CapitaLand China Trust (AU8U) Status update summary

Strategic rationale and transaction overview

• Application submitted to list a consumption-focused C-REIT on the Shanghai Stock Exchange, with CLCT, CLI, and CLD as joint strategic investors collectively subscribing to 20% of IPO units, subject to a five-year lock-up.

• CapitaMall Yuhuating (Changsha) and CapitaMall SKY+ (Guangzhou) will be contributed as seed assets by CLCT and CLI/CLD, respectively.

• The C-REIT will invest only in wholly-owned, income-producing retail assets in mainland China, targeting domestic institutional and retail investors.

• The transaction is subject to unitholders’ approval, independent valuation, regulatory reviews in Singapore and China, and market conditions.

• Proceeds from the divestment may be used to reduce leverage, conduct unit buybacks, or a combination, enhancing financial flexibility.

Strategic benefits and market positioning

• Aligns with the roadmap to transform into a diversified, multi-asset class China-focused S-REIT, enhancing portfolio diversification and financial flexibility.

• Provides access to the onshore China domestic capital market and broadens the investor base, differentiating from other S-REITs and H-REITs.

• Offers an additional channel for recycling retail assets and potential upside from C-REIT market growth.

• Participation in the C-REIT allows for capital appreciation, with consumption-related C-REITs showing post-IPO share price increases of 39%.

Portfolio and asset selection

• Yuhuating was chosen as the initial asset due to its small size (3-4% of AUM/NPI), maturity, and limited further upside, making it suitable for value unlocking and recycling.

• Future asset injections into the C-REIT are possible after a one-year regulatory clearing period, with selection based on maturity and market conditions.

• All assets in the portfolio are theoretically eligible for C-REIT injection, but size and regulatory evolution will influence timing and selection.

• Post-transaction, retail assets will comprise 75.5% of AUM, with increased exposure to business and logistics parks.