SHANGRI-LA ASIA (00069.HK): Nanjing Shangri-La Hotel Management Agreement Renewed for Three More Years to 2029

NewTimeSpace News: On 23 October 2026, Shangri-La Asia Limited (the "Company") announced the renewal of the hotel management agreement between Shangri-La International, a subsidiary of the Company, and the Nanjing project company in respect of the Nanjing Shangri-La hotel. The announcement referred to the 2023 announcement regarding the renewal of the hotel management agreement entered into by Shangri-La International (as manager) and the Nanjing project company (as owner), under which Shangri-La International provides hotel management services for the hotel, a hotel owned by the Nanjing project company, for a subsequent term of three years, expiring on 25 October 2026.

The announcement disclosed that, under the terms of the hotel management agreement, Shangri-La International has decided to renew it for a further three years, which will expire on 25 October 2029; all the current terms and conditions of the hotel management agreement remain unchanged. Shangri-La International is a subsidiary of the Company, and the Nanjing project company is held as to 45% by Kerry Properties, which is a subsidiary of Kerry Holdings, a substantial shareholder of the Company; accordingly, the Nanjing project company is an associate of the Company's substantial shareholder and is also a connected person of the Company. Shangri-La International will continue to provide hotel management services to the hotel, and under the Listing Rules the renewal of the hotel management agreement constitutes a continuing connected transaction of the Company.

The Company stated that, as the annual cap after the renewal is higher than 0.1% but lower than 5% of the applicable percentage ratios, the Company is required to comply with the announcement and reporting requirements under the Listing Rules but is exempt from the independent shareholders' approval requirement; details of the hotel management agreement and the actual amounts of fees will be disclosed in the Company's future annual reports and accounts in accordance with the Listing Rules. The board expects that, having regard to the hotel's expected occupancy rate, potential inflation and exchange rate movements, reasonable increases in occupancy and reasonable buffers for unforeseen occupancy and room rate increases, the fees payable for the financial years ending 31 December 2026, 2027, 2028 and 2029 will not exceed the annual caps of US$3.6 million, US$4.2 million, US$4.25 million and US$4.3 million respectively; if any of the above annual caps is exceeded, the Company will again comply with the requirements of Chapter 14A of the Listing Rules. Fees under the hotel management agreement are payable in cash and mainly comprise management fees (a fixed percentage of the hotel's annual gross operating revenue for the basic fee portion, and a specified percentage of the hotel's annual adjusted gross operating profit for the incentive portion), marketing services fees, direct sales channel fees and training fees. The board (including independent non-executive directors) considers that the pricing policy for determining the fees, including the specified percentages and fixed amounts as the basis for fee calculation, was formulated on normal commercial terms by reference to comparable fees under hotel management agreements of other hotels managed by the Group operating in Jiangsu Province in mainland China (including two hotels owned by, or with equity interests held by, third parties), and confirmed that the fees are comparable to or no less favourable than those charged by such other hotels; the board also confirmed that no director has a material interest in the hotel management agreement.