheundividedsharesallocatedtotheothepr ortionsotfheEstate.
AfterCompletion,theManagerwillhavefulloperationalcontroloverthe managemenitssuesotfheProperty.
Valuationof theProperty
Asat13August2014,theProperty,basedonitsexistinguse,hadan
AppraisedValueoHf K$1,320millionaccordingtotheValuationReport.
AccordingtotheValuationReportt,heIndependenPt ropertyValuerestimated
thatthePropertya, ssuming100%occupiedamt
arkertentw, ildl elivemr
onthly
income(excludingmanagementfeesandincludingcarparkincome)of approximatelyHK$4.7million.
Feesandcharges Nofeeocr hargeispayabletotheManagear saresulot tfheAcquisition.
NofeeorchargeispayabletotheTrusteeasaresulot tfheAcquisitiona, part fromtheTrustee'susuarlemunerationundetrheTrusDt eedwhichisbasedon apercentagepear nnumotfhePropertyValues(asdefinedintheTrusDt eed).
4
FINANCIALIMPACTANDFUNDINGOFTHEACQUISITION
TheConsideration,togetherwiththeExpenses,willbefundedfromTheLinkREIT'sowncash resourcesand/oer xistingdebftacilitiesT. heAcquisitionisnoet xpectedtohaveanymateriailmpacot n thefinanciapl ositionoTf heLinkREIT.
UponCompletionb, asedontheconsolidatedfinanciapl ositionoTf heLinkREITasa3t 1March2014
(asdisclosedinthe2013/2014AnnuaRl
eport),thepro-formaadjustedratioofdebtototaal ssetsof
TheLinkREITisanticipatedtochangefromapproximately11.0%toapproximately12.2%a, ssuming(i) adraw-downoHf K$1,508milliononTheLinkREIT'sexistingdebftacilities(;iia) nadjustmenttoinclude theAppraisedValueinthetotaal ssetsoTf heLinkREITasitfheAcquisitiontookplaceon31March
2014a; nd(iiih) avingtakenintoaccountthedisposaol ffoupr ropertiesbyTheLinkREITasannounced andcompletedr,espectivelyo, n20May2014and31July2014.
REASONSFORTHEACQUISITION
TheAcquisitionisconsistenwt iththeinvestmenpt olicyoTf heLinkREITandtheManager'sobjective
oaf ddingqualityincome-producingassetstogrowtheinvestmenrteturnsfortheUnitholdersT. heLink
REITintendstoholdthePropertyasalong-terminvestment.
TheManagebr elievesthatthePropertywilal ddvaluetoTheLinkREIT'sportfolioandthereispotential fofrurthegr rowthinrentailncomeandcapitavl alueotfhePropertyg, iven:
• iitsstrategicallylocatedwithinastrongcatchmenat reainEasKt owloonwithgoodpublictransport accessibility;
• iitsaqualitynewassect ompletedin2012withnosignificanct apitael xpenditureexpectedinthe immediatefuture;
• iht asthepotentiatlobenefiftromvariousupcomingresidentiadl evelopmentsintheWongTaSi in/
KaTi ak/EastKowloonareas,notablytheTaHi
omVillageprojectandthenewinfrastructureand
residential/commerciadl evelopmentsalongtheplannedShatintoCentraLl ink;
• thePropertyhasadiversifiedtrademixhavingpotentialtoachievefulloccupancyandcapture higher/up-markest pendingonsubsequenlteasecyclesa; nd
• thereareoperatingsynergieswithTheLinkREIT'sshoppingcentresandcar-parksinthevicinity. CONFIRMATIONBYTHEMANAGER TheManagerconfirmsthatduediligencehasbeencarriedoutinaccordancewiththerelevant
provisionsundertheREITCodeandtheManager'scompliancemanual.TheManagerissatisfied
thatTheLinkREIT(throughthePurchaser)wilhl oldgoodmarketablelegaal ndbeneficiatlitletothe
PropertyimmediatelyuponCompletion.
5
OPINIONOFTHEBOARD
TheBoard(includingtheindependennt on-executiveDirectorsi)ssatisfiedthattheAcquisitionpursuant totheSPAandthetransactionscontemplatedthereunderareatarm'slength,onnormacl ommercial termsa, ndarefaiar ndreasonableandintheinterestsoTf heLinkREITandtheUnitholdersasawhole. Further,theBoardissatisfiedthatnoUnitholdersa' pprovailsrequiredundertheREITCodeforthe PurchasetroenteirntotheSPAandthetransactionscontemplatedthereunder.
