CHINA OVERSEAS (00688.HK): Proposed spin-off of Foshan Qiandeng Lake Unicenter project into public commercial REIT for independent listing on SZSE, application submitted by ChinaAMC and CITIC Securities

NewTimeSpace News: On 7 September 2026, China Overseas Land and Investment Limited (stock code: 00688) announced that China Asset Management Co., Ltd. (ChinaAMC) and CITIC Securities Co., Ltd. had submitted application materials for the registration and listing of a publicly offered commercial real estate investment trust (REIT) public fund with the China Securities Regulatory Commission (CSRC) and the Shenzhen Stock Exchange (SZSE) on the same day. Prior to the proposed listing application, the company had submitted an application under Practice Note 15 to The Stock Exchange of Hong Kong Limited (the Exchange), together with an application for a waiver from strict compliance with paragraph 3(f) of Practice Note 15 regarding the assured entitlement requirement.

The asset underlying the proposed spin-off is the Foshan Qiandeng Lake Unicenter project, a shopping mall in Nanhai District, Foshan, Guangdong Province, China, which is currently wholly owned by a project company that is a wholly-owned subsidiary of China Overseas Enterprise Development Group Limited , an indirect wholly-owned subsidiary of the company. The public fund is currently expected to raise gross proceeds of approximately RMB 1.534 billion, and the group will subscribe for approximately 20% of the total issued fund units at the proposed listing. Under the structure, the public fund will use the proceeds to subscribe for all interests in an asset-backed special purpose plan, which will in turn acquire the entire equity interest in the project company from the group. Upon completion, the project company will be 100% held by the REIT and will cease to be a subsidiary of the company, and the REIT will not be consolidated into the company's financial accounts. The project company will enter into delegated operation service agreements with operation management institutions and pay operation management fees for such services.

The announcement noted that the proposed spin-off comprises the sale of the project to the REIT and the group's subscription for 20% of the fund units of the public fund. As all applicable percentage ratios are below 5%, the proposed spin-off is not subject to the reporting, announcement or shareholders' approval requirements under Chapter 14 of the Listing Rules. After consulting its PRC legal advisers, the company considered that providing assured entitlement to existing shareholders is not feasible due to restrictions under PRC laws and regulations. The board has resolved not to provide assured entitlement under the proposed listing and has applied for a waiver from strict compliance with paragraph 3(f) of Practice Note 15.

The company reminded that the proposed spin-off and listing are subject to, among other things, prevailing market conditions, the Exchange's approval of the Practice Note 15 application and the grant of the relevant waiver, and review and/or registration by the CSRC and the SZSE, and that there is no assurance that the proposed spin-off and the public offering of the public fund will proceed or when they will proceed. Shareholders and potential investors should exercise caution when dealing in the company's securities.

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