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The following is issued on behalf of the Housing Authority and The Link Management Limited:-
(*Not for distribution in or into the United States, Canada or Japan)
The Housing Authority ("HA") is to divest 180 of its retail and carparking facilities (the "Properties"), which will form the portfolio of The Link Real Estate Investment Trust ("The Link REIT"), the first REIT to be listed in Hong Kong.
Announcing details at a press conference today (November 24), the Permanent Secretary for Housing, Planning & Lands (Housing), Mr. Leung Chin-man said "the divestment plan sets three new records.
"The plan is the biggest privatisation of its kind in Hong Kong. The Link REIT also is the first REIT in Hong Kong and is, indeed, the largest single REIT Initial Public Offering in the world," he said.
Describing the divestment plan as a three-win formula for the Government, the real estate and financial markets and for the people of Hong Kong, Mr. Leung said the divestment plan was a spectacular example of realizing the objective of "small Government, big market."
"It is an important milestone in the development of Hong Kong real estate and financial markets as the launching of the first REIT in Hong Kong would not only help enhance the status of Hong Kong as a global financial centre, but would also bring a new dimension to the real estate market not seen before in our city.
"This will enable the HA to focus on its core business of providing subsidised public rental housing to people in need," he added.
Upon completion of the global offering of units (the "Units") in The Link REIT (the "Global Offering"), The Link REIT will acquire the 180 Properties from HA.
Of the Properties, 149 are integrated retail and carparking facilities, two are standalone retail facilities, and 29 are standalone car park facilities.
Should the Global Offering's over-allotment option (the"Over-allotment Option") be exercised in full, HA will hold no residual Units.
The Link REIT will hold Hong Kong's largest portfolio of retail and car park properties held by a single owner in terms of internal floor area ("IFA").
The portfolio has an IFA of about 950,000 square metres of retail space, representing 9.1% of total retail space and about 79,000 carpark spaces, representing 13.7% of total commercial carpark spaces in Hong Kong.
The Link REIT will be managed by The Link Management Limited ("The Link Management"). The Chief Executive Officer of The Link Management, Mr. Victor So Hing-woh, said, "My team and I are excited at the prospects of managing a portfolio of properties that are so important to the daily lives of millions of people in Hong Kong."
The Global Offering
The Global Offering will initially comprise:
* a Hong Kong Public Offering of 197,220,000 Units to the public in Hong Kong, and
* an International Offering of 1,774,979,000 Units to institutional, professional and other investors.
The final split of the Units allocated between the Hong Kong Public Offering and the International Offering will be determined after the time of the pricing, expected to be on 11 December 2004.
Such allocation will be determined in accordance with the "clawback" arrangements, relating to the level of demand in the Hong Kong Public Offering as set out in the offering circular for the Hong Kong Public Offering (the "Offering Circular"), although HA has the ability to increase the allocation to the Hong Kong Public Offering over and above the minimum clawback amounts triggered.
Up to an additional 216,701,000 Units (representing about 11.0% of the initial Global Offering) may be made available by HA by way of the Over-allotment Option.
The offer price:
* is currently expected to be not less than HK$10.51 per Unit, and
* will not be more than HK$10.83 per Unit (the "Maximum Offer Price").
The final offer price is expected to be announced on 15 December 2004. In addition to the final offer price, successful applicants must pay brokerage of 1%, Hong Kong Stock Exchange trading fee of 0.005%, Securities and Futures Commission ( the "SFC") transaction levy of 0.005% and investor compensation levy of 0.002% ( the "Other Transaction Costs").
Hong Kong Public Offering Discount
Each applicant who successfully applies for Units under the Hong Kong Public Offering, will be entitled to receive a 3% discount to the final offer price per Unit (rounded up or down, as the case may be, to the nearest cent).
This 3% discount applies to Units in The Link REIT allocated to that applicant under the Hong Kong Public Offering, up to a maximum of HK$ 2.5 million worth of Units, rounded down to the nearest board lot. The limit of HK$ 2.5 million is the value of allocated Units before applying the 3% discount under the Hong Kong Public Offering and does not include the Other Transaction Costs.
Distribution Policy
The Link Management's policy is to distribute 100% of The Link REIT's total distributable income, calculated in the prescribed manner, for each financial year.
For the year ending 31 March 2006, The Link REIT is offering an indicative 6.65% yield. This yield is based on an indicated distribution of HK$0.7204 per Unit for that period divided by the Maximum Offer Price and excluding all relevant transaction costs.
The indicated distribution for the period commencing 16 December 2004 to 31 March 2005 is HK$0.1976 per Unit. Full details can be found in the Offering Circular.
