Link Real Estate Investment Trust : Disposal of Properties

The Securities and Futures Commission of Hong Kong, 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.

Reference is made to the announcement of Link dated 28 October 2016 regarding its intention to dispose by tender of the Properties (viz. the (i) Cheung Hong Property; (ii) On Yam Property; (iii) Shek Wai Kok Property; (iv) Sui Wo Court Property; and (v) Sun Tin Wai Property). The tender closed at 12:00 noon on 15 December 2016.

On 16 December 2016, Link (through the Vendor) entered into the Accepted Tender Documents for the disposal of the Properties. Completion of the Disposals shall take place on 14 February 2017.

This announcement is made pursuant to 10.3 of the REIT Code. The Aggregate Consideration (being HK$3,635,718,880) for the Disposals (i) represents approximately 3.1% of the total market capitalisation of Link (based on the average closing price of the Units on the Stock Exchange for the five business days immediately preceding the date of this announcement); (ii) represents approximately 2.2% of the total assets of Link as at 30 September 2016 (as disclosed in the 2016/2017 Interim Report) after adjusting for the impact of the payment of interim distribution by Link on 2 December 2016; and (iii) is less than 15% of Link's gross asset value as at 30 September 2016 (as disclosed in the 2016/2017 Interim Report).

To the best knowledge, information and belief of the Directors (having made all reasonable enquiries), each of the Purchasers, Savills and DTZ (being the two sole agents appointed by the Manager for the purposes of the Disposals), CBRE (the former Principal Valuer of Link who was the independent valuer preparing the Valuation Reports), and their respective ultimate beneficial owner(s) is an Independent Third Party. Hence, none of the Disposals constitute a connected party transaction of Link under the REIT Code. The Manager is satisfied that no Unitholders' approval is required under the REIT Code for the Vendor to accept the Tender Documents submitted by the Purchasers and the respective transactions contemplated thereunder.

1. OVERVIEW

   Reference is made to the announcement of Link dated 28 October 2016 regarding its intention to dispose by tender of the Properties (viz. the (i) Cheung Hong Property; (ii) On Yam Property; (iii) Shek Wai Kok Property; (iv) Sui Wo Court Property; and (v) Sun Tin Wai Property). The tender closed at 12:00 noon on 15 December 2016.

   The Board of the Manager announces that on 16 December 2016, the Vendor (being Link Properties Limited, which is a SPV wholly-owned by Link) accepted the Tender Documents submitted by the Purchasers, which constituted binding agreements in respect of the sale and purchase of the Properties. Savills and DTZ, whom the Manager has been satisfied that they both have the requisite expertise and resources, were appointed as the sole agents for the disposal of the Properties by tender, and CBRE (the former Principal Valuer of Link who was the independent valuer preparing the Valuation Reports) was appointed to value each of the Properties for the purposes of the Disposals.

   To the best knowledge, information and belief of the Directors (having made all reasonable enquiries), each of the Purchasers, Savills, DTZ, CBRE, and their respective ultimate beneficial owner(s) is an Independent Third Party. Hence, none of the Disposals constitute a connected party transaction of Link under the REIT Code.

   Pursuant to the Tender Documents, the Vendor has expressly reserved its rights, among others, (a) to withdraw any Property for sale before acceptance of any tender and (b) not to accept the highest or any tender.

   Having considered the Appraised Value of each Property and with reference to recent commercial investment property transactions in Hong Kong, the Manager decided to accept the Tender Documents submitted by, and enter into the Accepted Tender Documents with, the Purchasers. The Consideration for each Property represents the highest price tendered for the purchase of the relevant Property. The Purchaser, the Consideration (as stated in the Accepted Tender Document) for the Disposal and the Appraised Value of each relevant Property are described below:

   Property		Purchaser	Consideration for the Disposal (HK$)	Appraised Value as at the Valuation Date (i.e. 30 September 2016) (HK$)	Valuation as at 31 March 2016 (HK$)
   1.	Cheung Hong Property	Billion Legacy Enterprises (H.K.) Limited	1,150,000,000	1,022,000,000	992,000,000
   2.	On Yam Property	Cai Gen Xiang Holdings Limited	562,800,000	399,000,000	394,000,000
   3.	Shek Wai Kok Property	East Square Holdings Limited	733,000,000	591,000,000	575,200,000
   4.	Sui Wo Court Property	Actmore Estate Limited	728,800,000	521,000,000	507,000,000
   5.	Sun Tin Wai Property	Ace Miracle Limited	461,118,880	284,500,000	274,800,000
   Total		3,635,718,880	2,817,500,000	2,743,000,000

2. SUMMARY OF KEY TERMS OF THE ACCEPTED TENDER DOCUMENTS

   Set out below is a summary of the key terms of the Accepted Tender Documents. Save for the identities of the Purchasers and the relevant Property and Consideration set out above, the terms and conditions of each Accepted Tender Document are substantially the same. There is no indemnity or guarantee given by the Vendor or the Manager in respect of the Properties, or any deferred payment or payment otherwise than by cash, in any of the Accepted Tender Documents.

