Reduce gearing and lower financing costs

The transaction and accompanying refinancing plan are intended to optimise Yuexiu REIT's capital structure and reduce its gearing ratio. The net proceeds from the disposal are expected to be approximately RMB2,300 million. Including the RMB3,000 million to be drawn from the new bank facility, the total proceeds of approximately RMB5,300 million will be fully applied towards the repayment of existing indebtedness. Management expects a significant reduction in interest expenses, distribution per unit (“DPU”) accretion and a decrease of the gearing ratio from 48.1% to approximately 41.2% upon the completion of the transaction and refinancing, improving the REIT's financial resilience and enhancing its long-term competitiveness.

DPU accretive transaction and positive impact on Yuexiu REIT’s external credit rating

It is expected that the disposal and the internal reorganisation, together with the refinancing, would lower Yuexiu REIT’s gearing ratio and interest expense, and, on a pro forma basis, result in an accretion to the total distributable income and DPU of the REIT. In addition, with the disposal and an optimised debt structure, the external credit rating of Yuexiu REIT is expected to improve, allowing it to employ diverse fundraising channels, including the offshore bond market, to support future development.

Portfolio rebalancing and upgrade

The disposal represents a significant strategic decision for Yuexiu REIT to optimise its portfolio composition. Following the disposal, the proportion of Yuexiu REIT’s revenue from office properties will decrease from 55% to 46%, further enhancing Yuexiu REIT’s ability to withstand market cyclical fluctuations.

Tap on potential advantages of partnering with Guangzhou Yue Xiu

Following the disposal, Yuexiu REIT will effectively be partnering with Guangzhou Yue Xiu as its joint venture partner in its ownership of Yuexiu Financial Tower in Guangzhou. Leveraging Guangzhou Yue Xiu’s credit, resources and reputation, Yuexiu Financial Tower in Guangzhou is expected to capture more favourable financing costs, further enhancing the yield of the Property. As a continuing minority shareholder, Yuexiu REIT stands to benefit from these improved financing conditions and the resulting uplift in investment returns.

Yuexiu Financial Tower is located in the core area of Guangzhou Zhujiang New Town. The Property comprises a 68-storey above-ground Grade A office building and a 4-storey basement with 827 underground carpark spaces. For the six months ended 30 June 2025 and the year ended 31 December 2024, revenue of Yuexiu Financial Tower was RMB165 million and RMB362 million, respectively.

For details, please refer to the REIT’s announcement dated 8 September 2025.

About Yuexiu Real Estate Investment Trust

Yuexiu Real Estate Investment Trust (“Yuexiu REIT”) was listed on The Stock Exchange of Hong Kong Limited on 21 December 2005 and is the first listed real estate investment trust in the world which invests in real properties in the mainland of the People's Republic of China (the “PRC”). The current property portfolio of Yuexiu REIT comprises ten high quality properties, namely Guangzhou International Finance Center, White Horse Building, Fortune Plaza, City Development Plaza, Victory Plaza and Yuexiu Financial Tower located in Guangzhou, Yue Xiu Tower located in Shanghai, Wuhan Properties located in Wuhan (including Wuhan Yuexiu Fortune Centre and Starry Victoria Shopping Centre), Victory Business Centre located in Hangzhou and Yue Xiu Building located in Hong Kong, with a total area of ownership of approximately 1.184 million sq.m. All properties are located in the central business district of Guangzhou, Shanghai, Wuhan, Hangzhou and Hong Kong, the PRC, respectively. The categories of the properties include Grade-A offices, commercial complexes, retail business, hotel, serviced apartments and clothing wholesale market etc.