Interim Results Announcement (int)

The Securities and Futures Commission of Hong Kong, 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 does not constitute nor is intended to constitute an offer to sell or a solicitation of an offer to buy any securities.

(A Hong Kong collective investment scheme authorised under section 104

of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong))

The board of directors (the "Board") of Yuexiu REIT Asset Management Limited (the "Manager") is pleased to announce the unaudited interim results of Yuexiu Real Estate Investment Trust ("Yuexiu REIT") for the six months ended 30 June 2025 (the "Interim Period") as follows:

The following is a summary of Yuexiu REIT's financial results during the Interim Period together with comparative figures for the six months ended 30 June 2024 and year ended 31 December 2024:

(in Renminbi ("RMB"), unless otherwise specified)

In accordance with the Trust Deed, Yuexiu REIT is required to distribute no less than 90% of Total Distributable Income to the Unitholders. The Manager has intended to distribute to the Unitholders an amount equal to 100% of Yuexiu REIT's Total Distributable Income and Additional Item (as defined in the Offering Circular issued to Unitholders dated 30 June 2012) for the Interim Period of 2025.

The Manager also has the discretion under the Trust Deed, where there are surplus funds, to distribute additional amounts. At the time of announcing the distribution for any particular year, the Manager shall consider whether to exercise such discretion having regard to factors including but not limited to Yuexiu REIT's funding requirements, its earnings and financial position, its growth strategies, operating and capital requirements, compliance with relevant laws, regulations and covenants (including existing limitations on borrowings as prescribed in the REIT Code), other capital management considerations, the overall stability of distributions and prevailing industry practices.

In light of the above, the Manager has determined that an interim distribution to Unitholders for the Interim Period will be approximately RMB0.0333 which is equivalent to Hong Kong Dollars ("HK$") 0.0366 (June 2024: approximately RMB0.0371 which was equivalent to HK$0.0405) per unit. Such interim distribution per unit, however, is subject to adjustment once new units are issued to the Manager (in satisfaction of the Manager's fee) prior to the record date for the 2025 interim distribution. A further announcement will be made to inform Unitholders of the interim distribution per unit for the six months ended 30 June 2025.

The total 2025 interim distribution amounted to approximately RMB171,141,000 which is equivalent to HK$188,201,000 (June 2024: approximately RMB185,247,000 which was equivalent to HK$202,036,000), includes an amount of approximately RMB62,755,000 (June 2024: RMB85,136,000), that is capital in nature. The total distribution amount for the Interim Period comprises the distributable amount calculated pursuant to the formula set out in the Trust Deed plus a further distribution of approximately RMB3,137,000 having regard to the abovementioned discretion of the Manager under the Trust Deed to distribute excess amounts where it has surplus funds. Further details regarding the breakdown of the total distributable amount are set out in the Distribution Statement of this announcement.

Distribution payable to Unitholders is paid in Hong Kong dollar. The exchange rate adopted by the Manager is the average central parity rate, as announced by the People's Bank of China, for the five business days preceding the date of declaration of distribution.

Distribution to Unitholders for the Interim Period is HK$0.0366 per unit (June 2024: HK$0.0405), representing a yield of approximately 4.21% (28 June 2024: 4.26%) based on the closing price of HK$0.87 per unit as at 30 June 2025 (28 June 2024: HK$0.95). This represents an annualized distribution yield of 8.42%.

The record date for the interim distribution will be 11 September 2025. The register of Unitholders will be closed from 11 September 2025 to 12 September 2025, during which period no transfer of units will be effected. In order to qualify for the distribution, all Unit certificates with the completed transfer forms must be lodged with Yuexiu REIT's unit registrar, Tricor Investor Services Limited, at 17/F, Far East Finance Center, 16 Harcourt Road, Hong Kong, no later than 4:30 p.m. on 10 September 2025. The 2025 interim distribution will be paid on 24 October 2025 to the Unitholders whose names appear on the register of Unitholders on 11 September 2025.

