Link Real Estate Investment Trust : Discloseable Transaction - Completion of Strategic Review and 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. DISCLOSEABLE TRANSACTION COMPLETION OF STRATEGIC REVIEW AND DISPOSAL OF PROPERTIES

The Manager had completed the strategic review disclosed in Link's announcement dated 26 July 2017. The Board announces that on 28 November 2017, the Vendor (being a wholly-owned SPV of Link) has entered into the SPAs with the Property Purchasers and the Share Purchaser (all of which belong to the same group) under which, for HK$23,000,000,000 (being the Aggregate Consideration), the Vendor has agreed to dispose of:

• the (i) Cheung Hang Property; (ii) Kai Yip Property; (iii) Kam Tai Property; (iv) Lei Cheng Uk Property; (v) On Ting Property; (vi) Shek Lei Property; (vii) Tai Wo Hau Property; (viii) Tsz Ching Property; (ix) Yau Oi Property; (x) Yung Shing Property; (xi) Kwai Fong Property; (xii) Kwai Shing East Property; (xiii) Lai Kok Property; (xiv) Lee On Property; (xv) Shun Tin Property; and (xvi) Tsing Yi Property to the respective Property Purchasers pursuant to the Property SPAs; and

• the Target Group (through disposing of the Sale Share and the Sale Loans) to the Share Purchaser pursuant to the Share SPA. The Target Group is wholly-owned by Link and owns the Lions Rise Property.

  The Property Purchasers are special purpose vehicles incorporated in Hong Kong and the Share Purchaser is a special purpose vehicle incorporated in the British Virgin Islands. Each of the Property Purchasers and the Share Purchaser is a real estate investment company formed for the purpose of acquiring the relevant Property or the Target Group. To the best of the knowledge, information and belief (having made all reasonable enquiries) of, and basing on the information provided to, the Manager, each of the Purchasers is an Independent Third Party.

  The Aggregate Consideration represents a premium of approximately 51.7% over the aggregate Appraised Value of the Properties and the Lions Rise Property as at the Valuation Date (i.e. 30 September 2017) and a premium of approximately 58.7% over their aggregate valuations as at 31 March 2017.

  The Aggregate Consideration comprises the Properties Consideration and the consideration for the Target Group. The Properties Consideration will not be adjusted. The consideration for the Target Group will be adjusted, initially by the Pro-forma Adjusted NAV (which shall be the Initial Share Consideration) on Completion, and then by the Final Adjusted NAV after Completion upon determination of the combined net asset value of the Target Group as at the Completion Date (which will be reviewed by the Auditor) in the manner as specified in the Share SPA. If the Share Consideration after adjusting for the Final Adjusted NAV is greater than the Initial Share Consideration, the Share Purchaser shall pay the excess to the Vendor; but if it is less than the Initial Share Consideration, the Vendor shall pay the shortfall to the Share Purchaser.

  The Manager will publish an announcement on Completion of the Disposals and also when the Share Consideration after adjusting for the Final Adjusted NAV is finally determined.

  Pursuant to the terms of the SPAs:

• the Purchasers paid the Initial Deposits (totaling HK$850 million) on signing thereof and will pay the Further Deposits (totaling HK$1,450 million) within 5 business days from (and including) the date of the SPAs, which together equals 10% of the Aggregate Consideration;

• if any Purchaser fails to pay the Further Deposit required under a SPA, the Vendor is entitled to terminate all the SPAs and forfeit the Initial Deposits (as well as any Further Deposits, if already paid under any SPAs);

• Completion of the SPAs shall all take place on 28 February 2018 (or such other date as the Vendor and the relevant Purchaser may agree in writing); and

• if any Purchaser fails to complete any SPA, this will constitute a material breach (unless it is waived by the Vendor) and the Vendor is entitled to terminate all the SPAs and forfeit the Deposits paid under all the SPAs without prejudice to the Vendor's other rights and remedies. Similarly, if the Vendor fails to complete any SPA, this will constitute a material breach of all the SPAs whereupon the Vendor shall return the Deposits to the Purchasers without prejudice to the Purchasers' other rights and remedies.

Subject to Completion, it is estimated that the net gain from the Disposals will be approximately HK$7,393 million (after taking into account, among others, the Expenses but before the Final Adjusted NAV).

This announcement is made pursuant to 10.3 of the REIT Code. The Aggregate Consideration (being HK$23,000,000,000) for the Disposals (i) represents approximately 15.2% 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 12.2% of the total assets of Link as at 30 September 2017 (as disclosed in the 2017/2018 Interim Report) after adjusting for the impact of the interim distribution payable by Link on 1 December 2017; and (iii) is less than 15% of Link's gross asset value as at 30 September 2017 (as disclosed in the 2017/2018 Interim Report). As the aforesaid percentage ratios are both above 5%, the Disposals constitute a discloseable transaction under Chapter 14 of the Listing Rules as if the relevant requirements were applicable to Link.

The Manager appointed HSBC and UBS as its financial advisors and C&W as its real estate advisor for the purposes of the strategic review and the Disposals. Please refer to Section VII. "Regulatory Implications" below for further details.

The Manager is satisfied that no Unitholders' approval is required under the REIT Code for the Vendor to enter into the Property SPAs, the Share SPA, and the respective transactions contemplated thereunder.

SECTION I. OVERVIEW

Reference is made to the announcement of Link dated 26 July 2017 regarding a strategic review of Link's portfolio. The Manager reviewed various growth options under the strategic review having had reference to leading property companies and international peers and views of market practitioners. The Manager concluded that the Disposals are in line with Link's strategic objectives and current growth trajectory.