Cornerstone Investors and Strategic Partner
As part of the Global Offering, nine cornerstone investors have agreed to invest a total of HK$4,446 million worth of Units, comprising approximately 18.8% of the total Units in issue upon completion of the Global Offering, if the Over-allotment Option is exercised in full and based on the Maximum Offer Price. They include in alphabetical order:
American International Assurance Company (Bermuda) Limited
AMP Capital Investors Ltd.
Capital Research and Management Company
Fidelity Investments Management (Hong Kong) Limited
First State Investments (Hong Kong) Limited
Henderson Global Investors Limited
ING Clarion Real Estate Securities, L.P.
Prudential Asset Management (HK) Ltd.
Stichting Pensioenfonds ABP
The price paid by the cornerstone investors will be the same as the final offer price of the Global Offering.
In addition, CapitaLand Limited (the "Strategic Partner") has committed to investing US$180 million (based on a US$/HK$ exchange rate of 1:7.8) in Units at the final offer price. Such an investment will represent approximately 5.9% of the total Units in issue upon completion of the Global Offering, if the Over-allotment Option is exercised in full and based on the Maximum Offer Price.
Syndicate Structure
The Joint Global Coordinators are Goldman Sachs (Asia) L.L.C., The Hongkong and Shanghai Banking Corporation Limited and UBS Investment Bank. The Listing Agent and Lead Restructuring Adviser is UBS Investment Bank. The Financial Adviser to HA is JPMorgan.
Further details on the Global Offering
Offering circulars and application forms
As real estate investment trusts are a new product in Hong Kong, the Offering Circular is being made available from 25 November 2004 prior to the opening of the Hong Kong Public Offering on 6 December 2004. Application forms will only be made available once the Hong Kong Public Offering is open.
Offering Circulars will be available from 25 November 2004 to 9 December 2004 at the 63 bank branches listed in the Offering Circular.
Application forms will be available and may be submitted from 9:00 am on 6 December 2004 to 12:00 noon on 9 December 2004 at the 63 bank branches listed in the Offering Circular.
Application for Units
Completed application forms can be submitted from 9:00 am on 6 December 2004 to 12:00 noon on 9 December 2004 and must be accompanied by a cheque drawn on a Hong Kong bank account in the subscriber's name or a banker's cashier order. Application forms must be completed in English.
Applicants must pay the Maximum Offer Price of HK$10.83 per Unit, plus brokerage of 1%, Hong Kong Stock Exchange trading fee of 0.005%, SFC transaction levy of 0.005% and investor compensation levy of 0.002% in full. After the determination of the final offer price per Unit and applying the Hong Kong Public Offering discount, any surplus monies paid will be refunded to applicants without interest.
The results of allocations of Hong Kong Public Offering will be available through allocation booklets, The Link REIT's Hong Kong Public Offering hotline, The Link REIT's Hong Kong Public Offering website, and the Hong Kong Stock Exchange website. Please refer to the Offering Circular for further details.
Ticker symbol
Units will trade on the Main Board of the Stock Exchange of Hong Kong under the ticker symbol: 2382
Public Enquiry Hotline and Website
Members of the public may obtain more information on the Hong Kong Public Offering by phoning The Link REIT's Public Offering hotline on 183 3838 or by visiting The Link REIT's Public Offering website at www.linkreitipo.com.hk
Timetable
The expected timetable for the Hong Kong Public Offering is as follows:
Offering Circulars 9:00 am, Thursday,
available for collection 25 November 2004
Application forms available 9:00 am, Monday, 6
for collection and submission December 2004
to noon, Thursday, 9
December 2004
Expected price Saturday, 11 December
determination date 2004
Offer price announced Wednesday, 15 December
2004
Results of allocation Wednesday, 15 December
of Hong Kong Public 2004
Offering announced
Despatch of Unit Wednesday, 15 December
certificates 2004
First day of dealings Thursday, 16 December
in Units on the Stock 2004
Exchange of Hong Kong
Despatch of refund cheques Thursday, 16 December
2004
Disclaimer
This press release is not for distribution, directly or indirectly, into the United States, Japan or Canada. This press release is not for, and is not intended to be, an offer of securities for sale in the United States and/or any other jurisdictions nor is it an offer of, or invitation to subscribe for, securities in Hong Kong. Units of The Link REIT may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933. Any public offering of securities to be made in the United States will be made by means of a prospectus that contains detailed information about The Link REIT and its management as well as financial statements. No money, securities or other consideration is being solicited and, if sent, in response to the information contained herein, will not be accepted.
End/Wednesday, November 24, 2004.
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