   Acceptance Date :	16 December 2016
   Parties :	(i) Link Properties Limited (as the Vendor of the relevant Property); and
   (ii) the respective Purchaser (as purchaser) of the relevant Property.
   Terms of Payment :	(i) the Initial Deposit was paid by the Purchaser by way of cashier's order to the Vendor at the time when the Purchaser submitted the Tender Document;
   (ii) a further deposit equivalent to a sum of 10% of the Consideration less the Initial Deposit (the Initial Deposit and the further deposit shall, together, represent 10% of the Consideration) shall be paid by the Purchaser to the Vendor by way of cashier's order on 22 December 2016;
   (iii) the balance of the Consideration (being 90% of the Consideration) shall be paid by the Purchaser to the Vendor on the Completion Date; and
   (iv) if the Purchaser makes default in the payment of any money or any part thereof to be payable, transferred or refunded to the Vendor on the relevant due date(s) under the Accepted Tender Document, the Purchaser shall pay to the Vendor interest on the money or such part thereof as shall for the time being remain unpaid at the rate of 4% per annum over the best lending rate from time to time of The Hongkong and Shanghai Banking Corporation Limited from the date or respective date(s) when the money or any part thereof falls due or becomes payable until the date(s) of payment. Such payment of interest shall be in addition to and shall be without prejudice to any other rights and remedies which the Vendor may have against the Purchaser on account of the Purchaser's default in payment on the due date(s) under the Accepted Tender Document.
   Condition :	The Property is sold subject to and with the benefit of the Tenancies.
   Completion :	There is no condition precedent to the Completion of the Disposals, all of which shall take place on 14 February 2017.

   Termination :

   (i) If the Purchaser fails to observe or comply with any of the terms and conditions of the Accepted Tender Document, the Vendor may (without tendering an assignment to the Purchaser) terminate the Accepted Tender Document by giving notice of termination in writing to the Purchaser or its solicitors, and the Vendor is entitled to re-enter upon the Property and repossess the same if possession shall have been given to the Purchaser free from any right or interest of the Purchaser therein. The Initial Deposit and further deposit (if already paid by the Purchaser) shall be forfeited by the Vendor absolutely. Upon such determination, the Vendor may resell, let or otherwise deal with the relevant Property or any part(s) thereof either by public auction or by tender or by private contract or partly by one of such methods of sale and partly by another one or more of such methods of sale subject to such stipulations as the Vendor may think fit and any increase in price on resale shall belong to the Vendor. Without prejudice to the Vendor's right to recover the actual loss which may flow from the Purchaser's breach of the Accepted Tender Document, on such resale any deficiency in price shall be made good and all expenses attending such resale or any attempted resale shall be borne by the Purchaser and such deficiency and expenses shall be recoverable by the Vendor credit being given for any amount forfeited or retained as aforesaid.

   (ii) If the Vendor fails to complete the sale of the Property in accordance with the terms of the Accepted Tender Document, it shall not be necessary for the Purchaser to tender an assignment to the Vendor before taking legal proceedings to enforce specific performance of the Accepted Tender Document.

3. INFORMATION ON THE PROPERTIES

The Cheung Hong Property, completed in 1980, comprises principally a 5-storey commercial/car park building, a 4-storey retail building, a 3-storey car park building, a 3-storey car park/market/games area complex, a 2-storey restaurant block, various isolated cooked food stalls and shop units, and shops stalls and welfare units as well as open car parks and associated areas within Cheung Hong Estate, No. 12 Ching Hong Road, Tsing Yi, New Territories, Hong Kong, and is being held under Government lease for a term of 50 years from 10 September 2009.

The Appraised Value of the Cheung Hong Property at the Valuation Date was HK$1,022.0 million, and its occupancy at, respectively, 31 March 2016 and 30 September 2016 was 92.9% and 92.9%.