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 Chinese OA System
10 2019.12
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CHINA MERCHANTS LAND ACTS AS THE REIT MANAGER CMC REIT COMMENCES ITS FIRST DAY LISTING

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10 December 2019 - China Merchants Commercial Real Estate Investment Trust (“CMC

REIT”; stock code: 01503) commences its first day listing today. Following the successful

listing of CMC REIT, China Merchants Land Limited (“China Merchants Land” or “the

Company”, stock code: 00978) through its wholly-owned subsidiary China Merchants

Land Asset Management Co., Limited (“CMLAM”) will provide management service to

CMC REIT.

CMLAM, as the REIT manager of CMC REIT, entered into a trust deed (“Trust Deed”) with

the trustee with a term of 80 years less one day. Pursuant to the Trust Deed, CMLAM has

full discretion to deal with its duties, which include but are not limited to, managing CMC

REIT and the deposited property of the REIT in the sole interests of the unitholders of

CMC REIT, investing the deposited property only in real estate and other authorized

investments, planning the tenant mix and identifying potential tenants for the real estate,

formulating and implementing leasing strategies for the real estate, formulating distribution

payment schedules of CMC REIT, etc.

In return, CMLAM is entitled to receive, for its own account, out of the deposited property

of CMC REIT on a semi-annual basis, the base fee at the rate of 10% per annum of the

annual distributable income. The base fee shall be paid to CMLAM in the form of cash or,

at the election of CMLAM, entirely or partly in the form of units of CMC REIT. CMLAM is

also entitled to receive an acquisition fee not exceeding the rate of 1% of the acquisition

price and a divestment fee not exceeding the rate of 0.5% of the sale price of any real

estate in the form of land acquired or sold directly or indirectly by CMC REIT. After 31

December 2022, CMLAM shall also be entitled to receive, for its own account, out of the

deposited property on an annual basis, the variable fee at the rate of 25% per annum of

the difference in distributions per unit of CMC REIT in a financial year compared to the

preceding financial year, multiplied by the weighted average number of units in issue for

such financial year.

Based on the study and estimation of the market environment and needs, ChinaMerchants Land has continued to advance its strategic transformation in the past two

years. Being the REIT manager enables the Company to expand its business to REIT

management, signifying an important step in the development of its “asset-light” property

operation, while actively establishing financing channel for the whole industry chain of

investment properties.

The REIT management business of China Merchants Land mainly provides services to

REITs which own and invest in high quality income-generating commercial properties in

China. Under the REIT management business, it will set the strategic direction and risk

management policies of the REIT, and acquire and divest properties of the REIT in

accordance with its stated investment strategy. The REIT Manager will focus on improving

the value of the properties, fund raising, financial and compliance management.

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