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					                                                                IMPORTANT
  If you are in any doubt about the contents of this Offering Circular, you should consult your stockbroker, bank manager, solicitor,                        App B B19(a)
  professional accountant or other independent professional adviser.




                 GZI Real Estate Investment Trust                                                                                                            App B
                                                                                                                                                             B1
                             (a Hong Kong collective investment scheme authorised under section 104
                       of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong))

                          Managed by GZI REIT Asset Management Limited
                                      GLOBAL OFFERING
Number of Units under the Global Offering                                :   583,000,000 (subject to adjustment)
Number of Units under the Hong Kong Public Offering                      :   60,000,000 (subject to adjustment and reallocation)
Number of Units under the International Offering                         :   523,000,000 (subject to adjustment and reallocation)
Maximum Offer Price                                                      :   HK$3.075 per Unit payable in full on application in Hong
                                                                             Kong dollars, plus brokerage of 1.0%, Hong Kong Stock
                                                                             Exchange trading fee of 0.005% and SFC transaction levy
                                                                             of 0.005%, subject to refund
Stock Code                                                               :   405
                                                      Joint Global Coordinators



The Hongkong and Shanghai                               Citigroup Global Markets Asia Limited                                   DBS Bank Ltd.
Banking Corporation Limited
                                                                 Listing Agent



                              The Hongkong and Shanghai Banking Corporation Limited

                                                 Financial Adviser to
                                         Guangzhou Investment Company Limited



                                                                DBS Bank Ltd.

The Securities and Futures Commission of Hong Kong, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company
Limited take no responsibility for the contents of this Offering Circular, make no representation as to its accuracy or completeness and expressly
disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Offering Circular.
The Offer Price is expected to be determined by agreement between the Joint Global Coordinators (on behalf of the Underwriters), GZI and the                 App B
Manager on the Price Determination Date. The Price Determination Date is expected to be Thursday, 15 December 2005 and, in any event, not later              B14(a)
than Monday, 19 December 2005. The Offer Price will not be more than HK$3.075 and is currently expected to be not less than HK$2.850. Applicants
for Hong Kong Public Offering Units are required to pay, on application, the Maximum Offer Price of HK$3.075 for each Hong Kong Public Offering Unit
together with brokerage of 1.0%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.005%, subject to refund if the Offer
Price should be lower than the Maximum Offer Price.
The Joint Global Coordinators (on behalf of the Underwriters, and with the consent of GZI and the Manager) may reduce the indicative Offer Price range
below that stated in this Offering Circular (which is HK$2.850 to HK$3.075 per Unit) at any time prior to the morning of the last day for lodging
applications under the Hong Kong Public Offering. In such a case, notices of the reduction in the indicative Offer Price range will be published in the
South China Morning Post (in English) and the Hong Kong Economic Times (in Chinese) not later than the morning of the day which is the last day
for lodging applications under the Hong Kong Public Offering. If applications for Hong Kong Public Offering Units have been submitted prior to the day
which is the last day for lodging applications under the Hong Kong Public Offering, then even if the indicative Offer Price range is so reduced, such
applications cannot be subsequently withdrawn. Further details are set forth in the sections headed “Structure of the Global Offering” and “How to apply
for Hong Kong Public Offering Units” in this Offering Circular.
If, for any reason, GZI, the Manager and the Joint Global Coordinators are not able to agree on the Offer Price on or before Monday, 19 December
2005, the Global Offering (including the Hong Kong Public Offering) will not proceed.
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement to subscribe for, and to procure applications for the               App B
subscription of, the Hong Kong Public Offering Units, are subject to termination by the Joint Global Coordinators (on behalf of the Hong Kong                B25
Underwriters) if certain grounds arise prior to 8:00 a.m. on the day that trading in the Units commences on the Hong Kong Stock Exchange. Such
grounds are set forth in the section headed “Structure of the Global Offering — Conditions of the Hong Kong Public Offering” in this Offering Circular.
It is important that you refer to that section for further details.


                                                                                                                           12 December 2005
KEY INVESTMENT INFORMATION AND HIGHLIGHTS
                                    EXPECTED TIMETABLE(1)

If there is any change in the following expected timetable, the Manager will issue an
announcement in Hong Kong to be published in the South China Morning Post (in English) and the
Hong Kong Economic Times (in Chinese).

Hong Kong Public Offering commences and
Application Forms available from . . . . . . . . . . . . . 9:00 a.m. on Monday, 12 December 2005

Despatch of Election Forms to
GZI Qualifying Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Monday, 12 December 2005

Application lists open(2) . . . . . . . . . . . . . . . . . . . . . .11:45 a.m. on Thursday, 15 December 2005

Latest time for GZI Qualifying Shareholders
to lodge Election Forms . . . . . . . . . . . . . . . . . . . . .12:00 noon on Thursday, 15 December 2005

Latest time to lodge Application Forms . . . . . . . . .12:00 noon on Thursday, 15 December 2005

Latest time to give electronic application
instructions to HKSCC(3) . . . . . . . . . . . . . . . . . . . .12:00 noon on Thursday, 15 December 2005

Application lists close . . . . . . . . . . . . . . . . . . . . . . .12:00 noon on Thursday, 15 December 2005

Expected Price Determination Date(4) . . . . . . . . . . . . . . . . . . . . . .Thursday, 15 December 2005

Announcement of the Offer Price, the level of
indications of interest in the International Offering,
the results of applications in the Hong Kong Public
Offering (with successful applicants’ identification
document numbers), the basis of allocations of the
Hong Kong Public Offering Units and the final number
of Hong Kong Public Offering Units comprised in
the Hong Kong Public Offering, Pool A and Pool B,
respectively, as well as the details of exercise, if any,
of the GZI Qualifying Shareholders’ Option, to be published
in the South China Morning Post (in English) and
the Hong Kong Economic Times (in Chinese) on or before . . . . . .Tuesday, 20 December 2005

Despatch of Unit certificates in respect of wholly
or partially successful applications as well as to GZI
Qualifying Shareholders who have elected to retain
the Units distributed to them pursuant to
the Special Dividend (either in whole or in part) on(5) . . . . . . . . . . .Tuesday, 20 December 2005

Despatch of refund cheques in respect of wholly or
partially unsuccessful applications, on or before(6)(7) . . . . . . . . . . .Tuesday, 20 December 2005

Dealings in Units on the Hong Kong Stock
Exchange to commence on . . . . . . . . . . . . . . . . . . . . . . . . . . . .Wednesday, 21 December 2005

Despatch of cheques to GZI Qualifying Shareholders
who file valid Election Forms and GZI Ineligible
Overseas Shareholders on or about(8) . . . . . . . . . . . . . . . . . . . . . .Thursday, 29 December 2005



                                                       i
                                          EXPECTED TIMETABLE(1)


Notes:

(1)   All times refer to Hong Kong local time, except where otherwise stated. Details of the structure of the Global Offering,
      including conditions of the Hong Kong Public Offering, the Special Dividend and the GZI Qualifying Shareholders’
      Option, are set out in the section headed “Structure of the Global Offering” in this Offering Circular.

(2)   If there is a “black” rainstorm warning or a tropical cyclone warning signal number 8 or above in force in Hong Kong
      at any time between 9:00 a.m. and 12:00 noon on Thursday, 15 December 2005, the application lists will not open
      on that day. See the section headed “How to apply for Hong Kong Public Offering Units — When to apply for the Hong
      Kong Public Offering Units — Effect of bad weather conditions on the opening of the application lists” in this Offering
      Circular for further information.

(3)   Applicants who apply by giving electronic application instructions to HKSCC should refer to the section headed “How
      to apply for Hong Kong Public Offering Units — How to apply by giving electronic application instructions to HKSCC”
      in this Offering Circular.

(4)   The Price Determination Date for the purposes of the Global Offering is expected to be on or about Thursday, 15
      December 2005. Notwithstanding that the Offer Price may be fixed at below the Maximum Offer Price, applicants
      who apply for Hong Kong Public Offering Units must pay on application the Maximum Offer Price of HK$3.075 per
      Unit together with the brokerage of 1.0%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction
      levy of 0.005%. Such applicants will be refunded the surplus application monies, if any, in accordance with the
      section headed “Further Terms and Conditions of the Hong Kong Public Offering — Refund of Money — Additional
      Information” in this Offering Circular.

