29 November 2004

Dear Sir / Madam,

Initial Public Offering ("IPO") of the Link Real Estate Investment Trust¹ ("Link REIT")

In the light of the recent surge of public interests in the Link REIT IPO, I am writing to draw your attention to the supervisory requirements in relation to the IPO.

Although strictly speaking the Link REIT IPO is not a new share issue, the nature and operations of the IPO are very similar to a new share issue. Therefore, all the HKMA's guidelines specified in the following circulars shall be applicable to the IPO:

• "Financing of the subscription of new share issues" dated 31 May 1993

• "Role of the receiving bank in new share issues" dated 5 February 1994

• "Role of the receiving bank in new share issues" (supplementary guideline) dated 30 May 2000

• "Initial Public Offering" dated 11 December 2003

Copies of these circulars are available at the HKMA website (http://www.hkma.gov.hk).

Specifically, authorized institutions' ("AIs") attention is drawn to the following requirements:

Financing the subscription of the Link REIT IPO

1. As a normal practice, AIs should impose a margin requirement of not less than 10% on lending to individual brokers and customers to finance their subscription for the IPO.
   
   

2. AIs should limit the total amount of such lending to an amount that is well within the institution's ability to obtain funding to meet its obligations on the day of settlement. Such exposure cannot in any case be more than 25% of the AI's capital base except to the extent that it is secured by cash deposits.

Receiving banks

3. Receiving banks of the Link REIT IPO should observe their credit limits for individual AIs when recycling application monies. Any temporary increase of the normal interbank limits should be properly justified and controlled, and should not result in a limit to any individual AI to exceed 25% of the receiving bank's capital base.
   
   

4. The receiving banks should establish and maintain good communication with the sponsors / listing agents on resources planning, contingency measures and crowd management. They should designate properly trained staff at receiving branches to handle enquiries.

In addition, AIs are reminded of the following requirements:

5. AIs should ensure that their relevant individuals strictly observe the restrictions on unsolicited calls under the Securities and Futures Ordinance.
   
   

6. Receiving banks should not distribute to the general public (i.e. persons who are not their securities clients) any IPO white application form which is pre-stamped with the company chop of a broker.
   
   

7. Before accepting the deposit of an IPO refund cheque, the handling staff of an AI should verify both the name and the printed part of Hong Kong identity card number / passport number ("the part ID number") of the payee shown on the cheque against the AI's own records.
   
   

8. There should be policies and procedures to provide clear guidance to staff on how to handle the situation where the part ID number shown on the refund cheque does not match with the AI's own records.

Finally, AIs should ensure that they comply with all applicable requirements issued by the Securities and Futures Commission. If you have any questions on the contents of this letter, please contact Mr Shu-Pui Li on 2878-1826 or Ms Alice Lee on 2878-1603.

Yours sincerely,

William A. Ryback
Deputy Chief Executive

¹ A Real Estate Investment Trust ("REIT") is a collective investment scheme constituted as a trust that invests primarily in real estate with the aim to provide returns to holders derived from the rental income of the real estate.