Tapping Opportunities in Mainland China

TO ENHANCE LONG-TERM GROWTH

「一年之計在於春」，新年伊始，謹祝各位新年進步，萬事如意！

春天是籌劃新年大計的最佳時機，對於領匯的未來發展，我們也不斷尋求突破，而擴展投資領域的策略將是一個新亮點。隨著團隊於資産管理累積了更豐富的經驗，我們正積極物色香港及以國外的物業組合，以拓展業務版圖，並透過移植管理經驗，引領集團的業務進入另一增長階段。中國內地發展迅速，是我們銳意開拓的市場。於去年12月，我們與內地房地產界龍頭企業萬科簽訂戰略合作意向書，共同尋找於內地零售物業的投資機會。

作為世界第二大經濟體的中國，國內生產總值僅次美國；隨著內地人民收入提高，中產階級快速增長，本土消費對經濟比重日增。預期中國的中產階級人數將於未來二十年倍增至6.3億人，為優質的商品及服務帶來龐大需求。從最近公布的政策方向，亦可看到政府當局透過城鎮化及各項改革措施，繼續推動經濟及金融發展的決心。

中產階級的迅速增長及城市化的急速發展為零售業帶來空前未見的商機。在兩地經貿關係日趨密切的政策配合下，不少香港的零售商戶為捕捉當地消費群迅速增長所帶來的潛在機遇，紛紛在內地尤其是珠三角地區拓展業務，而且發展策略日趨成熟。有鑑於此，領匯可望將服務中端日常生活所需商品市場的豐富經驗，作為開拓國內市場的獨特優勢，故此會考慮不同方案緊握內地投資物業市場的良機，跟萬科展開戰略合作是策略性的起步。

根據戰略合作意向書，領匯及萬科會研究在內地進行各種合作模式之可行性，共同尋找內地零售物業的適當投資機會。理想的物業宜地處中國人口稠密的社區，且位於交通樞紐上，並能為周邊地區的居民提供一站式購物體驗。我們擁有在香港投資、營運及管理商用物業的豐富經驗，而萬科一直專注於內地房地產的發展，熟悉市場，經驗豐富。是次戰略合作可讓領匯涉足屬於國內「新主流」市場和中檔市場的優質發展項目，藉著結合雙方的優勢，將為持份者創造更大價值。

領匯基金單位持有人已於2月18日的特別大會上投票通過動議，讓投資策略擴大至香港以外地區得以進行，本人謹代表整個團隊感謝他們的信賴及支持。

展望將來，我們亦會繼續完善長遠發展策略，積極考慮不同的投資方向，發掘具增長潛力和增值機會的物業和地區，令業務更上層樓。


王國龍
行政總裁│2014年2月

領匯行政總裁王國龍與萬科總裁郁亮（右）合照。
George Hongchoy,
CEO of The Link
and Yu Liang, President
of China Vanke (right).

"A year's plan starts with spring", as the old Chinese saying goes. At the beginning of the Year of the Horse, I would like wish our readers a prosperous year ahead.

Spring is the best time of the year to make plans for the future. The Link has been seeking new growth areas to further develop our business, and we have most recently begun exploring the expansion of our investment strategy. As our teams gain more experience in asset management, we are looking to expand our portfolio and take our business to a new phase of growth by securing investment opportunities in Hong Kong and beyond. The fast-growing Mainland market is a key target. We have entered into strategic cooperation with leading Mainland property developer China Vanke through a memorandum of understanding (MOU) signed in December 2013 to explore investment opportunities in retail properties in the Mainland.

As the world's second largest economy, China's GDP is second only to that of the U.S.. Growing income has given rise to a rapidly developing middle class and an economy that gives greater weight to domestic consumption. China's middle class is expected to grow to 630 million people within the next 20 years, spurring demand for quality goods and services. The Chinese government's latest policy announcements indicate that it is determined to continue driving economic growth and financial development through urbanisation and various reform measures.

The burgeoning middle class and the growth of cities are generating opportunities never seen before in the retail sector in the Mainland. Thanks to the supporting policies promoting closer economic ties between Hong Kong and the Mainland, many Hong Kong retailers have already expanded their business to the Mainland, especially to the Pearl River Delta area, allowing them to capture the growth opportunities brought about by a growing consumer base. The business strategies of these Hong Kong retailers for the Mainland market have also become more mature. Our experience in serving the mid-market segment has equipped us with the unique strength to tap the commercial property investment market in the Mainland. We will therefore consider various options to seize opportunities in that market, and the MOU with China Vanke is the first step.

According to the MOU, The Link and China Vanke will explore the feasibility of various strategic cooperation options. In addition, the two companies will jointly seek suitable retail property investment opportunities in the Mainland, which would ideally be located in densely populated communities with access to transportation networks, providing a one-stop shopping experience to residents in the surrounding catchment area. The Link has rich experience in commercial real estate investment, operation and management in Hong Kong, while China Vanke is familiar with property development and the real estate market in Mainland China. The strategic cooperation could provide us access to a high-quality pipeline of projects in Mainland China's desirable "new mainstream" market or middle-class segment, and it will create greater value for stakeholders by drawing on the strengths of both companies.

At The Link's Extraordinary General Meeting on 18 February, our unitholders approved a motion to expand our investment strategy beyond Hong Kong. On behalf of The Link, I would like to thank them for their trust and support.

Looking forward, we will continue to enhance our strategy for long-term development by exploring various investment directions and by identifying properties and regions offering the potential for growth and value enhancement, with a view to taking our business to new heights.


George Hongchoy
Chief Executive Officer │ February 2014