In the first half of 2025, global economic growth slowed down as the United States launched a tariff war around the world, trade policy uncertainty increased significantly, and the geopolitical situation deteriorated sharply. Given the ongoing inflationary pressure, the US Federal Reserve did not lower the interest rate in the first half of the year. Faced with the escalating internal and external risk factors, China has introduced "trade-in" subsidy policies to stimulate consumption, initiated "supply-side structural reform 2.0" to regulate the order in market competition, promoted the healthy development of new quality productive forces to foster emerging production capacity, and continued the moderate accommodative monetary policy with a reduction of 10 basis points in the Loan Prime Rate (LPR) in the first half of 2025. According to the National Bureau of Statistics, China's gross domestic product (GDP) in the first half of 2025 increased by 5.3% year-on-year, showing an overall stable and improving trend. In particular, the added value of the tertiary industry grew by 5.5% year-on-year, contributing 60.2% to the economic growth. From the demand side, consumer expenditure was the main driving force, contributing 52.0% to economic growth, while export trade showed remarkable resilience, with net exports of goods and services contributing 31.2% to economic growth.

In the first half of 2025, the office building market continued to see a trend of pursuing "cost reduction and efficiency improvement", and corporate expansion remained cautious and slow. For retail malls and clothing wholesale markets, merchants have been subjected to increased operating pressure stemming from weak consumption. For high-end hotels and serviced apartments, average daily rate (ADR) was under pressure due to the direct impact of consumption downgrading. In order to effectively deal with the headwinds in the industry, the Manager took strategic actions to secure market share, strengthened risk control by renewing leases in advance, invested in asset appreciation projects to enhance product competitiveness, and adopted comprehensive measures to stabilise the fundamentals of operations, which effectively supported the revenue of Yuexiu REIT for the interim period. The Manager is pleased to see lower financing cost, which is beneficial to the distribution.

As of 30 June 2025, Yuexiu REIT's portfolio of properties consisted of ten properties, namely, White Horse Building Units ("White Horse Building"), Fortune Plaza Units and certain Carpark Spaces ("Fortune Plaza"), City Development Plaza Units and certain Carpark Spaces ("City Development Plaza"), Victory Plaza Units ("Victory Plaza"), Guangzhou International Finance Center ("GZIFC"), Yuexiu Financial Tower ("Yuexiu Financial Tower"), located in Guangzhou; Yue Xiu Tower ("Shanghai Yue Xiu Tower"), located in Shanghai; Wuhan Yuexiu Fortune Centre, Starry Victoria Shopping Centre and certain Carpark Spaces ("Wuhan Properties"), located in Wuhan; Hangzhou Victory Business Center Units and certain Carpark Spaces ("Hangzhou Victory"), located in Hangzhou; and 17th and 23rd Floors of Yue Xiu Building Units ("17th and 23rd Floors of Hong Kong Yue Xiu Building"), located in Hong Kong. The total gross floor area of the properties was 1,184,156.5 sq.m. and the total rentable area was 803,984.1 sq.m. (excluding 1,408.3 sq.m. of parking space of Fortune Plaza; 2,104.3 sq.m. of parking space of City Development Plaza; 91,460.9 sq.m. of hotel, 51,102.3 sq.m. of serviced apartments, 76,512.3 sq.m. of parking space, and 7,752.5 sq.m. of other ancillary facilities area of GZIFC; 13,502.6 sq.m. of parking space and 2,610.4 sq.m. of specific purpose area of Shanghai Yue Xiu Tower; 62,785.7 sq.m. of parking space and 12,415.1 sq.m. of common facilities area of Wuhan Properties; 17,663.6 sq.m. of parking space of Hangzhou Victory; 10,289.1 sq.m. of parking space and 29,797.1 sq.m. of common facilities area of Yuexiu Financial Tower, and the following statistics of both aggregate rented area and occupancy rate have excluded the above areas).

On 30 June 2025, revaluation of the portfolio of properties of Yuexiu REIT was carried out by Savills Valuation and Professional Services Limited ("Savills"), an independent professional valuer, and the revalued market value was approximately RMB41.889 billion.