(5)   Applicants who apply for 500,000 or more Hong Kong Public Offering Units and who have indicated in their
      Application Forms their wish to collect Unit certificates (where applicable) or refund cheques (where applicable) in
      person may do so from the Unit Registrar, Tricor Investor Services Limited, from 9:00 a.m. to 1:00 p.m. on Tuesday,
      20 December 2005 in the case of collection of Unit certificates, or from 9:00 a.m. to 1:00 p.m. on Tuesday, 20
      December 2005, in the case of collection of refund cheques, (or any other dates notified by the Manager in the South
      China Morning Post (in English) and the Hong Kong Economic Times (in Chinese) as the date of despatch and
      availability of Unit certificates and refund cheques). Applicants being individuals who opt for personal collection
      cannot authorise any other person to make collection on their behalf. Applicants being corporations who opt for
      personal collection must attend by personal authorised representatives each bearing a letter of authorisation from
      the corporation stamped with the corporation’s chop. Both individuals and authorised representatives (if applicable)
      must produce, at the time of collection, evidence of identity acceptable to the Unit Registrar. Uncollected Unit
      certificates and refund cheques will be despatched by ordinary post to the addresses specified in the relevant
      Application Forms at the applicants’ own risk. Details of the arrangements are set out in the section headed “How
      to apply for Hong Kong Public Offering Units” in this Offering Circular.


      Unit certificates will be despatched to GZI Qualifying Shareholders who have elected to retain the Units conditionally
      distributed to them pursuant to the Special Dividend by ordinary post to the addresses specified in their respective
      Election Forms at their own risk.


(6)   Refund cheques will be issued in respect of wholly or partially unsuccessful applications and in respect of successful
      applications if the Offer Price is less than the Maximum Offer Price.


(7)   Part of the Hong Kong identity card number/passport number of an applicant, or, if there are joint applicants, part
      of the Hong Kong identity card number/passport number of the first-named applicant, provided by the respective
      applicant may be printed on the refund cheque, if any. Such data would also be transferred to a third party for refund
      purposes. The banker of the respective applicant may require verification of his/her Hong Kong identity card
      number/passport number before encashment of the refund cheque. Inaccurate completion of Hong Kong identity
      card number/passport number may lead to delay in encashment of or may invalidate the refund cheque.




                                                             ii
                                        EXPECTED TIMETABLE(1)

(8)   Cheques for cash payments to GZI Qualifying Shareholders who file valid Election Forms will be despatched to such
      persons by ordinary post to the addresses specified in their respective Election Forms at their own risk. Cheques for
      cash payments to GZI Ineligible Overseas Shareholders will be despatched to such persons by ordinary post to their
      respective addresses as then shown on the register of members of GZI at their own risk.


Unit certificates are expected to be issued by Tuesday, 20 December 2005, but will only
become valid at 8:00 a.m. on Wednesday, 21 December 2005, provided that (i) the Global
Offering has become unconditional in all respects; and (ii) the right of termination as
described in the section headed “Underwriting — Underwriting Arrangements and
Expenses” in this Offering Circular has not been exercised.


Prospective investors of the Hong Kong Public Offering Units and the International Offering
Units and GZI Shareholders should note that the Underwriters are entitled to terminate their
obligations under the Underwriting Agreements by notice in writing to be given by the Joint
Global Coordinators (acting on behalf of the Underwriters) upon the occurrence of any of
the events set forth under “Grounds for Termination” in the section headed “Underwriting”
in this Offering Circular at any time prior to 8:00 a.m. (Hong Kong time) on the Listing Date
(the “Termination Time”). Such events include, but are not limited to, any act of God,
military action, riot, public disorder, civil commotion, fire, flood, explosion, epidemic,
terrorism, strike or lock-out. Accordingly, any unit certificate relating to the Hong Kong
Public Offering Units and the International Offering Units issued by GZI REIT or deposited
into CCASS prior to the Termination Time will not constitute evidence of title to any Hong
Kong Public Offering Units or International Offering Units nor will the same constitute
evidence of title to the Units conditionally distributed to GZI Qualifying Shareholders
pursuant to the Special Dividend. Any person who trades the Units on the basis of publicly
available allocation results or pursuant to the Special Dividend prior to the Termination
Time will do so entirely at their own risk.


This Offering Circular is being distributed in electronic format on CD-ROM to the GZI
Qualifying Shareholders only in their capacity as such. The CD-ROM may not be
reproduced, redistributed or passed on, directly or indirectly, to any other person or
published, in whole or in part, for any purpose.




                                                            iii
                                 EXPECTED TIMETABLE(1)

Neither the CD-ROM nor any of its contents is, in that context, an offer of securities for sale in any
country or jurisdiction. Neither the CD-ROM nor any of its contents may be distributed in any
jurisdiction outside Hong Kong (other than to GZI Qualifying Shareholders in Australia, Macau,
Spain and the United Kingdom) or distributed, directly or indirectly, in any jurisdiction outside Hong
Kong (other than to GZI Qualifying Shareholders in Australia, Macau, Spain and the United
Kingdom), or distributed or redistributed in any jurisdiction outside Hong Kong or to any resident
thereof (in each case other than to GZI Qualifying Shareholders in Australia, Macau, Spain and the
United Kingdom). GZI Qualifying Shareholders may obtain a printed copy of this Offering Circular
from any of the following locations during normal business hours (unless otherwise indicated):


•    GZI’s share registrar, Abacus Share Registrars Limited, during business hours at Ground
     Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong


•    any of the designated branches of the Receiving Banks and at the times set out in the section
     headed “How to apply for Hong Kong Public Offering Units — Where to collect the Offering
     Circular and the Application Forms” in this Offering Circular


•    the following offices of the Joint Global Coordinators:


     The Hongkong and Shanghai Banking Corporation Limited
     1 Queen’s Road Central
     Central
     Hong Kong


     Citigroup Global Markets Asia Limited
     50th Floor, Citibank Tower
     Citibank Plaza
     3 Garden Road
     Central
     Hong Kong


     DBS Bank Ltd.
     22nd Floor, The Center
     99 Queen’s Road Central
     Central
     Hong Kong


•    the following two locations designated by Goldbond Capital (Asia) Limited:


     3902B, 39th Floor
     Tower 1, Lippo Centre
     89 Queensway
     Hong Kong




                                                  iv
                               EXPECTED TIMETABLE(1)

    Unit 2305-06, 23rd Floor
    City Landmark 1
    68 Chung On Street
    Tsuen Wan
    New Territories
    Hong Kong


•   GZI’s registered office located at 24th Floor, Yue Xiu Building, 160 Lockhart Road, Wanchai,
    Hong Kong




                                              v
                                                      CONTENTS

KEY INVESTMENT INFORMATION AND HIGHLIGHTS
   EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               i
   CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    vi
   OFFERING CIRCULAR SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          1
   THE GLOBAL OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               29
   INFORMATION ABOUT THIS OFFERING CIRCULAR AND THE
     GLOBAL OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             35
   PARTIES INVOLVED IN THE GLOBAL OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . .                                   39
   RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        43
   USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             66
   OWNERSHIP OF UNITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              67
   DISTRIBUTION POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             69
   STRATEGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    71

THE PROPERTIES AND THE REORGANISATION
   THE PROPERTIES AND BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         77
   THE REORGANISATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             125

FINANCIAL INFORMATION AND FORECAST
   SELECTED FINANCIAL AND OPERATING INFORMATION . . . . . . . . . . . . . . . . . . . .                                         127
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
      AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       133
   MANAGER’S DISCUSSION AND ANALYSIS OF FUTURE OPERATIONS . . . . . . . . .                                                     167
   PROFIT FORECAST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          173
   UNAUDITED PRO FORMA BALANCE SHEETS OF GZI REIT . . . . . . . . . . . . . . . . . .                                           188
   STATEMENT OF DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     190

STRUCTURE, MANAGEMENT AND AGREEMENTS
   STRUCTURE AND ORGANISATION OF GZI REIT . . . . . . . . . . . . . . . . . . . . . . . . . .                                   192
   THE MANAGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      193
   THE LEASING AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             209
   CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     216
   THE TRUST DEED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         224
   MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING
      TO GZI REIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   237
   CONNECTED PARTY TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                           260
   MODIFICATIONS, WAIVERS AND LICENSING CONDITIONS . . . . . . . . . . . . . . . . . .                                          277



                                                               vi
                                                       CONTENTS

OTHER INFORMATION
   TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   279
   UNDERWRITING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         284
   STRUCTURE OF THE GLOBAL OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                 290
   EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    303
   HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS . . . . . . . . . . . . . . .                                                 304
   FURTHER TERMS AND CONDITIONS OF THE HONG KONG
    PUBLIC OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             319

DEFINITIONS
   TECHNICAL TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            336
   GENERAL TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          338

APPENDICES

   APPENDIX I              —      AUDITED FINANCIAL STATEMENTS OF
                                   THE PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                I-1