The Manager appointed HSBC and UBS as its financial advisors and C&W as its real estate advisor for the purposes of the strategic review and the Disposals (having been satisfied that they have the requisite expertise and resources). The Manager also appointed the Principal Valuer to value each of the Properties and the Lions Rise Property for the purposes of the Disposals.

SECTION II. DISPOSAL OF THE PROPERTIEs AND THE TARGET GROUP

The Board announces that on 28 November 2017, the Vendor has agreed to dispose of the Properties and the Target Group for the Aggregate Consideration of HK$23,000,000,000. None of the Properties or the Lions Rise Property was acquired in the two-year period prior to the date of the relevant SPA. Each Disposal comprises the Vendor's entire interest in the relevant Property or in the entire issued share capital of the Target Group. The Disposals are on a portfolio basis.

1. DISPOSAL OF THE PROPERTIES

   The Vendor is the sole registered owner of each of the Properties. The Properties are all sold subject to the Tenancies. They will be assigned to each of the Property Purchasers in accordance with the terms of the Property SPAs on Completion.

   In arriving at its decision to dispose of the Properties, the Board took into account the aggregate Appraised Value of the Properties as at the Valuation Date (i.e. 30 September 2017) and the premium over the aggregate Appraised Value by the Properties Consideration. The respective Appraised Value was arrived at by the Principal Valuer having also had reference to recent commercial investment property transactions in Hong Kong.

   SUMMARY OF THE PROPERTIES, THE PROPERTY PURCHASERS, THE PROPERTY SPAs, THE PROPERTIES CONSIDERATION, AND THE RESPECTIVE APPRAISED VALUE OF THE PROPERTIES

   Column (I)	Column (II)	Column (III)	Column (IV)	Column (V)	Column (VI)
   Property	Property Purchaser	Property SPA	Property Consideration	Appraised Value of the Property as at the Valuation Date (i.e. 30 September 2017)	Valuation of the Property as at 31 March 2017
   (HK$'M)	(HK$'M)	(HK$'M)
   1. Cheung Hang Property	Modern Diamond Limited	Cheung Hang SPA	918.022	576.5	553.5
   2. Kai Yip Property	New Try Limited	Kai Yip SPA	1,010.016	636.3	616.5
   3. Kam Tai Property	Jumble Succeed Limited	Kam Tai SPA	1,351.160	840.4	819.8
   4. Lei Cheng Uk Property	Praise Creator Limited	Lei Cheng Uk SPA	822.195	573.8	545.5
   5. On Ting Property	Delong Limited	On Ting SPA	2,708.165	1,626.4	1,556.0
   6. Shek Lei Property	Global Stream Limited	Shek Lei SPA	2,439.467	1,602.1	1,527.0
   7. Tai Wo Hau Property	Glory Basic Limited	Tai Wo Hau SPA	1,467.590	902.7	851.1
   8. Tsz Ching Property	Long Coast Limited	Tsz Ching SPA	1,146.090	683.8	646.5

   9. Yau Oi Property	Best Regain Limited	Yau Oi SPA	2,361.368	1,426.1	1,337.9
   10. Yung Shing Property	Luxury Gain Limited	Yung Shing SPA	858.609	658.7	619.1
   11. Kwai Fong Property	Ray Glory Limited	Kwai Fong SPA	1,481.293	962.7	907.8
   12. Kwai Shing East Property	Sino Phil Limited	Kwai Shing East SPA	1,354.322	922.2	888.8
   13. Lai Kok Property	Prime Space Limited	Lai Kok SPA	607.543	434.3	408.0
   14. Lee On Property	Summer Blaze Limited	Lee On SPA	1,268.749	816.2	773.5
   15. Shun Tin Property	Supreme Cosmo Limited	Shun Tin SPA	972.643	600.4	574.1
   16. Tsing Yi Property	Sure Rainbow Limited	Tsing Yi SPA	962.103	570.2	546.8

2. DISPOSAL OF THE TARGET GROUP

The Target Group comprises Metro Pilot and LLRM. LLRM is the sole registered owner of the Lions Rise Property. There are existing Tenancies at the Lions Rise Property.

LLRM is a wholly-owned subsidiary of Metro Pilot. The Sale Share represents the entire issued share capital of Metro Pilot and is held by the Vendor. The Sale Loans represent amounts owing by Metro Pilot and LLRM to the Vendor. The Sale Share and the Sale Loans will be transferred and assigned to the Share Purchaser on Completion in accordance with the terms of the Share SPA.

The Share Consideration is the Lions Rise Agreed Value as adjusted for the Final Adjusted NAV of the Target Group. In arriving at its decision to dispose of the Target Group, the Board took into account the Appraised Value of the Lions Rise Property which was HK$1,332.1 million as at the Valuation Date (i.e. 30 September 2017) and HK$1,320.2 million as at 31 March 2017. The Principal Valuer arrived at the Appraised Value of the Lions Rise Property having also had reference to recent commercial investment property transactions in Hong Kong.

SECTION III. SUMMARY OF KEY TERMS OF THE SPAS

The Vendor has entered into 16 Property SPAs with the 16 Property Purchasers, and the Share SPA with the Share Purchaser (all of which belong to the same group and are Independent Third Parties).

The sale and purchase of a Property under a Property SPA or the Target Group under the Share SPA is part and parcel of the sale and purchase of the other Properties and the Target Group under the other SPAs. The SPAs are inter-conditional to each other and are to be completed all on 28 February 2018 (or such other date as the Vendor and the relevant Purchaser may agree in writing).