The following table summarises the valuation of each of the properties as at 30 June 2025 and 31 December 2024:

Particulars of the properties are as follows:

Notes:

1. As at 30 June 2025;

2. Excluding 1,408.3 sq.m. of parking space;

3. Excluding 2,104.3 sq.m. of parking space;

4. Excluding 76,512.3 sq.m. of parking space and 7,752.5 sq.m. of other ancillary facilities area;

5. Including 2,262.0 sq.m. of hotel ancillary facilities area and refuge floor area;

6. Excluding 13,502.6 sq.m. of parking space and 2,610.4 sq.m. of specific purpose area (management office, owners' committee office, bicycle parking space and refuge floor);

7. Excluding 10,490.3 sq.m. of common facilities area and refuge floor area;

8. Excluding 1,924.8 sq.m. of common facilities area;

9. Excluding 17,663.6 sq.m. of parking space;

10. Excluding 10,289.1 sq.m. of parking space and 29,797.1 sq.m. of common facilities area.

As at 30 June 2025, the overall occupancy rate of the properties was approximately 82.2%.

The following table sets out a comparison of occupancy rates in respect of all the properties between the Interim Period and the corresponding period of previous year:

Notes:

1. From 1 January 2025 to 30 June 2025;

2. Both hotel and serviced apartments are entrusted operation.

During the Interim Period, the properties of Yuexiu REIT recorded total revenue of approximately RMB966.1 million, representing a decrease of 6.6% as compared to the corresponding period of the previous year. White Horse Building, Fortune Plaza, City Development Plaza, Victory Plaza, GZIFC, Shanghai Yue Xiu Tower, Wuhan Properties, Hangzhou Victory, Yuexiu Financial Tower and 17th and 23rd Floors of Hong Kong Yue Xiu Building accounted for approximately 11.3%, 3.2%, 3.2%, 3.3%, 50.3%, 4.9%, 4.8%, 1.7%, 17.1% and 0.2% of the total revenue, respectively.

The following table sets out a comparison of revenue in respect of the Properties between the Interim Period and the corresponding period of 2024:

Note:

(i) Fortune Plaza, City Development Plaza and Victory Plaza recognised revenue from advertising spaces of RMB8 million, RMB4 million and RMB8 million respectively in the interim period of 2024, with no such revenues in the Interim Period of 2025.

The office properties of Yuexiu REIT are located in four high-growth cities in Chinese Mainland (namely, Guangzhou, Shanghai, Wuhan and Hangzhou) and Hong Kong. During the Interim Period, cities where the Mainland properties are located witnessed an increase in supply with a weak demand for office building to varying degrees, which have generally put pressure on project occupancy rates. Facing fierce competition, the Manager adhered to the principle of "one project, one strategy, one dedicated team". With setting the stabilisation of occupancy rates as the priority, the Manager actively broadened tenant promotion channels, launched products such as furnished units, and small and medium-sized units to meet market demand, introduced and retained quality tenants to enhance tenant structure, and consolidated market competitiveness by leveraging the advantages of the properties. As of 30 June 2025, among office tenants, tenants with backgrounds of the Fortune Global 500 companies and Fortune China 500 companies accounted for 37.5% of the rented area.

GZIFC: The office portion of the GZIFC commercial complex, which is a super grade A office building and one of the iconic buildings and landmarks in the core area of Zhujiang New Town, Guangzhou. During the Interim Period, GZIFC achieved positive growth in both customer flow and conversion rates through continuous product enhancement and operational optimisation, with a newly contracted area of 13,133 sq.m., including a large area leased on one floor (trading business sector). The newly launched 4,235 sq.m. of furnished units recorded an absorption cycle of only about 19 days and an absorption rate close to 90%. Quality tenants introduced include a Fortune Global 500 company (in IT sector), a leading global shipping company and a renowned Internet-based culture, sports and entertainment company, taking up more than 2,200 sq.m. in aggregate. In addition, the project recorded a renewed leasing area of 9,099 sq.m. and a renewal rate of 70%, retaining quality tenants including 2 Fortune Global 500 companies (in the chemical and household appliances sectors) and a foreign consulate. As at 30 June 2025, the occupancy rate of the office building of GZIFC was 82.6%, representing a year-on-year decrease of 2.1 percentage points. In May, GZIFC was selected as one of the Top 30 companies in the "Performance Index - 2025 Commercial Property Operation Performance (表現力指數·2025商辦資產運營表現)" by Guandian.