   APPENDIX II             —      AUDITED FINANCIAL STATEMENTS OF
                                   THE BVI COMPANIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  II-1

   APPENDIX III            —      UNAUDITED PRO FORMA BALANCE SHEET OF
                                   GZI REIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       III-1

   APPENDIX IV             —      PROFIT FORECAST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               IV-1

   APPENDIX V              —      LETTER FROM THE INDEPENDENT PROPERTY VALUER
                                    IN RELATION TO RENTAL INCOME . . . . . . . . . . . . . . . . . . .                            V-1

   APPENDIX VI             —      INDEPENDENT PROPERTY VALUATION REPORT . . . . . . . . .                                         VI-1

   APPENDIX VII            —      INDEPENDENT PROPERTY VALUER’S BUILDING
                                    CONDITION SURVEY SUMMARY REPORT . . . . . . . . . . . . . VII-1

   APPENDIX VIII —                INDEPENDENT MARKET RESEARCH REPORT IN
                                    RELATION TO THE GUANGZHOU COMMERCIAL
                                    PROPERTY MARKET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-1

   APPENDIX IX             —      OVERVIEW OF RELEVANT LAWS AND REGULATIONS
                                   IN THE PEOPLE’S REPUBLIC OF CHINA AND
                                   COMPARISION OF CERTAIN ASPECTS OF ITS
                                   PROPERTY LAWS WITH THE LAWS OF HONG KONG . . . .                                               IX-1

   APPENDIX X              —      DETAILS OF TENANCIES WITH CONNECTED PERSONS . . .                                               X-1

   APPENDIX XI             —      GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   XI-1



                                                                vii
                            OFFERING CIRCULAR SUMMARY


 The following summary is derived from, and should be read in conjunction with, the full text of
 this Offering Circular.

 Statements contained in this summary that are not historical facts may be forward looking
 statements. Such statements are based on certain assumptions. While the Manager and the
 Listing Agent consider such assumptions to be reasonable, there are certain risks and
 uncertainties which could cause actual results to differ materially from those projected. Under
 no circumstances should the inclusion of such information herein be regarded as a
 representation, warranty or prediction with respect to the accuracy of the underlying
 assumptions by the GZI Group, the Manager, GZI REIT, the Trustee, the Listing Agent, the
 Underwriters or any person involved in the Global Offering, or that these results will be achieved
 or are likely to be achieved. Capitalised terms not defined in this summary are defined in the
 section headed “Definitions” of this Offering Circular.

 The Manager and the Directors collectively and individually accept full responsibility for the           AppB
                                                                                                          B26
 accuracy of the information contained in this Offering Circular and confirm, having made all
 reasonable enquiries, that to the best of their knowledge and belief there are no other facts the
 omission of which would make any statement herein misleading.

 In this Offering Circular, the most up to date operational data in respect of the Properties have
 been provided, unless otherwise stated, as at the latest practicable date for the compilation of
 such data, being 30 September 2005.

 An investment in the Units involves risks. Investors’ attention is drawn to the section headed
 “Risk Factors” in this Offering Circular.

Description of a Real Estate Investment Trust


      A real estate investment trust is a collective investment scheme constituted as a unit trust that
invests primarily in income producing real estate assets and uses the income to provide returns
to its unitholders. Purchasing a unit in a real estate investment trust allows investors to share the
benefits and risks of owning the real estate assets held by the real estate investment trust. An
investment in the units of a real estate investment trust in Hong Kong is governed primarily by the
REIT Code and offers the following benefits:


     •    certainty as to business focus, as a real estate investment trust does not have the
          discretion to diversify outside of the real estate sector or to own significant non-real
          estate assets;


     •    a distribution which is required by the REIT Code to be at least 90.0% of the real estate
          investment trust’s audited net income after tax for each financial year (subject to
          adjustments allowed under the REIT Code and their trust deed);


     •    a conservative capital structure with the REIT Code limiting the borrowings of a real
          estate investment trust to 45.0% of the total gross asset value thereof;



                                                  1
                           OFFERING CIRCULAR SUMMARY

     •    enhanced liquidity in comparison to direct investments in real estate;

     •    a manager licensed and regulated on an ongoing basis by the SFC; and

     •    a statutory and regulatory corporate governance framework and an internal corporate
          governance framework overseen by an independent trustee.

Objectives of GZI REIT                                                                                RC 7.1


     The Manager’s key objective for GZI REIT is to provide Unitholders with stable distributions
per Unit with the potential for sustainable long term growth of such distributions. The Manager
intends to accomplish this objective through investing in income producing real estate which is
primarily used for office, retail and other commercial purposes, initially in Guangdong province in
the PRC.

      Paragraph 7 of the Listing Agreement entered into pursuant to the Listing Rules provides that
the Trustee and the Manager (as an operator of a collective investment scheme) undertake, so far
as it lies within their respective powers, to procure that the investment strategy of GZI REIT, as
stated in this Offering Circular, will be adhered to for three years from the date of this Offering
Circular, unless otherwise exempted or approved by the SFC.

Investment Objective and Policy

      The Manager’s investment objective for GZI REIT is to invest in properties in Guangdong
province in the PRC. In pursuing its investment objective, the Manager will adopt the following
policies:

     •    unless Unitholders approve otherwise by Special Resolution at a meeting convened by
          the Manager, investments will initially be in real estate in Guangdong province;

     •    investments will be in properties for the long term; and

     •    investments will be in a diverse portfolio of sustainable income producing properties
          which are used primarily for office, retail and other commercial purposes.

Key Investment Highlights

     The Manager believes that an investment in GZI REIT presents Unitholders with an attractive
investment proposition by virtue of:

     •    Being the first real estate investment trust offering exposure to Guangzhou’s economic
          growth:

          GZI REIT is the first real estate investment trust which invests in Guangzhou. An
          investment in GZI REIT gives investors the opportunity to access the returns from a
          portfolio of commercial properties located in Guangzhou, with the additional benefit of
          liquidity associated with investing in a listed vehicle.



                                                2
                     OFFERING CIRCULAR SUMMARY

    Guangzhou is located along the Pearl River and is the capital city as well as the
    economic, scientific and cultural centre of Guangdong province. The Guangzhou
    economy is the PRC’s third largest city level economy and has a growth rate which
    consistently outperformed both Beijing and Shanghai over the past decade. The
    Guangzhou economy enjoyed double-digit growth in the past 15 years, averaging 15.3%
    per annum. In 2004, the city posted a 15.0% year-on-year increase in real term GDP.
    With continued buoyant fixed asset investment, solid domestic demand, robust trade
    activities and high inflows of foreign direct investments, the outlook of the economy
    remains positive.


    Although the macroeconomic adjustment measures recently introduced by the PRC
    Government (such as stiffer rules for bank loans to industries considered to be
    overheated and, in relation to the PRC property market, a tax on all properties sold
    within two years of being purchased and occupied, limiting monthly mortgage payments
    to 50.0% of an individual borrower’s monthly income and limiting all debt service
    payments of an individual borrower to 55.0% of his monthly income) are likely to slow
    down the rate of expansion across all major cities in the PRC, the Guangzhou Municipal
    People’s Government has projected that the city will maintain its double-digit GDP
    growth rate for the next five years, with a 12.0% real term increase in 2005. (See
    Appendix VIII to this Offering Circular for more information about the economy of
    Guangzhou.)


    These factors have combined to increase demand for commercial properties in
    Guangzhou and the Properties are well positioned to benefit from such demand. The
    Manager believes that in such an economic environment, GZI REIT has considerable
    potential for growth.


•   A strategy to provide regular and stable distributions:


    The Manager’s policy is to distribute to Unitholders as distributions an amount equal to
    100.0% of GZI REIT’s Total Distributable Income for each of FY2006 to FY2008 and
    thereafter at least 90.0% of annual Total Distributable Income.


    Under the Trust Deed, the Manager must, subject to applicable law, ensure that at least
    one distribution shall be made in respect of each Financial Year and paid no later than
    the date five calendar months following the end of the relevant Financial Year. The
    Manager’s initial distribution policy is that two distributions will be made in respect of
    each Financial Year, being distributions with respect to the six-month periods ending 30
    June and 31 December. The Directors anticipate that the interim and final distributions
    will be paid in November and May, respectively. However, GZI REIT’s distribution for the
    period from the Listing Date to 31 December 2005 will be paid together with its
    distribution for the period from 1 January 2006 to 30 June 2006 on or before 30
    November 2006.



