Hui Xian Real Estate Investment Trust : PAYMENT OF BASE FEE AND VARIABLE FEE TO THE MANAGER BY WAY OF UNITS IN HUI XIAN REAL ESTATE INVESTMENT TRUST AND CASH

The Securities and Futures Commission of Hong Kong, Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company 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.

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any Units.

(a Hong Kong collective investment scheme authorised under section 104 of the Securities and Futures Ordinance

(Chapter 571 of the Laws of Hong Kong))

(Stock Code: 87001)

Reference is made to the announcement issued by the Manager dated 6 January 2017 in relation to the Manager's election that the Base Fee and the Variable Fee for the year ending 31 December 2017 shall be paid to the Manager in the form of cash as to 30% and in the form of Units as to 70%.

The Board announces that the Manager received: (a) payment of the Base Fee in the amount of RMB60,611,927.67, of which RMB42,428,349.37 was paid in the form of Units by way of 13,775,438 Units issued to the Manager on 25 August 2017, and RMB18,183,578.30 was paid in the form of cash; and (b) payment of the Variable Fee in the amount of RMB22,085,562.04, of which RMB15,459,893.43 was paid in the form of Units by way of 5,019,445 Units issued to the Manager on 25 August 2017, and RMB6,625,668.61 was paid in the form of cash. The fees were paid to the Manager for the period from 1 January 2017 to 30 June 2017. The aggregate number of 18,794,883 Units so issued to the Manager represent approximately 0.34% of the total number of 5,542,288,213 Units in issue immediately after the Issue.

The Manager did not hold any Units immediately before the Issue. Immediately after the issue of the 18,794,883 Units to the Manager under the Issue, the Manager holds 18,794,883 Units, representing approximately 0.34% of the 5,542,288,213 Units in issue immediately after the Issue.

In accordance with the Trust Deed, the number of Units issued as mentioned above as payment of part of the Base Fee and the number of Units issued as mentioned above as payment of part of the Variable Fee to the Manager shall be such number of Units as may be purchased for the relevant amount of the Base Fee and the relevant amount of the Variable Fee (as the case may be) at the price of RMB3.08 per Unit (being the prevailing Market Price (as defined in the Trust Deed) at the time of the issue of such Units), rounded down to the nearest whole number. The above issue of Units to the Manager is provided for in the Trust Deed and such issue does not require Unitholders' approval pursuant to a waiver granted by the SFC.

Pursuant to the Trust Deed, an adjustment amount of RMB1,188,246.57 is also refundable in cash by the Manager to Hui Xian REIT in respect of the adjustment of the Base Fee for the 2016 Financial Year.

Pursuant to the Trust Deed, the Manager is entitled to receive:

1. the base fee (the "Base Fee") of 0.3% per annum of the Property Values (as defined in the Trust Deed) at the relevant time; and

2. the variable fee (the "Variable Fee") which is an annual amount equal to 3% per annum of the net property income of each real estate of Hui Xian REIT for that financial year (before deduction therefrom of the Variable Fee and, where the Property Manager is a subsidiary of the Manager, the Property Manager's Fee) ("NPI") in respect of each real estate of Hui Xian REIT for each financial year (the "3% Rate"). In respect of each real estate of Hui Xian REIT, for so long as the Property Manager is a wholly-owned subsidiary of the Manager, the Manager may elect at any time and from time to time, with effect from the date on which the Property Manager is appointed or the date of such election by the Manager, whichever is later, that the 3% Rate be split between the Manager and the Property Manager, in such proportion as the Manager in its sole discretion deems fit, into 2 portions comprising a variable fee payable to the Manager, and a Property Manager's Fee payable to the Property Manager.

As mentioned in the announcement of Hui Xian REIT dated 22 June 2017, pursuant to clause 14.1.2(i)(b) of the Trust Deed, the Manager had elected that with effect from 1 July 2017, the 3% Rate in respect of Beijing Oriental Plaza be split into 2 portions comprising a variable fee payable to the Manager which is equal to 1% per annum of NPI, and a Property Manager's Fee payable to the Property Manager which is equal to 2% per annum of NPI.

The Base Fee and the Variable Fee are payable in arrears after each half-yearly period of each financial year. Pursuant to the Trust Deed, the Manager may elect, annually on or before 15 January of each financial year, to receive the Base Fee and the Variable Fee in the form of cash and/or in the form of Units in respect of that financial year. Reference is made to the announcement issued by the Manager dated 6 January 2017 in relation to the Manager's election that the Base Fee and the Variable Fee for the year ending 31 December 2017 shall be paid to the Manager in the form of cash as to 30% and in the form of Units as to 70%.