The retail mall properties of Yuexiu REIT are located in two high-growth cities in Chinese Mainland (Guangzhou and Wuhan). Driven by "trade-in" comsumption subsidy policies, domestic consumption activity improved, with the June 2025 Consumer Price Index (CPI) turning positive year-on-year, and total retail sales of consumer goods boosted by 5.0% year-on-year in the first half of 2025. In comparison, consumption in core business districts remained strong, with outdoor sports and trendy entertainment economies driving a notable consumption vitality. During the Interim Period, the Manager adjusted brand mix in line with consumption trends, created consumption scenarios through cross-sector collaboration, and empowered merchant operations in multiple ways.

Victory Plaza: A premium retail shopping mall located in the core business district of Tiyu West Road, Tianhe District, Guangzhou. During the Interim Period, its anchor tenant, Uniqlo, continued to play a flagship role by launching its C-series products, and hosted the first "A Better Life" campaign of Uniqlo (優衣庫美好生活市集) in China, along with gigantic Pokémon installations and A Better Life Music Event, from 28 March to 6 April. Customer flow reached a quarterly peak during the events, driving a 7% year-on-year sales growth in April, contributing to a 0.3% year-on-year sales growth during the Interim Period. By collaborating with tenants engaging in catering services to capitalise on increased sales with a surging customer flow, the project drove a year-on-year increase of 0.6% in overall sales during the Interim Period. As at 30 June 2025, the occupancy rate stood at 96.2%, representing a year-on-year decrease of 1.6 percentage points, yet maintaining a high level occupancy.

brands, including the internet-famous brand "Domino's" on the 1st floor of Hall A, to attract more family customer groups. The project tapped into nighttime consumption by leveraging the unique appeal of "Joy Garden (悅花園)" on the 4th floor, continuously developing initiatives like "Riverside Starry Night (江畔星夜)" and "Midnight Diner (深夜食堂)" to stimulate new sales growth drivers. As at 30 June 2025, the occupancy rate stood at 82.4%, representing a year-on-year decrease of 6.3 percentage points.

White Horse Building: The sole wholesale market under Yuexiu REIT, and one of Guangzhou's iconic apparel wholesale markets. During the Interim Period, White Horse Building introduced supply chain resources from the Pearl River Delta and recorded a newly contracted area of 3,273 sq.m., with full occupancy on the 1st floor. White Horse Building focused on four key dimensions - operational capability, product competitiveness, brand image and channel diversification, and organised two election events, "Most Favoured Merchants by Purchasers (最受採購商喜愛商戶)" and "Most Favoured Products by Purchasers (最受採購商喜愛產品)", which attracted the participation of more than 200 merchants, aimed at empowering quality merchants in a targeted manner. By integrating a "Fashion+" cross-sector marketing ecosystem, White Horse Building creatively launched four major promotional campaigns in boosting more shopping scenarios: anniversary celebration, May Day Golden Week, autumn and winter joint order fair, and mid-year promotion, which effectively improved the growth of customer flow. With a core strategy of "group purchases to drive bulk purchases and ultimately transform into tenants' revenue", White Horse Building managed to build its dual drivers to expand cultural, commercial and tourism resources alongside with outreaching to foreign purchasers through the Canton Fair. In the first half of 2025, it welcomed a total of 165 procurement delegations, along with recepting nearly 5,000 purchaser visits, including 23 foreign delegations from France, Vietnam and other countries, and facilitated procurement deals worth of RMB140 million. By taking advantage of exhibitions such as the Greater Bay Area International Women's Wear Expo and the Canton Fair, White Horse Building facilitated tenants' transactions. It also successfully established the cross-border e-commerce platform "White Horse Global E-Channel (白馬悅境通)" and set up a series of courses titled "White Horse Business School Marketing Empowerment Camp" to activate new momentum for tenants' digital operations. As at 30 June 2025, the occupancy rate stood at 95.0%, substantially in line with that in the previous year.