                                           3
                     OFFERING CIRCULAR SUMMARY

    In respect of the Forecast Year 2006, Unitholders will be paid, in the absence of
    unforeseen circumstances, total distributions per Unit of not less than HK$0.201,
    representing a distribution yield of 6.54% based on the Maximum Offer Price (excluding
    other transaction costs) and 7.05% based on the Minimum Offer Price (excluding other
    transaction costs). Any shortfall in distributions will be disclosed in GZI REIT’s audited
    accounts for the Forecast Year 2006.


    The forecast distribution yields above are calculated based on the Maximum Offer Price
    and the Minimum Offer Price, excluding other transaction costs. The yield obtained by
    investors who purchase Units in the secondary market at a market price that differs from
    such prices (excluding other transaction costs), calculated using such secondary market
    purchase price, will accordingly differ from the distribution yields stated above.


    (See the sections headed “Distribution Policy” and “Statement of Distributions” in this
    Offering Circular.)


•   The Manager’s and Leasing Agents’ experienced and professional teams:


    The Manager believes that Unitholders will benefit from the experience of key staff
    members of the Manager in the Guangzhou commercial property market as well as the
    strengths and experience in leasing, marketing and tenancy management of the
    Leasing Agents.


    The Manager is staffed by experienced professionals who have extensive experience in
    the real estate industry in Guangzhou. The Manager’s key staff members have in-depth
    real estate investment, asset management, research and equity securities market
    experience. Moreover, the Manager can tap on the expertise and experience of Jones
    Lang LaSalle Limited, the Property Adviser. The Property Adviser is a leading global
    provider of integrated real estate and money management services, with offices in more
    than 100 markets on five continents.


    The Leasing Agents are also staffed by experienced professionals who have extensive
    experience in the leasing, marketing and tenancy management of commercial space in
    Guangzhou. Each of the Leasing Agents has a track record of more than seven years
    in the leasing, marketing and tenancy management business. Moreover, White Horse
    Property Management Company has been the dedicated leasing agent for White Horse
    Building since 1998 and was (and continues to be) instrumental in formulating the
    market positioning of the property. Its in-depth knowledge of White Horse Building as
    well as its tenants has been key to establishing the successful operations of the
    property.




                                           4
                     OFFERING CIRCULAR SUMMARY

•   Opportunities and a strategy for future growth through active asset management:


    The Manager will endeavour to increase the property yield of GZI REIT’s property
    portfolio and, correspondingly, the NAV per Unit by actively managing the portfolio. The
    measures which the Manager intends to take include:


    —    optimising rental and occupancy rates through managing lease renewals
         effectively, diligently pursuing leasing opportunities and maximising tenant
         retention;


    —    strengthening the Properties’ competitive positions through:


         —    in the case of the White Horse Units, capitalising on and continuing to develop
              White Horse Building’s status as one of the premier garment wholesale and
              retail markets in the PRC; and


         —    developing cost synergies and exploiting economies of scale in the
              operations of the Properties to offer tenants and shoppers better services and
              facilities at lower costs;


    —    developing and promoting a sought after position for the Properties by leveraging
         on their prime locations as well as their good access to major roads and public
         transportation facilities; and


    —    capitalising on Guangzhou’s position as one of the economic centres of southern
         PRC to attract financial institutions, multi-national corporations and reputable PRC
         companies to set up offices and shops in the Properties.




                                           5
                     OFFERING CIRCULAR SUMMARY

•   Opportunities and a strategy for future growth through acquisitions:


    The Manager will focus on properties which are primarily used for office, retail and other
    commercial purposes, initially in Guangdong province. It will seek to acquire properties
    that will provide attractive cash flows and yields together with opportunities for further
    revenue growth through operational optimisation. Portfolio growth opportunities for GZI
    REIT are underpinned by:


    —    the right of first refusal granted by GZI to GZI REIT, conditional on listing of the
         Units on the Hong Kong Stock Exchange, to acquire any completed Grade A office
         or commercial buildings in Guangzhou that (i) fulfils (or would reasonably be
         regarded as fulfilling) the investment criteria and property characteristics, and is
         consistent (or would reasonably be regarded as being consistent) with the
         investment strategy of the Manager, for property investments by GZI REIT (as
         stated in this Offering Circular); (ii) is owned or developed by the GZI Group and
         in which the GZI Group has an ownership interest of 95.0% or more (and, in
         circumstances in which GZI is able to negotiate and agree terms with the relevant
         joint venture party so as to extend the coverage of the right of first refusal granted
         by GZI to include the relevant property that is the subject of that joint venture, that
         relevant property); (iii) has a value of US$20.0 million or more (as determined by
         an independent property valuer); and (iv) GZI proposes to dispose of to a third
         party or parties. This right of first refusal will commence on the Listing Date and
         continue until the earliest of the following occurring: (a) the expiry of five years
         after the Listing Date; (b) the Units ceasing to be listed on the Hong Kong Stock
         Exchange; and (c) the entity which is the asset manager of GZI REIT ceasing for
         whatever reason to be a subsidiary of any member of the GZI Group or the Yue Xiu
         Group (see the section headed “Material Agreements and Other Documents
         Relating to GZI REIT — Deed of Right of First Refusal” in this Offering Circular”);


    —    the flexibility of GZI REIT to seek investment opportunities from property
         developers or vendors other than GZI; and


    —    the scale of the Manager’s existing network of relationships in Guangdong
         province, which helps it to identify and source acquisition targets.




                                           6
                       OFFERING CIRCULAR SUMMARY

As at the Latest Practicable Date, the portfolio of properties which fall within the
parameters of the right of first refusal granted by GZI include:

                                                                                                      Expected
Property                                                    Description(1)                           completion

Yue Xiu New Metropolis              A commercial property of approximately 86,000 sq.m.                 2006
                                    being developed above the underground metro station on
                                    the No. 1 metro line in Guangzhou.

The two office tower blocks         Victory Plaza is an integrated retail and office complex            2007
  currently being constructed       located at Ti Yu Xi Road in the Tian He District in
  above the Victory Plaza           Guangzhou. The East tower will have an area of
  podium                            approximately 58,823 sq.m. and the West tower will have
                                    an area of approximately 30,772 sq.m. GZI is currently in
                                    negotiations with a prospective purchaser of the East
                                    tower. As such, the East tower will fall within the
                                    parameters of the right of first refusal only to the
                                    extent that it is not sold prior to the completion of its
                                    construction.

Asian-Pacific Century Plaza         An integrated hotel and commercial property of                      2008
                                    approximately 223,900 sq.m. under development at Tian
                                    He North Road in Guangzhou. Only the commercial
                                    portion of this development falls within the
                                    parameters of the right of first refusal.

West tower of Mega-Twin             An integrated office, retail and hotel complex of                2009-2010
  Commercial Tower                  approximately 400,000 sq.m. to be developed in the Pearl
                                    River New City in Guangzhou near the No.3 metro line.
                                    Only the commercial portion of this development falls
                                    within the parameters of the right of first refusal.




Note:

(1)     The descriptions of the properties are based on GZI’s current plans and are subject to finalisation in due
        course.


The acquisition of any of these properties pursuant to the right of first refusal is subject
to the satisfaction of the terms and conditions thereunder and compliance with
applicable requirements of the REIT Code at the relevant time (including, where
relevant, the requirement for Unitholders’ approval).




                                                  7
                          OFFERING CIRCULAR SUMMARY

    •    Substantial alignment of the Manager’s interest with the interests of public Unitholders:


         The fees payable to the Manager have an element which is designed to align the
         interests of the Manager with those of the public Unitholders, and which provides the
         Manager with an incentive to grow revenues and minimise operating costs. Under the
         Trust Deed, the Manager is entitled to receive, among others, a service fee of 3.0% per
         annum of Net Property Income. (See the sub-section headed “Certain Fees —
         Manager’s Fees” below.)


    •    Substantial alignment of GZI’s interests with the interests of public Unitholders:


         On the Listing Date, GZI will hold approximately 40.0% of the Units in issue (or
         approximately 31.3% if the Over-allocation Option is exercised in full). GZI has agreed
         to a six-month lock-up period from and including the Listing Date in respect of the
         disposal of Units, subject to certain exceptions (see the sections headed “Ownership of
         Units” and “Underwriting — Lock-up Arrangements” in this Offering Circular). GZI has
         informed the Manager that GZI currently intends to be a long term investor in GZI REIT
         beyond the expiry of its lock-up period.


         GZI’s interests are further aligned with the interests of public Unitholders given that GZI
         is the parent company of the Manager.