For the purpose of calculating the Variable Fee, the aggregate net property income of all real estate of Hui Xian REIT for the period from 1 January 2017 to 30 June 2017 amounted to approximately RMB1,073 million.

The Board announces that the Manager received: (a) payment of the Base Fee in the amount of RMB60,611,927.67, of which RMB42,428,349.37 was paid in the form of Units by way of 13,775,438 Units issued to the Manager on 25 August 2017, and RMB18,183,578.30 was paid in the form of cash; and (b) payment of the Variable Fee in the amount of RMB22,085,562.04, of which RMB15,459,893.43 was paid in the form of Units by way of 5,019,445 Units issued to the Manager on 25 August 2017, and RMB6,625,668.61 was paid in the form of cash. The fees were paid to the Manager for the period from 1 January 2017 to 30 June 2017. The aggregate number of 18,794,883 Units so issued to the Manager represents approximately 0.34% of the total number of 5,542,288,213 Units in issue immediately after the Issue (as hereinafter defined).

In accordance with the Trust Deed, the number of Units issued as mentioned above as payment of part of the Base Fee and the number of Units issued as mentioned above as payment of part of the Variable Fee to the Manager (the "Issue") shall be such number of Units as may be purchased for the relevant amount of the Base Fee and the relevant amount of the Variable Fee (as the case may be) at the price of RMB3.08 per Unit (being the prevailing Market Price (as defined in the Trust Deed) at the time of the issue of such Units), rounded down to the nearest whole number. The Market Price shall be, according to the Trust Deed, the volume weighted average price for a Unit for all trades in Units on The Stock Exchange of Hong Kong Limited for the period of 10 trading days immediately preceding the date on which the relevant Units were issued to the Manager. The number of Units under the Issue was determined on a basis which is consistent with the relevant provisions of the Trust Deed.

The issue of 18,794,883 Units in aggregate as payment of part of the Base Fee and part of the Variable Fee to the Manager is provided for in the Trust Deed and pursuant to a waiver granted by the SFC as disclosed in the offering circular (the "Offering Circular") dated 11 April 2011 issued in connection with the initial public offering and listing of Units (the "Waiver"). The Issue does not require approval of the Unitholders and does not require a valuation of the real estate held under Hui Xian REIT.

As mentioned in the Offering Circular, the Waiver was granted on the conditions, among others, that the number of Units issued to the Manager by way of payment of the Base Fee and Variable Fee for each financial year will be counted as part of the 20% (or such lower percentage as permitted by the REIT Code from time to time) of the outstanding Units that the Manager may issue in each financial year without Unitholders' approval pursuant to paragraph 12.2 of the REIT Code, and that the maximum number of Units to be so issued in respect of each financial year shall be limited to such number of Units as represents 3% of the total number of Units outstanding as at the last day of the immediately preceding financial year plus the number of Units issued in the relevant financial year for the purposes of financing any acquisition of real estate by Hui Xian REIT. Accordingly, the Issue will be counted as part of the 20% of outstanding Units that the Manager may issue in the financial year ending 31 December 2017 without Unitholders' approval pursuant to paragraph 12.2 of the REIT Code.

The 18,794,883 Units, being the total number of Units issued to the Manager so far as payment of the Manager's fees in respect of the financial year ending 31 December 2017, represent less than 3% of the Units outstanding as at 31 December 2016 (being the last day of the financial year immediately preceding the financial year in respect of which the payment of the Manager's fees were made). For the period from 1 January 2017 to the date of this announcement, no Units were issued for the purposes of financing any acquisition of real estate by Hui Xian REIT.

The Manager did not hold any Units immediately before the Issue. Immediately after the issue of the 18,794,883 Units to the Manager under the Issue, the Manager holds 18,794,883 Units, representing approximately 0.34% of the 5,542,288,213 Units in issue immediately after the Issue.

Pursuant to the Trust Deed, an adjustment amount of RMB1,188,246.57 is refundable in cash by the Manager to Hui Xian REIT in respect of the adjustment of the Base Fee for the 2016 Financial Year. Such adjustment amount represents the difference between (i) the total amount of the Base Fee payable to the Manager in respect of the 2016 Financial Year calculated based on the published audited financial statements of Hui Xian REIT for the 2016 Financial Year, and (ii) the total amount of the Base Fee already paid to the Manager in respect of the 2016 Financial Year. Such adjustment to the Manager's Base Fee for the 2016 Financial Year is consistent with the relevant provisions of the Trust Deed.

No adjustment amount is payable to or by the Manager in respect of the Variable Fee for the 2016 Financial Year.