The hotel and serviced apartments of Yuexiu REIT form an integral part of the commercial complex of GZIFC, including Four Seasons Hotel Guangzhou and Ascott Serviced Apartments GZIFC. According to data from China's National Immigration Administration, China recorded 38,053,000 foreigners entering and leaving the country in the first half of 2025, representing a year-on-year increase of 30.2%, which included 13,640,000 visa-free entries by foreigners, representing a year-on-year increase of 53.9%. These inbound travellers effectively made up for the demand for high-end hotel consumption.

Every year, the Manager invests in a number of asset upgrading and renovation projects, with a view to continue to improve product competitiveness, energy conservation and carbon reduction performance, and safety assurance level of the asset portfolio. During the Interim Period, the Manager completed the upgrading and renovation project of the restaurant at Ascott Serviced Apartments GZIFC, the upgrading and renovation project of the air-conditioning system at White Horse Building, as well as the upgrading and renovation project of the public area on standard floors at Wuhan Yuexiu Fortune Centre. In the second half of 2025, the Manager plans to continue investing in the following renovation projects.

In terms of product competitiveness improvement, for office buildings, the Manager plans to renovate vacant units in GZIFC, Yuexiu Financial Tower, Fortune Plaza, City Development Plaza, Wuhan Yuexiu Fortune Centre, Shanghai Yue Xiu Tower and Hangzhou Victory to create furnished office units meeting market demand, which will effectively shorten the tenant solicitation cycle and stabilise the rental level. For hotel and serviced apartments, the Manager plans to carry out guest room upgrading project as well as replacement of soft-covered walls and ceiling refurbishment in the banquet hall at Four Seasons Hotel Guangzhou, so as to elevate service quality. For public areas, the Manager plans to carry out the maintenance and renovation project for the public areas of the office buildings at GZIFC, renovation and reconstruction project of the public areas of the City Development Plaza and renovation project of certain public corridors on the 3rd to 27th floors at Shanghai Yue Xiu Tower.

In terms of equipment and facilities upgrades, the Manager plans to carry out the insulation replacement project for the air-conditioning system from the 15th to the 28th floors of the main tower of GZIFC, the retrofit of certain air-conditioning system terminal at Fortune Plaza, the upgrading and renovation project of the air-conditioning air handling units at Victory Plaza, the retrofit of the air-conditioning equipment in Hall B of Wuhan Starry Victoria Shopping Centre, and the replacement of chilled water pipes for the air-conditioning system at Yuexiu Tower.

In terms of safety and security enhancement, the Manager plans to carry out the renovation and refurbishment project of the roof structure protective layer on the 103rd floor of Four Seasons Hotel Guangzhou, the upgrading and renovation project of the smart evacuation lighting system at Ascott Serviced Apartments GZIFC, the replacement of storage-type electric water heaters and the renovation of gas pressure regulating wells in the office buildings at GZIFC, the upgrading and renovation project of the high-voltage cabinets and the replacement of terminal devices in the automatic fire alarm system at White Horse Building, the replacement and renovation of transformers at City Development Plaza, the anti-rust treatment of steel structures at Wuhan Yuexiu Fortune Centre, and the renovation of the marble pavement from the Fushan Road exit to the Xiangcheng Road exit at Shanghai Yue Xiu Tower.

In terms of liquidity management, with regard to the short-term loan of RMB530 million and the 5-year syndicated loan of HK$2.1 billion, both due in the first half of 2025, and other loans which are due within the year, the Manager in the first half of 2025 renewed the short-term loan of RMB530 million, obtained offshore loan of RMB1.7 billion and issued dim sum bonds of RMB1 billion for the refinancing and early repayment of the maturing loans so as to ensure effective monitor on the liquidity risk.