    •    A regulatory structure which requires GZI REIT:


         —    to invest primarily in real estate, with the aim of providing returns to Unitholders
              derived from the rental income from such real estate;


         —    to distribute at least 90.0% of its audited net income after tax for each Financial
              Year (subject to adjustments allowed under the REIT Code and the Trust Deed);


         —    to maintain a prudent capital structure with a ratio of aggregate borrowings to total
              gross assets not exceeding 45.0%;


         —    not to trade actively in real estate; and


         —    not to invest in vacant land or engage in property development.                          RC 7.2



      See also the sections headed “Strategy”, “The Manager”, “The Leasing Agents” and
“Corporate Governance” in this Offering Circular for further details of these key investment
highlights.




                                                8
                                 OFFERING CIRCULAR SUMMARY

The Properties                                                                                                              App B
                                                                                                                            B2 (i)

                                                                    (1)
                                                  White Horse Units
 Address of White Horse Building (          )              Nos. 14, 16 and 18 Zhan Nan Road, Yue Xiu District,
                                                           Guangzhou, the PRC (                                 14, 16
                                                             18 )
 Description                                               The White Horse Building is a multi-storey commercial
                                                           building with a total of eight levels above ground, a lower
                                                           ground level and a basement comprising a car park.


                                                           The White Horse Units consist of nine strata units in part of
                                                           the lower ground level as well as the 2nd to 9th storeys of
                                                           the building, accounting, in aggregate, for 81.4% of the total
                                                           Gross Floor Area of White Horse Building. Of the remaining
                                                           Gross Floor Area, 9.2% (comprising the car park) is owned
                                                           by White Horse JV (a subsidiary of GZI, and therefore a
                                                           connected person of GZI REIT) and 9.4% (comprising the
                                                           lower ground level) is owned by an unrelated third party.


 Year of completion of original construction of            1990 (The building was renovated and expanded thereafter
 White Horse Building                                      between 1995 and 1997 as well as between 1998 and
                                                           2000.)(2)
 Term of land use right                                    40 years (till 2045) or 50 years (till 2055), depending on the
                                                           use to which each of the strata units is put(3).
 Occupancy
 - as at 30 September 2005                                 -   Wholesale/retail 100.0%
                                                           -   Office/warehouse 100.0%
 - average for the nine months ended 30 September          -   Wholesale/retail 100.0%
   2005                                                    -   Office/warehouse 100.0%
 Gross Rentable Area (as at 30 September 2005)
 - Wholesale/retail                                        - 45,157.6 sq.m.
 - Office/warehouse                                        - 3,849.6 sq.m.
 - Total                                                   - 49,007.2 sq.m.
 Number of tenants (as at 30 September 2005)               969 (with 1,311 leases)
 Top five tenants in terms of monthly base rent for             (Xu Xin),      (Chen Shuang Xia),     (Xie Li Na),
 September 2005                                                   (Yao Zhan Hao) and       (Wu Hua Ying).(4)

                                                           Together, these tenants accounted for 3.4% of the total
                                                           monthly base rent of the White Horse Units for September
                                                           2005.
 Appraised Value (as at 30 September 2005)(5)              HK$2,541.5 million
 Gross Turnover
 - FY2004                                                  - HK$104.7 million
 - Six months ended 30 June 2005                           - HK$65.9 million



Notes:

(1)   Unless otherwise indicated, information in this table relates to the White Horse Units rather than to White Horse
      Building as a whole.

(2)   See the section headed “The Properties and Business — White Horse Units — Description” in this Offering Circular
      for further information of such renovation and expansion works.

(3)   See the section headed “The Properties and Business — Terms of Land Use Rights” in this Offering Circular for a
      further explanation.

(4)   None of these persons are connected persons of GZI REIT.

(5)   As determined by the Independent Property Valuer in its valuation report dated 12 December 2005 (see Appendix
      VI to this Offering Circular).




                                                           9
                                 OFFERING CIRCULAR SUMMARY

                                                                          (1)
                                                 Fortune Plaza Units
 Address of Fortune Plaza (         )                      Nos. 114, 116 and 118 Ti Yu Dong Road, Tian He District,
                                                           Guangzhou, the PRC (                                114,
                                                           116 118 )
 Description                                               Fortune Plaza Building is a mixed use Grade A commercial
                                                           building with two tower blocks above a six-storey podium
                                                           and two levels of underground car parks.

                                                             The Fortune Plaza Units comprise 35 strata units in the
                                                             West tower, 43 strata units in the East tower and five strata
                                                             units in the six-storey podium, together accounting for
                                                             50.2% of the total Gross Floor Area of Fortune Plaza. Of the
                                                             remaining Gross Floor Area, 15.5% (comprising certain
                                                             units in the podium(2) and the West tower, a clubhouse and
                                                             the car park) is owned by GCCD (a subsidiary of GZI, and
                                                             therefore a connected person of GZI REIT) and 34.3% is
                                                             owned by unrelated third parties.


 Year of completion of construction of Fortune Plaza         2003
 Term of land use right                                      40 years (till 2042) or 50 years (till 2052), depending on the
                                                             use to which each of the strata units is put(3).
 Occupancy
 - as at 30 September 2005                                   -   Retail   14.9%(4)
                                                             -   Office   83.5%
 - average for the nine months ended 30 September            -   Retail   90.5%
   2005                                                      -   Office   63.3%
 Gross Rentable Area (as at 30 September 2005)
 - Retail                                                    - 3,853.1 sq.m.
 - Office                                                    - 36,503.1 sq.m.
 - Total                                                     - 40,356.2 sq.m.
 Number of tenants (as at 30 September 2005)                 48 (with 53 leases)
 Top five tenants in terms of monthly base rent for                                        (HSBC     Electronic    Data
 September 2005                                              Processing (Guangdong) Limited),
                                                             (Alibaba (China) Technology Co., Ltd.),
                                                                                 (Nei Meng Gu Yi Lin Mu Ye Co., Ltd.),
                                                                                                      (China    National
                                                             Petroleum Co., Ltd.) and
                                                             (Jia De Shi (China) Investment Co., Ltd.).(5)
                                                             These tenants are located in the office component of the
                                                             Fortune Plaza Units and together accounted for 43.0% of
                                                             the total monthly base rent of the Fortune Plaza Units for
                                                             September 2005.
 Appraised Value (as at 30 September 2005)(6)                HK$545.0 million
 Gross Turnover
 - FY2004                                                    - HK$9.0 million
 - Six months ended 30 June 2005                             - HK$13.3 million


Notes:
(1)   Unless otherwise indicated, information in this table relates to the Fortune Plaza Units rather than to Fortune Plaza
      as a whole.
(2)   GCCD has signed a memorandum of understanding with a third party to sell these podium units (which account for
      0.6% of the total Gross Floor Area of Fortune Plaza).
(3)   See the section headed “The Properties and Business — Terms of Land Use Rights” in this Offering Circular for a
      further explanation.
(4)   The occupancy rate as at 30 September 2005 was lower than the average occupancy rate for the nine months ended
      30 September 2005 due to the early termination of a large lease in September 2005. As at 31 October 2005, the
      occupancy rate was 82.0% due to two new tenants taking up part of the vacated space.
(5)   Save for HSBC Electronic Data Processing (Guangdong) Limited, an associate of the Trustee, none of these persons
      are connected persons of GZI REIT.
(6)   As determined by the Independent Property Valuer in its valuation report dated 12 December 2005 (see Appendix
      VI to this Offering Circular).




                                                           10
                                 OFFERING CIRCULAR SUMMARY

                                                                              (1)
                                            City Development Plaza Units
 Address of City Development Plaza (          )           Nos. 185, 187 and 189, Ti Yu Xi Road, Tian He District,
                                                          Guangzhou, the PRC (                                  185,
                                                          187 189 )
 Description                                              City Development Plaza is a mixed used Grade A
                                                          commercial building with a single tower block above a
                                                          five-storey podium and two levels of underground car parks.


