Announcement - (1) major and connected party transactions relating to (a) disposal of 50% interest in yuexiu financial tower to a connected person; and (b) internal reorganisation; (2) refinancing with new bank facility; (3) appointment of independent financial adviser; and (4) egm and closure of register of unitholders

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

(a Hong Kong collective investment scheme authorised under section 104 of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong))

1. MAJOR AND CONNECTED PARTY TRANSACTIONS RELATING TO
   1. DISPOSAL OF 50% INTEREST IN YUEXIU FINANCIAL TOWER TO A CONNECTED PERSON; AND
   2. INTERNAL REORGANISATION;
2. REFINANCING WITH NEW BANK FACILITY;
3. APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER; AND
4. EGM AND CLOSURE OF REGISTER OF UNITHOLDERS

On 8 September 2025, the Transferors (being wholly-owned special purpose vehicles of Yuexiu REIT, as transferors), the External Transferee (being a connected person of Yuexiu REIT, as transferee), and the Internal Reorganisation Party (being a non-wholly-owned subsidiary of Yuexiu REIT, as transferee) entered into the Equity Transfer Agreement for: (1) the Disposal; and (2) the Internal Reorganisation relating to the equity interests in the Target Companies.

The Target Companies are the registered legal owners of the land use rights and current ownership rights underlying the Property known as "Yuexiu Financial Tower (越秀金融大廈)", which was acquired by Yuexiu REIT in 2021.

Under the Equity Transfer Agreement, the parties have agreed that: (1) the Disposal shall be effected by the Limited Liability Partnership (as transferor) transferring 50% of the equity interests in the Target Companies to the External Transferee (as transferee), and (2) thereafter, the Internal Reorganisation shall be effected by the Transferors (as transferors) transferring the remaining 50% equity interests in the Target Companies to the Internal Reorganisation Party (as transferee). Completion of the Disposal and the Internal Reorganisation is subject to Independent Unitholders' approval for the Transaction Matters Requiring Approval being obtained at the EGM.

The Share Consideration payable by the External Transferee and the Internal Reorganisation Party for the transfer of the equity interests in the Target Companies under the Disposal and the Internal Reorganisation shall equal: (i) the Target Companies Fair Value (being RMB3,682,124,000 based on the Reference NAV); (ii) minus the Agreed Discount (being RMB249,000,000), subject to adjustments to reflect the difference between the Reference NAV and the Completion NAV. The Share Consideration based on the Reference NAV shall be RMB3,433,124,000. The Agreed Discount, which represents the difference between the Appraised Value (being RMB8,049 million) and the value which the Manager and the External Transferee have agreed to be attributed to the Property (being RMB7,800 million), was determined based on arm's length negotiations. Considering the Agreed Discount represents approximately 3.1% of the Appraised Value, which is close to those of comparable transactions, the Board (including the INEDs) considers the Agreed Discount is fair and reasonable and in the best interests of Yuexiu REIT and its Unitholders as a whole.

Following completion of the Disposal and the Internal Reorganisation, Yuexiu REIT's effective beneficial interest in the Target Companies and the Property will be reduced to 49.495%, and the Target Companies will cease to be subsidiaries of Yuexiu REIT. As Yuexiu REIT will no longer have majority ownership and control of the Property through the Target Companies, the Property will be regarded as a "Minority-owned Property" of Yuexiu REIT under 7.7B of the REIT Code. The Manager has applied for, and the SFC has granted, approval for the Property to be regarded as a "Qualified Minority-owned Property" under 7.7C of the REIT Code, subject to the entry into of the Joint Venture Agreement.

To refinance some of the existing indebtedness of Yuexiu REIT, on 29 August 2025, the Target Companies obtained a commitment letter issued by a lending bank which is an Independent Third Party for an RMB-denominated New Bank Facility in the principal amount of up to RMB4,000 million. The New Bank Facility will bear an interest at a margin of 0.65% per annum below the 5-year loan prime rate as announced by the People's Bank of China, and will mature and become payable 15 years from the date of its first drawdown. For illustrative purposes, the 5-year loan prime rate as at the date of this announcement was 3.5%, which was announced on 20 August 2025.

The New Bank Facility will be secured by a mortgage over the Property and charges over the rental receivable accounts of the Target Companies. In addition, GZYX has agreed to provide a comfort letter in favour of the lending bank in respect of the Target Companies' obligations under the New Bank Facility.

To facilitate the post-completion capital structure agreed between the External Transferee and the Internal Reorganisation Party, the Equity Transfer Agreement contemplates that the Target Companies will, after the Disposal Completion Date, draw RMB3,000 million from the New Bank Facility and/or, if available, other facilities extended by one or more Independent Third Party lenders on the same or more favourable terms. The amount drawn down under the New Bank Facility and/or those other facilities will be used to discharge part of the Existing Payables owed to the Limited Liability Partnership (being a subsidiary of Yuexiu REIT) which will in turn be remitted out of the PRC together with the net proceeds from the Disposal to repay some of the existing offshore indebtedness of Yuexiu REIT.