As for interest rate management, in order to alleviate inflationary pressure, the United States has announced 11 interest rate hikes in a row since 2022, with a cumulative increase of 525 basis points. Hong Kong dollar followed the sharp interest rate hike, with significant increase in Hong Kong dollar interest rates simultaneously. Separately, in order to boost domestic economic recovery, RMB interest rate cuts have been ongoing since the end of 2021, with the 1-year and 5-year domestic loan prime rates (LPRs) reducing by an aggregate of 85 basis points and 115 basis points, respectively. The US Federal Reserve started interest rate hikes from 2022, but it has announced 3 interest rate cuts since September 2024 with a cumulative decrease of 100 basis points, and the Hong Kong dollar interest rates have fallen accordingly. Subsequently, due to the release of liquidity by the Hong Kong Monetary Authority in late May 2025 and the expected IPOs in the Hong Kong market, Hong Kong dollar enjoyed sufficient liquidity. At the end of June 2025, the 1-month HIBOR fell to approximately 0.73%, a relatively low level in the past three years. Due to the pressure of factors such as inflation in the United States and the international situation, the path of US dollar interest rate cuts remains unclear. Prevailing market expectation indicates that overseas interest rates are likely to remain relatively high for a period of time. In the medium and long term, RMB will maintain a certain financing spread advantage over Hong Kong dollar and US dollar.

Taking advantage of the position of the RMB interest rate market, the Manager continued to research various financing instruments and actively adjusted the financing structure at a reasonable cost level to mitigate the impact of the interest rate market on the operating results of Yuexiu REIT. A total of RMB3.23 billion in loans were obtained in the first half of 2025 to refinance offshore HKD floating rate loans, taking advantage of the relatively low-cost of RMB financing to proactively adjust the financing structure, thereby minimising the impact of the interest rate market. At the end of the first half of 2025, the financing interest rate exposure of Yuexiu REIT was approximately 14%, narrowed by 12 percentage points from 26% at the beginning of the year; the average financing cost was 3.33%, representing a decrease of 83 basis points from 4.16% at the beginning of the year; the average interest payment rate for the first half of the year was 3.92%, representing a year-on-year decrease of 64 basis points from 4.56% in the first half of 2024.

With regard to foreign exchange management, due to the combined effects of US dollar interest rate hikes and RMB interest rate cuts since 2022, both US dollar and Hong Kong dollar appreciated significantly against RMB and are expected to remain at relatively high levels. The Manager continued its focus on the market dynamics by adopting effective management strategies, actively adjusted the financing structure and timely used foreign exchange hedging tool at reasonable cost to monitor financing foreign exchange exposure.

RMB financing has been continuously introduced to replace Hong Kong dollar financing since 2023. At the end of June 2025, Yuexiu REIT RMB financing reached approximately RMB14,795 million, accounting for 72% of total financing (corresponding period of 2024: RMB financing of approximately RMB8,404 million, accounting for 41% of total financing). At the end of June 2025, the foreign exchange exposure of Yuexiu REIT was equivalent to approximately RMB5,770 million, accounting for 28% of total financing (corresponding period of 2024: foreign exchange exposure of approximately RMB12,075 million, accounting for 59% of total financing). The Manager has also continued to further narrow the exchange rate exposure by adjusting the financing structure and increasing the proportion of low-cost RMB financing when appropriate.

The Manager continued to promote the deep integration of ESG standards into business development, enhance lean management efficiency and advance sustainable development. During the Interim Period, multiple properties under Yuexiu REIT achieved milestone breakthroughs by obtaining the WELL Building Standard recognition, marking another active exploration and practical achievement in the ESG field of commercial real estate in China. Specifically, the GZIFC Office and Yuexiu Financial Tower obtained the Platinum-level WELL certifications with outstanding performance, becoming the only two office buildings in Zhujiang New Town CBD of Guangzhou to receive both LEED and WELL Platinum-level certifications. The GZIFC Shopping Mall, Fortune Plaza, City Development Plaza, Victory Plaza, Wuhan Yuexiu Fortune Centre, Wuhan Starry Victoria Shopping Centre, Shanghai Yue Xiu Tower and Hangzhou Victory all received recognitions under the WELL Health-Safety Rating (WELL HSR).

In the first half of 2025, China suffered from frequent high temperature. According to the China Meteorological Administration, the national average temperature in June even hit a record high compared to the previous corresponding periods, indicating the impact of climate change on the daily life of everyone. The properties under Yuexiu REIT continuously strengthened equipment and facility management, enhanced digital energy consumption monitoring capabilities, and regularly conducted safety emergency drills, integrating the concept of sustainable development into the details of daily operations. From April to May, GZIFC successfully hosted a public welfare event titled "Action for a Green Future, Kind Action brings Gooodness (綠動未來，向善而行)", collaborating with tenants, merchants and public welfare organisations to launch themed activities such as dialogues exploring sustainable lifestyles, sustainable lifestyle art exhibitions, experience activities of coffee grounds recycling for planting, and sustainable lifestyle markets, calling on the public to explore sustainable lifestyles.