                                                             City Development Plaza Units comprise six strata units in
                                                             the first three storeys of the podium as well as 159 strata
                                                             units in the single tower block, together accounting for
                                                             57.3% of the total Gross Floor Area of City Development
                                                             Plaza. Of the remaining Gross Floor Area, 36.8%
                                                             (comprising space used for GCCD’s offices as well as a
                                                             clubhouse, a restaurant and the car park) is owned by
                                                             GCCD (a subsidiary of GZI, and therefore a connected
                                                             person of GZI REIT) and 5.9% is owned by unrelated third
                                                             parties.
 Year of completion of construction of                       1997
 City Development Plaza
 Term of land use right                                      40 years (till 2037) or 50 years (till 2047), depending on the
                                                             use to which each of the strata units is put(2).
 Occupancy
 - as at 30 September 2005                                   -   Retail   85.5%
                                                             -   Office   93.0%
 - average for the nine months ended 30 September            -   Retail   85.5%
   2005                                                      -   Office   91.6%
 Gross Rentable Area (as at 30 September 2005)
 - Retail                                                    - 11,757.6 sq.m.
 - Office                                                    - 30,639.8 sq.m.
 - Total                                                     - 42,397.4 sq.m.
 Number of tenants (as at 30 September 2005)                 60 (with 68 leases)
 Top five tenants in terms of monthly base rent for                          (Guangdong Mobile Communication
 September 2005                                              Co., Ltd.),                  (Efund Management Co.
                                                             Ltd.),                  (Guangzhou Wisdom Valley
                                                             Development Company Limited),
                                                             (Cosco Guangzhou International Freight Co. Ltd.) and
                                                                                       (Taikang Life Insurance Co.
                                                             Ltd.).(3)

                                                             These tenants are located in the office component of the
                                                             City Development Plaza Units and together accounted for
                                                             48.4% of the total monthly base rent of the City
                                                             Development Plaza Units for September 2005.
 Appraised Value (as at 30 September 2005)(4)                HK$385.5 million
 Gross Turnover
 - FY2004                                                    - HK$33.9 million
 - Six months ended 30 June 2005                             - HK$17.5 million


Notes:

(1)   Unless otherwise indicated, information in this table relates to the City Development Plaza Units rather than to City
      Development Plaza as a whole.

(2)   See the section headed “The Properties and Business — Terms of Land Use Rights” in this Offering Circular for a
      further explanation.

(3)   None of these persons are connected persons of GZI REIT.

(4)   As determined by the Independent Property Valuer in its valuation report dated 12 December 2005 (see Appendix
      VI to this Offering Circular).




                                                           11
                                 OFFERING CIRCULAR SUMMARY

                                                                      (1)
                                                  Victory Plaza Units
 Address of Victory Plaza (          )                       No. 101 Ti Yu Xi Road, Tian He District, Guangzhou, the
                                                             PRC (                            101 )
 Description                                                 Victory Plaza comprises a six-storey retail podium and four
                                                             levels of underground car parks in the first phase of an
                                                             integrated office and retail complex. Two tower blocks above
                                                             the podium are currently under construction and are
                                                             expected to be completed in 2007. Basement 1 of the
                                                             building comprises partly car park space and partly retail
                                                             space.

                                                             The Victory Plaza Units consist of nine strata units
                                                             comprising the six levels above ground in the podium and
                                                             the retail space in basement 1. They account for 52.7% of
                                                             the combined Gross Floor Area of the podium and the four
                                                             levels of underground car parks, and will account for
                                                             approximately 19.5% of the total Gross Floor Area of the
                                                             entire development when the two tower blocks are
                                                             completed. The car park in Victory Plaza is owned by
                                                             GCCD, a subsidiary of GZI and therefore a connected
                                                             person of GZI REIT.
 Year of completion of construction of the                   2003
 Victory Plaza podium
 Term of land use right                                      40 years (till 2044)(2).
 Occupancy
 - as at 30 September 2005                                   - 100.0% (all retail)
 - average for the nine months ended 30 September            - 85.2% (all retail)
   2005
 Gross Rentable Area (as at 30 September 2005)               27,262.3 sq.m.
 Number of tenants (as at 30 September 2005)                 22 (with 24 leases)
 Top five tenants in terms of monthly base rent for                           (Guangzhou Xindaxin Co., Ltd.),
 September 2005                                                             (Guangzhou GOME Electrical Appliances
                                                             Co., Ltd.),            (China Merchants Bank Guangzhou
                                                             Branch),                   (Yum! Restaurants (Guangdong)
                                                             Co., Ltd.) and                 (Guangzhou Qiao Mei Fa
                                                             Zhan Company Limited).(3)

                                                             Together, these tenants accounted for 72.6% of the total
                                                             monthly base rent of the Victory Plaza Units for September
                                                             2005.
 Appraised Value (as at 30 September 2005)(4)                HK$533.0 million
 Gross Turnover
 - FY2004                                                    - HK$24.4 million
 - Six months ended 30 June 2005                             - HK$12.8 million



Notes:

(1)   Unless otherwise indicated, information in this table relates to the Victory Plaza Units rather than to Victory Plaza
      as a whole.

(2)   See the section headed “The Properties and Business — Terms of Land Use Rights” in this Offering Circular for a
      further explanation.

(3)   None of these persons are connected persons of GZI REIT.

(4)   As determined by the Independent Property Valuer in its valuation report dated 12 December 2005 (see Appendix
      VI to this Offering Circular).




                                                           12
                           OFFERING CIRCULAR SUMMARY

      As at 30 September 2005, the Properties comprised 89,588.1 sq.m. of Gross Floor Area used
for wholesale or retail activities and 71,062.9 sq.m. of Gross Floor Area used as office or
warehouse space. Upon the expiry of the current leases on the 8th and 9th storeys of the White
Horse Units on 31 December 2005, the Manager intends to renovate those two storeys for
wholesale/retail use. This renovation is expected to cost HK$5.8 million (which will be funded from
an aggregate amount of HK$26.7 million retained from the proceeds of the Global Offering, see the
section headed “Material Agreements and Other Documents Relating to GZI REIT — The
Reorganisation Deed” in this Offering Circular) and to be completed before May 2006. After the
renovation, the Properties will have 93,508.1 sq.m. of Gross Floor Area used for wholesale or retail
activities (i.e. an increase of 4.4%) as well as 67,142.9 sq.m. of Gross Floor Area used as office
or warehouse space (i.e. a decrease of 5.5%).

    For the nine months ended 30 September 2005, the wholesale/retail component of the
Properties had an average occupancy rate of 93.1% while the office component had an average
occupancy rate of 77.5%.

Competitive Strengths of the Properties

     The Manager believes that the Properties enjoy the following competitive strengths:               App B
                                                                                                       B2(d)


     •    Quality properties in prime locations — The White Horse Building is one of the
          top 10 centres of the garment wholesale and retail trades in the PRC (having been
          awarded the “10 Largest Garment Wholesale Market Award” in 2005 by the
                                      (Economic Daily News Group — Fashion Times),
                              (China     Centre     for     Commercial        Information)     and
                                     (the Professional Market Committee of the China Commerce
          Association)) and attracts tenants and visitors not just from Guangdong province but
          also from the rest of the PRC. A key success factor for wholesale markets is being
          located near superior transport systems. White Horse Building is situated in the Liu Hua
          commercial zone, next to the exhibition hall for the Guangzhou Trade Fair, and is in
          Guangzhou’s main garment wholesale district. It is a short walk from Guangzhou Huo
          Che Zhan underground metro station (                   ) on the No. 2 metro line. White
          Horse Building is also located directly across from a bus station which operates both
          local and inter-provincial services. The Property is also in close proximity to the
          Guangzhou railway station, which facilitates long distance transportation of large
          quantities of clothing purchased by traders from other parts of the PRC who visit White
          Horse Building.

          The Guangzhou Municipal People’s Government decided in the 1990’s to develop the
          Tian He area into Guangzhou’s CBD. Since then, many high quality commercial
          buildings (including Fortune Plaza, City Development Plaza and Victory Plaza) have
          been built in the Tian He area. Fortune Plaza and City Development Plaza are Grade A
          office buildings and the Victory Plaza podium is a new shopping centre.

          The new underground metro system in Guangzhou has transformed the Tian He CBD
          into a central hub and an important interconnection point for the entire city. The Ti Yu



                                                13
                             OFFERING CIRCULAR SUMMARY

            Zhong Xin underground metro station (                    ) on the No. 1 metro line exits
            directly to Fortune Plaza, while City Development Plaza and Victory Plaza are both
            within short walking distance of the Ti Yu Xi Road station (               ). When the No.
            3 metro line is completed and commences operations (its first section is estimated to
            open by the end of 2005), shoppers travelling to the Tian He CBD on the No. 1 and No.
            3 metro lines will enjoy direct underground access to basement 1 of Victory Plaza from
            the metro station and the Manager anticipates that human traffic through Victory Plaza
            will increase significantly as a result. These three Properties are also in close proximity
            to the East Station of Guangzhou Railway Station (which serves the railway line
            between Guangzhou and Hong Kong) and the future airport express line.

            Over the years, White Horse Building and City Development Plaza have both received
            numerous awards in recognition of their excellence of construction and management.

     •      High occupancy — Both White Horse Building and City Development Plaza are
            well-established commercial properties. For the nine months ended 30 September
            2005, the White Horse Units enjoyed full occupancy. As at 30 September 2005, 1,246
            (95.3%) of the 1,307 leases (signed with 966 tenants) which are due to expire on 31
            December 2005 have been renewed for four or five years until 31 December 2009 or 31
            December 2010, as the case may be. In the same period, the City Development Plaza
            Units enjoyed an average occupancy rate of 89.9% and experienced a renewal rate (in
            terms of the total Gross Rentable Area covered by the expired leases) of 55.5%. The
            Manager believes that these two Properties will continue to enjoy high, consistent and
            stable occupancy rates.

