Yuexiu Property : ANNOUNCEMENT - (1) DISCLOSABLE ...

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 Hong Kong with limited liability)

1. DISCLOSABLE TRANSACTION IN RELATION TO THE DISPOSAL OF 67.0% OF A PROJECT COMPANY WHICH OWNS A COMMERCIAL PROPERTY IN WUHAN AND
2. FORMATION OF A JOINT VENTURE IN RELATION TO THE PROJECT COMPANY

The Company is pleased to announce that on 14 November 2017, the Vendor (as seller), the Purchaser (as purchaser) and the Company (as guarantor) entered into the Acquisition Deed, pursuant to which: (i) the Vendor agreed to sell, and the Purchaser agreed to purchase, 67.0% of the Wuhan Property (through the purchase of the Sale Shares representing the entire equity interest in Fully Cheer, which will (after the Reorganisation) indirectly hold 67.0% of Project Company, which is the registered legal owner of the land use rights and current ownership rights underlying the Wuhan Property); and (ii) the Vendor agreed to assign, and the Purchaser agreed to accept the assignment, of the Shareholder's Loan from the Vendor, with the rights attached to it as at the Completion Date.

The Wuhan Property comprises office, retail, commercial carpark spaces and residential carpark spaces and is a part of a larger integrated development project which also includes, among other things, a residential development known as "Starry Winking (星匯雲錦)" and its ancillary facilities.

The consideration for the sale of the Sale Shares and assignment of the Shareholder's Loan is the Agreed Disposal Amount, being RMB 2,280,606,300, subject to an adjustment to either: (a) add the amount of the Wuhan Disposal Group Adjusted NAV as at Completion (if it is a positive amount); or (b) subtract the absolute value of the amount of the Wuhan Disposal Group Adjusted NAV as at Completion (if it is a negative amount), in each case as set out in the Completion Statement. For illustrative purpose, based on the financial information of the Wuhan Disposal Group as at 30 June 2017 and assuming that the adjustments in respect of all the components set out in the definition of "Wuhan Disposal Group Adjusted NAV" below have been made, the Wuhan Disposal Group Adjusted NAV as at 30 June 2017 is approximately minus RMB364,486,700, and mostly attributable to the outstanding construction costs of the Project Company (being RMB732,191,000, 67.0% of which (being RMB490,567,970) would be taken into account in determining the Wuhan Disposal Group Adjusted NAV as a liability of the Project Company).

Following Completion, each member of the Wuhan Disposal Group will cease to be a subsidiary of the Company and their respective accounts will no longer be consolidated with those of the Company.

Upon completion of the Disposal, the Vendor Subsidiary and the Intermediary Company (being the JV Shareholders) shall enter into the Joint Venture Agreement in relation to the Project Company. As a result, the Vendor (through the Vendor Subsidiary) and the Purchaser (through the Intermediary Company) will own an effective 33.0% and 67.0% interest in the Project Company, respectively.

The Purchaser (as borrower) will, on Completion, enter into a facility letter in respect of the Vendor Facility with the Vendor (as lender). In the event that there is any shortfall in the funding required for payment of the Deferred Completion Payment, the Purchaser may draw down on the Vendor Facility to fund the shortfall if the REIT Manager considers that other financing options with terms and conditions to its satisfaction cannot be secured at the time the Deferred Completion Payment is made.

The Vendor Facility is a Hong Kong dollar denominated unsecured term loan facility up to an amount equivalent to RMB 814,700,000 (based on a five-day average of the RMB/HKD central parity rate as announced by the People's Bank of China at the relevant time), bearing interest at a margin of 1.3% per annum over HIBOR.

The Directors believe that the Disposal will bring the following benefits to the Shareholders:

1. the Development is a composite use development and is comprised of residential, commercial, office and office portions. All residential units (other than those which form part of the Excluded Property) and certain residential carparks in the Development have been sold. The proposed Disposal is in line with the Company's operating structure of "develop, operate and securitise", which would work to the mutual benefit of the Company and Yuexiu REIT. This Disposal further exemplifies the interactive model between the Company and Yuexiu REIT;

2. according to policy of the Central Government of the PRC, Wuhan is designated as a national central city of the PRC. Presently, Wuhan is the only

   1.5 tier city among the six provinces in central PRC and its economy is expected to benefit further from this policy. Situated in one of the new central business districts on the waterfront of Hankou District in Wuhan, the Wuhan Property will stand to enjoy the high growth potentials of Wuhan. The Disposal is to optimise the deployment of resources of the Group. After the Disposal, the Company can continue to enjoy the future growth potential of the Wuhan Property through its ownership in 33% of the equity interest in the Project Company as well as indirectly through its present approximate 35.303% interest in Yuexiu REIT;

3. through selling 67% interest in the Wuhan Property at market price, the Company can recoup the majority of its investment expended on the Wuhan Property, which would enhance the cash flow of the Company. Such enhanced cash flow is conducive to return of cash to the Company. Assuming that no material adjustments in respect of the Consideration will be required at Completion and nor to the amounts payable by the Vendor under the Support Arrangement, the Company is expected to record a gain (after taxation) of approximately RMB400 million, which comprises a gain on disposal of 67% equity interest in the Project Company and fair value gains on the remaining 33% equity interest held by the Group after re-measurement according to relevant accounting standards, thereby realising reasonable profits through the Disposal; and

4) the Disposal would be conducive to enhancing the turnover rate of the Company's projects.

As the highest applicable percentage ratio (as calculated in accordance with Rule

14.07 of the Listing Rules) in respect of the Disposal exceeds 5% but is lower than 25%, the Disposal constitutes a disclosable transaction of the Company under Chapter 14 of the Listing Rules.

The Company is pleased to announce that on 14 November 2017, the Vendor (as seller), the Purchaser (as purchaser) and the Company (as guarantor) entered into the Acquisition Deed, pursuant to which: (i) the Vendor agreed to sell, and the Purchaser agreed to purchase, 67.0% of the Wuhan Property (through the purchase of the Sale Shares representing the entire equity interest in Fully Cheer, which will (after the Reorganisation) indirectly hold 67.0% of Project Company, which is the registered legal owner of the land use rights and current ownership rights underlying the Wuhan Property); and (ii) the Vendor agreed to assign, and the Purchaser agreed to accept the assignment, of the Shareholder's Loan from the Vendor, with the rights attached to it as at the Completion Date. The consideration for the sale of the Sale Shares and assignment of the Shareholder's Loan is the Agreed Disposal Amount, subject to adjustments. The remaining 33.0% equity interest in Project Company will be retained by the Vendor (through the Vendor Subsidiary).

The Wuhan Property comprises office, retail, commercial carpark spaces and residential carpark spaces and is a part of a larger integrated development project (the "Development") which also includes, among other things, a residential development known as "Starry Winking (星匯雲錦)" and its ancillary facilities.

The principal terms of the Acquisition Deed are set out below:

14 November 2017

The Vendor (as seller), the Purchaser (as purchaser) and the Company (as guarantor).