On the one hand, the market generally hopes for further interest rate cuts by the US Federal Reserve in the second half of 2025, though the path and extent remain uncertain. On the other hand, 2025 marks the concluding year of China's "14th Five-Year Plan", with policies prioritising stability, including moderate accommodative monetary policies and "trade-in" consumption subsidy policies aimed at expanding domestic demand to stimulate market vitality. Consequently, the Manager expects the RMB interest rate to remain at a relatively low level. With the accelerated development of new quality productive forces and the advancement of supply-side reforms in China, the Manager expects that new industrial momentum will continue to emerge and business environment will improve. The highly anticipated 15th National Games is scheduled to open in Guangzhou in the second half of 2025, which is expected to boost consumption in shopping malls and demand for hotels and apartments.

In the second half of 2025, the Manager will keep abreast of economic development trends and dynamically implement proactive, prudent and flexible leasing strategies, keenly seize potential opportunities, and continuously enhance the market competitiveness of asset portfolio. The Manager will continue to review and make reasonable adjustments to its financing structure depending on expectations of market developments, and introduce low-cost RMB financing through various RMB financing channels to seek more favourable financing costs to offset interest rate risks. Additionally, the Manager will carry out relevant asset appreciation projects as planned, with reasonable planning and phased renovation of the guest rooms at Four Seasons Hotel Guangzhou. By focusing on product enhancement, equipment renewal and safety guarantee, the Manager aims to achieve value preservation and appreciation of the properties and ensure the sound operation of the projects.

During the Interim Period, gross income was lower than the corresponding period of 2024. The following is a summary of Yuexiu REIT's financial results during the Interim Period:

Note 1 Property related taxes include real estate tax, land use right tax, urban construction and maintenance tax, education surcharge, local education surcharge and stamp duties etc..

Note 2 Other property expenses include valuation fee, insurance premium, impairment allowance and other expenses incurred at the level of the properties.

Note 3 Other trust expenses include audit fees, printing charges, unit registrar 's fees, legal advisory fees, exchange differences from operation, value added tax, Manager's fee adjustment and miscellaneous expenses.

Gross income comes from office, wholesales, retails, hotel and serviced apartments. The following table shows an analysis of gross income:

During the Interim Period, net property income amounted to approximately RMB679,036,000 (June 2024: RMB742,665,000), being the income after deduction of hotel and serviced apartments direct expenses, property related taxes, leasing agents' fees and other property operating expenses, representing approximately 70.3% (June 2024: 71.8%) of total gross income. The table below sets out an analysis of net property income:

Hotel and serviced apartments direct expenses were RMB156,425,000 (including depreciation expense of approximately RMB5,951,000 incurred in connection with right-of-use assets and interest expense of RMB182,000 incurred in connection with lease liabilities), an increase of 0.1% as compared with six months ended 30 June 2024. It was mainly due to an increase in the labor cost from hotel.

Leasing agents' fee decreased by approximately 9.2% as compared with six months ended 30 June 2024. It was mainly due to a decrease of rental income.

Property related taxes decreased by approximately 3.3% as compared with six months ended 30 June 2024. It was mainly due to a decrease of rental income.

As the hotel and serviced apartments were booked as fixed assets, they incurred the depreciation and amortization charge.

Other trust expenses decreased by approximately 684.8% as compared with six months ended 30 June 2024. It was mainly due to the Manager's fee adjustment of approximately RMB43,293,000 (June 2024: RMB7,354,000). Excluding this Manager's fee adjustment income, other trust expenses incurred for the Interim Period amounted to approximately RMB10,418,000 (June 2024: approximately RMB12,976,000, excluding the Manager's fee income), representing a decrease of approximately 19.7% year-on-year.

The finance income received for the Interim Period amounted to approximately RMB10,568,000 (June 2024: RMB16,013,000).