            Although Fortune Plaza is a relatively new property (having been opened in the second
            half of 2003), the Fortune Plaza Units have nevertheless achieved an average
            occupancy rate of 65.9% for the nine months ended 30 September 2005. Similarly, the
            Victory Plaza podium was opened only in the second half of 2003 but the Victory Plaza
            Units achieved an average occupancy rate of approximately 85.2% for the nine months
            ended 30 September 2005.

Valuation

     The Properties have been valued by Colliers International (Hong Kong) Ltd, the Independent           App B
                                                                                                          B20 (c)
Property Valuer. As at 30 September 2005, the aggregate market value of the Properties was
HK$4,005.0 million. These valuations were made by the Independent Property Valuer in
accordance with the requirements contained in Chapter 6 of the REIT Code and the HKIS
Valuation Standards on Properties (First Edition 2005) published by the Hong Kong Institute of
Surveyors in January 2005. In carrying out its valuations, the Independent Property Valuer has
also made reference to the International Valuation Standards (7th Edition) published by the
International Valuation Standards Committee in 2005.

     The Properties were valued using the income capitalisation approach, including discounted
cash flow analysis. These values were cross checked with available market comparables using the
sales comparison approach. For further details of the valuations of the Properties, see Appendix
VI to this Offering Circular.



                                                  14
                                   OFFERING CIRCULAR SUMMARY

Overview of GZI REIT Structure


    The following diagram illustrates the primary structural and contractual relationships
between, among others, the Manager, the Trustee and the Leasing Agents.


                                                                 Unitholders

            GZI                                  -    Public in Hong Kong
                                                 -    Institutional investors
                                                 -    GZI (holding through Dragon Yield)
                                                                (1)
                                                 -    Yue Xiu

                                        Investment in GZI REIT                 Distributions

                          100.0%        Management
                                         services                                        Trustee fees         Trustee
                 Manager
              (GZI REIT Asset                                                                                 (HSBC
                                                                 GZI REIT                                   Institutional
            Management Limited)                                                                           Trust Services
                                        Management                                      Holds assets of   (Asia) Limited)
                                           fees                                          GZI REIT on
          Advisory           Advisory                                                     trust for the
            fees             services                                                    Unitholders
                                                                        100.0%
               Property Adviser
             (Jones Lang LaSalle                           GZI REIT (Holding) (4)
                   Limited)                              2005 Company Limited
                                                              (Hong Kong)

                      Leasing,
  Leasing Agents      marketing
   (Guangzhou        and tenancy
   White Horse       management
     Property          services                100.0%                  100.0%                  100.0%            100.0%
   Management
     Co. Ltd.
              (2)
                                            Partat               Moon King              Full Estates      Keen Ocean
 and Guangzhou                           Investment               Limited               Investment          Limited
 Yicheng Property                          Limited                 (BVI)                  Limited            (BVI)
   Management         Leasing,              (BVI)                                          (BVI)
          (3)
      Ltd. )          marketing
                     and tenancy
                     management
                        fees

                                                                                           City
                                        White Horse           Fortune Plaza                               Victory Plaza
                                                                                       Development
                                           Units                  Units                                       Units
                                                                                        Plaza Units



Notes:

(1)   To the extent that Yue Xiu and its subsidiaries (other than the members of the GZI Group) receive Units by way of
      distribution in their capacity as GZI Qualifying Shareholders.

(2)   White Horse Property Management Company, which is 96.8% owned by GZI (with the remaining 3.2% owned by
      GCCD Group), will provide leasing, marketing and tenancy management services to Partat in respect of the White
      Horse Units and will receive a fee from Partat.

(3)   Yicheng, which is 85.7% owned by GZI (with the remaining 14.3% owned by GCCD Group), will provide leasing,
      marketing and tenancy management services to Moon King, Full Estates and Keen Ocean for the Fortune Plaza
      Units, the City Development Plaza Units and the Victory Plaza Units respectively, and will receive a fee from each
      of these BVI Companies.

(4)   Currently known as King Profit Holdings Limited, which is in the process of changing its name to GZI REIT (Holding)
      2005 Company Limited. The change of name is currently expected to be effected by 31 December 2005.




                                                            15
                           OFFERING CIRCULAR SUMMARY

The Manager


     The Manager, GZI REIT Asset Management Limited, was incorporated in Hong Kong under
the Companies Ordinance on 3 October 2005. As at the Latest Practicable Date, the Manager had
paid-up share capital of HK$10,000,000. The Manager is licensed by the SFC to conduct the
regulated activity of asset management. The Manager is responsible for GZI REIT’s investment
and financing strategies, asset enhancement, acquisition and disposal policies and overall
management of the Properties. See the section headed “The Manager” in this Offering Circular for
further details about the Manager.


Corporate Governance


     Detailed corporate governance policies and procedures have been established to promote
the operation of GZI REIT in a transparent manner and with built-in checks and balances. The
Manager has adopted a compliance manual which sets out the key processes, systems and
measures the Manager will apply to ensure compliance with, among other things, the REIT Code
and the Trust Deed. The Trustee and the Manager are functionally independent of each other, with
their respective roles in relation to GZI REIT set out in the REIT Code and the Trust Deed. The
Manager is required by the REIT Code to act in the best interests of the Unitholders, to whom both
the Manager and the Trustee also owe fiduciary duties.


     The Board comprises six members, three of whom are independent non-executive Directors.
The Board has also established various committees to assist it in discharging its responsibilities
and which operate under clear terms of reference.


     Policies and procedures have been established for, among other things, monitoring and
supervising dealings in Units by the Manager as well as the Directors and senior management of
the Manager. For further details, see the section headed “Corporate Governance” in this Offering
Circular.


The Trustee


     The Trustee of GZI REIT is HSBC Institutional Trust Services (Asia) Limited, a wholly owned
subsidiary of The Hongkong and Shanghai Banking Corporation Limited. The Trustee is a
company incorporated in Hong Kong and registered as a trust company under section 77 of the
Trustee Ordinance. The Trustee is qualified to act as a trustee for collective investment schemes
authorised under the SFO. As at the Latest Practicable Date, the Trustee had a paid-up share
capital of HK$50,000,000.


     For details of the Trustee’s obligations under the Trust Deed and the REIT Code, see the
section headed “The Trust Deed” in this Offering Circular.




                                               16
                          OFFERING CIRCULAR SUMMARY

The Leasing Agents


    The Leasing Agents will provide leasing, marketing and tenancy management services to GZI
REIT on an exclusive basis.


    Yicheng was incorporated in the PRC in 1997 and is 85.7% owned by GZI, with the remaining
14.3% owned by GCCD Group, which is a state owned enterprise in the PRC separate from the
Yue Xiu Group and the GZI Group. As at 30 September 2005, Yicheng managed more than
470,000 sq.m. of commercial space in Guangzhou and was ISO9001:2000 certified in 2003.
Yicheng has historically been managed and operated independently of the Guangzhou Municipal
People’s Government and the Manager believes that it will continue to be so managed and
operated.


    White Horse Property Management Company was incorporated in the PRC in 1998 to provide
dedicated leasing, marketing, tenancy management and property management services to White
Horse Building and has been exclusively managing the property since 1998. It is 96.8% owned by
GZI with remaining 3.2% owned by GCCD Group. White Horse Property Management Company
was ISO9001:2000 certified in 2001.


The Property Adviser


    The Property Adviser, Jones Lang LaSalle Limited, is a leading global provider of integrated
real estate and money management services, with offices in more than 100 markets on five
continents.


     The Property Adviser has been engaged by the Manager to provide certain property
consultancy services to the Manager for a three-year period commencing on 3 October 2005.
When requested by the Manager, the Property Adviser will provide advice in relation to, among
other things:


    •    identifying and evaluating, and assisting in the execution of, acquisitions and disposals
         of properties;


    •    training the Manager’s staff in relation to asset management and property management
         related matters; and


    •    development of the Manager’s IT capabilities and infrastructure.


    The Property Adviser’s fees for such services will be borne by the Manager and not by GZI
REIT.