The net proceeds from the Disposal, which are calculated based on the gross proceeds that Yuexiu REIT will receive from the External Transferee (including indirectly through the repayment of part of the Existing Payables by the Target Companies with the Shareholder Loan extended by the External Transferee), after deducting the Expenses, stamp duty and withholding tax estimated to be payable in connection with the Disposal, the Internal Reorganisation and the repatriation of proceeds offshore, are expected to be approximately RMB2,300 million. Including the RMB3,000 million expected to be drawn from the New Bank Facility (and/or, if available, other facilities extended by one or more Independent Third Party lenders on the same or more favourable terms) for the Refinancing, the total proceeds of approximately RMB5,300 million are intended to be fully applied towards the scheduled repayment and/or early repayment (as the case may be) of existing indebtedness of Yuexiu REIT.

The External Transferee, being a wholly-owned subsidiary of GZYX, is an associate of the Manager and Dragon Yield, and hence a connected person of Yuexiu REIT. The Internal Reorganisation Party is a non-wholly-owned subsidiary of Yuexiu REIT owned as to 1.00% directly by a subsidiary of GZYX (being GCCD Group) and 0.01% indirectly by Yuexiu Property, which are both connected persons of Yuexiu REIT. Given the Disposal and the Internal Reorganisation are linked to each other forming one significant proposal, through which each of the abovementioned connected persons will become directly or indirectly interested in the Target Companies, the Disposal, the Internal Reorganisation and the transactions contemplated under the Equity Transfer Agreement (including the entry into of the Joint Venture Agreement and the Shareholder Loan Agreements and the transactions contemplated thereunder) constitute connected party transactions of Yuexiu REIT under Chapter 8 of the REIT Code and Chapter 14A of the Listing Rules (modified as appropriate pursuant to 2.26 and 8.7A of the REIT Code).

As the highest applicable percentage ratio in respect of the Disposal and the Internal Reorganisation exceeds 5%, the Disposal, the Internal Reorganisation and the transactions contemplated under the Equity Transfer Agreement (including the entry into of the Joint Venture Agreement and the Shareholder Loan Agreements and the transactions contemplated thereunder) are subject to the announcement, circular, reporting and independent Unitholders' approval requirements under Chapter 8 of the REIT Code and Chapter 14A of the Listing Rules (modified as appropriate pursuant to 2.26 and 8.7A of the REIT Code).

Furthermore, as the highest applicable percentage ratio in respect of the Disposal and the Internal Reorganisation exceeds 25% but is less than 75%, the Disposal, the Internal Reorganisation and the transactions contemplated under the Equity Transfer Agreement (including the entry into of the Joint Venture Agreement and the Shareholder Loan Agreements and the transactions contemplated thereunder) constitute a major transaction of Yuexiu REIT and are subject to the notification, announcement, circular and Unitholders' approval requirements under Chapter 14 of the Listing Rules (modified as appropriate pursuant to 2.26 and 10.10B of the REIT Code).

While the New Bank Facility is related to the Disposal and the Internal Reorganisation, it has been separately negotiated with an Independent Third Party lending bank and, accordingly, is not one of the matters requiring Unitholders' approval.

Having regard to the reasons for, terms of, and factors and other information taken into consideration in relation to, the Transaction Matters Requiring Approval as described in this announcement, the Board (including the INEDs) considers that the Transaction Matters Requiring Approval are: (i) in the ordinary and usual course of business of Yuexiu REIT; (ii) consistent with the investment objectives and strategy of Yuexiu REIT, and in compliance with the REIT Code and the Trust Deed; and (iii) on terms which are normal commercial terms, are at arm's length and are fair and reasonable and in the best interests of Yuexiu REIT, the Independent Unitholders and the Unitholders as a whole in accordance with the REIT Code.

The Independent Board Committee, comprising all of the INEDs, has been established in accordance with Rule 14A.41 of the Listing Rules to advise the Independent Unitholders on the Transaction Matters Requiring Approval.

Somerley Capital Limited has been appointed as the Independent Financial Adviser of Yuexiu REIT to advise the Independent Board Committee, the Independent Unitholders and the Trustee on the Transaction Matters Requiring Approval pursuant to Rule 14A.44 of the Listing Rules.

The respective opinions of the Independent Board Committee, the Independent Financial Adviser and the Trustee with regard to the Transaction Matters Requiring Approval will be set out in the Circular.

The Manager will seek Independent Unitholders' approval for the Transaction Matters Requiring Approval by way of an Ordinary Resolution.