As RMB appreciated against HK$ and USD for the Interim Period, the bank borrowings and guaranteed medium term notes denominated in United States Dollar resulted in an exchange loss of approximately RMB58,231,000. Excluding the exchange loss, the finance expenses incurred for the Interim Period amounted to approximately RMB402,886,000 (June 2024: Excluding the exchange loss, the finance expenses were approximately RMB465,628,000). The average one-month Hong Kong Interbank Offered Rate ("HIBOR") for the first half of 2025 was 2.88%, which was lower than that of the first half of 2024 by approximately 163 basis points and led to a decrease of interest expenses on the floating portion of debt.

Loss after tax before transactions with Unitholders amounted to approximately RMB337,419,000 (June 2024: loss of approximately RMB40,529,000), which represented an increase of approximately 732.5%, mainly due to a fair value loss on investment properties.

In respect of the settlement of Manager's fee for the period from 1 July 2024 to 31 December 2024, Yuexiu REIT issued 50,348,379 new units at HK$0.85 per unit on 1 April 2025. As at 30 June 2025, a total of 5,141,086,550 units were issued by Yuexiu REIT.

The unit price of Yuexiu REIT reached a high of HK$0.95 and a low of HK$0.67 during the Interim Period. The average trading volume amounted to approximately 3,281,000 units per day (June 2024: 3,307,000 units) during the Interim Period.

Referring to an announcement on 24 March 2024, RMB3,275,674 (which is equivalent to approximately HK$3,610,473) has been deferred and settled by issuing another tranche of new Units at the applicable Market Price at such later date which the REIT Manager considers is in the interests of the independent Unitholders provided the Trustee has no objection to such issuance.

Referring to an announcement on 2 September 2024, RMB19,393,162 (which is equivalent to approximately HK$21,238,815) has been deferred and settled by issuing another tranche of new Units at the applicable Market Price at such later date(s) which the REIT Manager considers is in the interests of the independent Unitholders provided the Trustee has no objection to such issuance.

According to the offering circular in relation to the acquisition of GZIFC dated 30 June 2012, commencing from 31 December 2016, the Yuexiu REIT will, on 31 December of each year, issue to Yuexiu Property Company Limited ("YXP") (or YXP Nominee) such number of Deferred Units as shall be equal to the maximum number of Units that may be issued to YXP (or YXP Nominee) and its concert parties which, when aggregated with the Manager Fee Units that are expected to be issued during the period of 12 months after the relevant Issue Date, will not trigger an obligation on the part of YXP (and parties acting in concert with it) to make a mandatory general offer under Rule 26 of the Takeovers Code for all units not already owned or agreed to be acquired by them at the relevant time.

As stated in the circular dated 13 November 2021 ("2021 Circular"), in light of the subscription price of the Rights Issue (being HK$3.20) being at a discount greater than 10% of the average of the daily closing prices of the Units for the five consecutive trading days preceding the date of the 2021 Announcement (being HK$3.67), the Deferred Units Issue Price shall be adjusted by multiplying the current Deferred Units Issue Price (being HK$4.00 per Unit) by the fraction as set out under the Indebtedness Agreement and further described in the 2021 Circular (the "Deferred Units Issue Price Adjustment"). The Deferred Units Issue Price Adjustment has taken effect upon the completion of the Rights Issue, which has taken place on 26 January 2022.

Accordingly, assuming no other Deferred Units Adjustment Events eventuate, the balance of the Assignment consideration will be settled by the issuance of 212,808,584 Deferred Units in aggregate at HK$3.861652 per Unit.

The net assets (including net assets attributable to deferred Unitholders) attributable to existing Unitholders per unit as at 30 June 2025 was approximately RMB2.82 (as at 31 December 2024: RMB2.91).

The overall effective interest rate (per annum) of the bank borrowings and notes at the balance sheet date was 3.33% (as at 31 December 2024: 4.16%).

On 5 February 2025, Yuexiu REIT, through its offshore SPV company, entered into a facility renewal agreement with an offshore bank in connection with a one-year unsecured and fixed rate term loan facility of RMB530,000,000. It was drawn down on 5 February 2025 for repayment of certain HK$ bank loan facility.