OPINIONOFTHETRUSTEE
BasedontheopinionoftheBoardandtheinformationandconfirmationgivenbytheManagertothe
Trusteet,heTrusteeissatisfiedthat:
(i) theAcquisitionisconsistentwithTheLinkREIT'sinvestmentpolicyandincompliancewiththe
REITCodeandtheTrusDt eeda; nd
(ii) noUnitholdersa' pprovailsrequiredundertheREITCodeforthePurchasertoenterintotheSPA
andthetransactionscontemplatedundetrheSPA.
IMPLICATIONSUNDERTHEREITCODE
Thisannouncemenitsmadepursuanto10.3and10.4otfheREITCodeT. heConsiderationt,ogether withtheExpensespayableinrespectoftheAcquisition,representsapproximately(a)1.51%ofthe
totaml
arketcapitalisationofTheLinkREIT(basedontheaverageclosingpriceoftheUnitsonthe
StockExchangeforthefivebusinessdaysimmediatelyprecedingthedateotfhisannouncementa; nd (b)1.35%ofthetotalassetsofTheLinkREIT(asdisclosedinthe2013/2014AnnualReportafter adjustingforthefinadl istributionpaidbyTheLinkREITon3July2014andhavingtakenintoaccount thegainfromthedisposaol fourpropertiesbyTheLinkREITasannouncedon20May2014).The Considerationt,ogetherwiththeExpensesi,salsolessthan15%otfhegrossassevt alueoTf heLink REITasa3t 1March2014(asshowninthe2013/2014AnnuaRl eport).
TothebestoftheDirectors' knowledge,informationandbelief,and havingmadeallreasonable enquiriese, achotfheVendorK, erryPropertiesLimitedandtheirespectiveultimatebeneficiaol wner(s) isanIndependentThirdParty.Therefore,theAcquisitiondoesnotconstituteaconnectedparty
transactionoTf heLinkREITundetrheREITCode.
TheManagerhasmadeasubmissionregardingtheNoteto7.5(d)otfheREITCodeinrelationtoThe
LinkREIT'sholdingofthePropertythroughmorethantwolayersofSpeciaPl
urposeVehiclesupon
Completionw,
hichhasbeenallowedbytheSFCsubjectotheconditionthatherewilbl enochange
tothemaximumnumberolfayersoSf peciaPl urposeVehiclesusedbyTheLinkREITforholdingthe
Propertywithoufturthear pprovaol tfheSFC.
TheManagewr ilml
akeafurthear nnouncemenut ponCompletionhavingtakenplace.
6
GENERAL
AboutthePurchasear ndTheLinkREIT
ThePurchaserisanewlyset-upSpecialPurposeVehicledirectlyandwhollyownedbyMetroPilot andindirectlyandwhollyownedbyTheLinkREITI.wt ilbl eusedsolelyforthepurposeohf oldingthe PropertyuponCompletion.Saveasaforesaid,thePurchasercurrentlyhasnootherbusinessactivity.
MetroPiloitsitselafnewlyset-upSpeciaPl urposeVehicleindirectlywhollyownedbyTheLinkREIT
whichisusedforinvestmenht oldingA. sathedateotfhisannouncementM, entireissuedcapitaol tfhePurchaser.
etroPiloht oldsonlythe
TheLinkREITisacollectiveinvestmenst chemeauthorisedbytheSFCandtheUnitsarelistedonthe
MainBoardotfheStockExchange(stockcode8: 23)H. SBCInstitutionaTl rusSt ervices(AsiaL) imitedis theTrusteeoTf heLinkREIT.
TheLinkREITm,
anagedbytheManagerc, urrentlyhasaportfolioconsistingo1f 78propertieswithan
internafllooar reaoaf pproximately10.9millionsquarefeeot rfetaisl paceandapproximately78,000car parkspaces.
AbouttheVendoar ndKerryPropertiesLimited
TheVendoristhecurrentregisteredownerofthePropertyandawholly-ownedsubsidiaryofKerry
PropertiesLimitedwhosesharesarelistedontheMainBoardotfheStockExchange(stockcode6: 83).
Kerr yPropertie sLimite di sprincipall yengagin gi n(i )propert ydevelopment ,investmen tand managemenitnHongKongT, hePeople'sRepublicoCf hinaandtheAsiaPacificregiona; nd(ii)hotel ownershipinHongKonga, ndhoteol wnershipandoperationsinThePeople'sRepublicoCf hina.
DEFINITIONS
Unlessthecontextotherwiserequires,capitalisedtermsusedinthisannouncementshallhavethe followingmeanings:
LinkREIT
Acquisition theacquisitionofthePropertybythePurchaserfromtheVendor pursuantothetermsoftheSPA,subjectoandwiththebenefitsof theTenanciesbuot therwisefreefromencumbrances AppraisedValue HK$1,320million,beingtheappraisedvalueofthePropertyasat
13Augus2t 014accordingtotheValuationReport
7
utuaCl
ovenanat ndManagemenAt greemenitnrespect
otfheEstateandthePropertywhichisregisteredintheLandRegistry byMemorialNo.12092002400020andre-registeredintheLand RegistrybyMemoriaNl o1. 4052202350018
beingCBRELimited,thecurrentPrincipalValuer(asdefinedinthe REITCode)ofTheLinkREITandanindependentpropertyvaluer (withinthemeaningofChapter6oftheREITCode)appointedfor valuingthePropertyfotrhepurposeotfheAcquisition
IndependenTt hirdParty anindependenthirdpartywhoisnotaconnectedperson(withinthe meaningoCf hapte8rotfheREITCodeo) Tf heLinkREIT Land allthatpieceorparcelofgroundregisteredintheLandRegistryasNewKowloonInlandLoNt o6. 309onwhichthePropertyissituated
Manager TheLinkManagemenLt imitedt,hemanageor Tf heLinkREIT MetroPilot Metr oPilo tLimited ,aSpecia lPurpos eVehicl eincorporate din theBritishVirginIslands,holdingtheentireissuedcapitalofthe Purchasera, ndwhollyownedbyTheLinkREIT8
Property thesubjectoftheAcquisitionandasdescribedunder"General descriptio no fth eProperty "i nth esectio nabov eheade d"THE PROPERTY" Purchaser Link(LRM)Limited,aSpecialPurposeVehicleincorporatedinHongKongandwhollyownedbyTheLinkREIT
REITCode theCodeonReaEl stateInvestmenTt rustspublisheda, ndasmaybe amendedosr upplementedfromtimetotimeb, ytheSFC SFC theSecuritiesandFuturesCommissionoHf ongKong SPA theagreemenftosr aleandpurchaseotfhePropertydated18Augus2t 014 betweentheVendoar ndthePurchaserF. urthedr escriptionotfheSPA appearsinthesectionaboveheaded"KEYTERMSOFTHESPA" SpeciaPl urposeVehicle aspecialpurposevehiclethatisownedandcontrolledbyTheLinkREITinaccordancewiththeREITCode;
StockExchange TheStockExchangeoHf ongKongLimited Tenancies theexistingtenanciesand(whereverapplicable)licencesinrespect ofthePropertyasdescribedunder"Tenancies"inthesectionabove headed"THEPROPERTY" TheLinkREIT TheLinkReaEl stateInvestmenTt rusta,collectiveinvestmenst cheme authorisedundersection104otfheSecuritiesandFuturesOrdinance (Chapte5r 71otfheLawsoHf ongKong) TrusDt eed thetrustdeeddated6September2005betweentheTrusteeandthe ManagerconstitutingTheLinkREIT,asamendedandsupplemented bytensupplementaldeedsdated4November2005,8November
2005,16January2006,21November2006,13July2007,23July
2007,5October2009,23July2010,25July2012,and18February
2014r,espectively
IndependenPt ropertyValuefrotrhepurposeotfheAcquisition
9
HongKongandtheexistingregisteredowneor tfheProperty
Byordeor tfheboardodf irectorsof
TheLinkManagemenLt imited
(asmanageroTf heLinkReaEl stateInvestmenTt rust) RickyCHANMingTak
CompanySecretary
HongKong1, 8Augus2t 014
Asatthedateotfhisannouncementt,heBoardotfheManagecr omprises: Chairman(alsoanIndependenNt on-ExecutiveDirector)
NicholasRoberSt ALLNOW-SMITH
ExecutiveDirectors
GeorgeKwokLungHONGCHOY (ChieEf xecutiveOfficer)
AndyCHEUNGLeeMing (ChieFf inanciaOl fficer)
Non-ExecutiveDirector
IanKeithGRIFFITHS
IndependenNt on-ExecutiveDirectors
WilliamCHANChakCheung EvaCHENGLKI amFun AnthonyCHOWWingKin MaySiewBoTi AN
PeteTr SEPakWing NancyTSESauLing DavidCharlesWATT RichardWONGYueChim
ElaineCaroleYOUNG
10
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