                                              17
                               OFFERING CIRCULAR SUMMARY

Summary Historical Financial Information

Audited Financial Statements of the Properties

  Combined Income Statements

                                            Period from
                                            20 December                                     Six months ended

                                             2002   (1)
                                                          to                                       30 June
                                                                                                  (2)
                                            31 December                                    2004
                                               2002               FY2003      FY2004     (Unaudited)         2005

                                             (HK$’000)           (HK$’000)   (HK$’000)    (HK$’000)       (HK$’000)


  Turnover — Rental Income and
    property management fees                    3,274            129,395     172,080        79,610          92,644 (3)
  Other gains — net                                 203            11,731       9,481        4,406           5,863


    Property management fees                         (27)          (1,221)     (5,700)      (1,814)          (3,597)
    Promotional and agency expense               (195)             (5,495)     (5,160)      (1,986)          (3,436)
    Fitting out and maintenance expenses             (14)          (1,474)     (2,116)      (1,077)          (1,204)
    Business tax and flood prevention fee        (184)             (8,632)    (10,715)      (4,972)          (7,056)
    Bad debts                                             —          (430)       (611)        (167)           (443)
    Employment benefit expense                   (440)            (14,757)    (17,488)      (6,199)          (7,153)
    Depreciation expenses                            (41)          (1,664)     (1,285)        (688)            (611)
    Miscellaneous expenses                       (212)             (6,403)     (7,935)      (2,863)          (3,547)

  Direct outgoings                             (1,113)            (40,076)    (51,010)     (19,766)        (27,047)


  Other operating expenses                           (30)          (2,927)     (2,799)      (1,495)          (2,446)


  Operating Income                              2,334              98,123    127,752        62,755           69,014 (3)


  Finance costs (4)                                       —            —           —               —                —
  Fair value gains on investment
    properties                                            —(5)   246,341        5,107              —(5)   612,044

  Profit before taxation                        2,334            344,464     132,859        62,755        681,058
  Income tax expenses                            (770)           (109,608)    (44,273)     (20,709)       (214,650)


  Profit for the period/year                    1,564            234,856      88,586        42,046        466,408


  Profit for the period/year before fair
    value gains on investment
    properties and related tax impact(6)        1,564              65,742     85,594        42,046          46,239




                                                    18
                              OFFERING CIRCULAR SUMMARY


Notes:

(1)   Being the date on which the transfer of the Properties from GCCD Group to GCCD was completed (see the
      section headed “The Properties and Business — Past Transactions of the Properties” in this Offering Circular).

(2)   The figures for the six months ended 30 June 2004 have only been reviewed and not audited.

(3)   In order to present the Rental Income and Operating Income on a comparable basis and to reflect the historical
      performance of the Properties over the two and one-half years ended 30 June 2005, the non-recurring item in the
      financial statements for the six months ended 30 June 2005 (namely, the accelerated amortisation of deferred
      assets amounting to approximately HK$17.0 million (see the section headed “Manager’s Discussion and Analysis
      of Financial Condition and Results of Operations — Audited Financial Statements of the Properties — Key Items
      in the Combined Income Statements — Gross Turnover” in this Offering Circular for an explanation of the nature
      of this item)) has been excluded from the discussion in the section headed “Management’s Discussion and
      Analysis of Financial Condition and Results of Operations” in this Offering Circular, and the adjusted turnover and
      operating income are as follows:

                                                                                                        Six months
                                                                                                           ended
                                                                                                       30 June 2005

                                                                                                         (HK$’000)


      Gross Turnover                                                                                      109,595
      Operating Income                                                                                      85,965



(4)   Interest charges incurred at the central treasury of GCCD are not reflected as a part of the basis of preparation
      of the Audited Financial Statements of the Properties as there were no direct bank borrowings in respect of the
      Fortune Plaza Units, the City Development Plaza Units and the Victory Plaza Units.


      There were no finance costs incurred for the White Horse Units during the relevant period.


(5)   No revaluation of the Properties was carried out during the six months ended 30 June 2004. There was no
      revaluation gain or loss during the period from 20 December 2002 to 31 December 2002.


(6)   Assuming the direct application of enterprise income tax of 33.0% on Operating Income.




                                                        19
                                OFFERING CIRCULAR SUMMARY

Audited Financial Statements of the Properties

  Combined Balance Sheets
                                                                                                               As at
                                                                       As at 31 December
                                                                                                              30 June
                                                               2002           2003            2004              2005
                                                           (HK$’000)       (HK$’000)       (HK$’000)         (HK$’000)

  ASSETS
  Non-current assets
  Property, plant and equipment                                118,128       11,165           10,598             7,169
  Land use rights                                              252,929           —                —              1,230(1)
  Investment properties (2)                                  1,576,633    2,437,384        2,444,859         3,114,286

                                                             1,947,690 2,448,549        2,455,457        3,122,685
                                                         ------------------------------------------------------------
  Current assets
  Deferred assets                                                 6,521        9,344          16,641             4,995
  Prepayments, deposits and other receivables                     3,653        4,350           5,400             6,093
  Cash and cash equivalents                                      31,978       41,878          39,695            18,329

                                                                42,152       55,572         61,736          29,417
                                                         ------------------------------------------------------------
  Total assets                                               1,989,842    2,504,121        2,517,193        3,152,102


  LIABILITIES
  Non-current liabilities
  Deferred tax liabilities                                      387,269      467,640         473,536           669,736
  Rental deposits, non-current portion                           23,715       27,170          10,051            15,097

                                                               410,984      494,810        483,587         684,833
                                                         ------------------------------------------------------------
  Current liabilities
  Rental deposits, accruals and other payables                   10,291       18,758          43,841            43,873
  Current tax payable                                             7,721        4,720           6,151             5,550

                                                                18,012       23,478         49,992          49,423
                                                         ------------------------------------------------------------
  Total liabilities                                             428,996      518,288         533,579           734,256

  Net assets                                                 1,560,846    1,985,833        1,983,614        2,417,846


  Financed by:
  Accounts with Subsidiaries of GZI
    - Arising from accumulated profits                           1,564      236,420          325,006          791,414
    - Others                                                 1,559,282    1,749,413        1,658,608        1,626,432

                                                             1,560,846    1,985,833        1,983,614        2,417,846


  Notes:
  (1)   This amount represented pre-paid operating lease payments for the land use rights of the units in the White Horse
        Units used by White Horse Property Management Company as its on-site property management office (see the
        section headed “The Leasing Agents — Property Management Offices” in this Offering Circular) and was
        classified as investment properties when Partat became the beneficial owner of the White Horse Units.
  (2)   Investment property is carried at fair value under the relevant accounting policies. The valuer appointed
        historically (Greater China Appraisal Limited) is different from the one appointed by the Manager for GZI REIT.
        In the past, Greater China Appraisal Limited had primarily relied on the income capitalisation approach in valuing
        the Properties.


                                                          20
                                OFFERING CIRCULAR SUMMARY

Audited Financial Statements of the Properties

  Combined Cash Flow Statements

                                 Period from                                    Six months ended
                                 20 December                                            30 June
                                  2002(1) to
                                 31 December                                 2004(2)
                                    2002        FY2003        FY2004       (Unaudited)        2005

                                  (HK$’000)    (HK$’000)     (HK$’000)     (HK$’000)        (HK$’000)


  Cash flows from operating
    activities
  Net cash inflow generated
    from operations                   8,966      107,919       128,009         51,042             88,047
  PRC enterprise income tax                —      (32,238)      (36,946)      (18,153)        (19,051)


  Net cash inflow from
    operating activities              8,966       75,681        91,063         32,889             68,996


  Net cash inflow/(outflow)
    from investing activities    (1,536,270)    (255,912)        (2,441)           72         (58,186)

                                 (1,527,304)    (180,231)       88,622         32,961             10,810
  Net advances from/(to)
    subsidiaries of GZI           1,559,282      190,131        (90,805)      (34,210)        (32,176)


  Increase/(decrease) in
    the cash and cash
    equivalents (3)                  31,978        9,900         (2,183)       (1,249)        (21,366)



  Balances at beginning of
    year/period
    — Cash and cash
      equivalents (3)                      —      31,978        41,878         41,878             39,695
    — Accounts with
      subsidiaries of GZI(4)               —   (1,559,282)   (1,749,413)   (1,749,413)     (1,658,608)



  Balances at end of
    year/period
    — Cash and cash
      equivalents (3)                31,978       41,878        39,695         40,629             18,329
    — Accounts with
      subsidiaries of GZI(4)     (1,559,282)   (1,749,413)   (1,658,608)   (1,715,203)     (1,626,432)




                                                 21
                             OFFERING CIRCULAR SUMMARY


Notes:

(1)   Being the date on which the transfer of the Properties from GCCD Group to GCCD was completed (see the
      section headed “The Properties and Business — Past Transactions of the Properties” in this Offering Circular).

(2)   The figures for the six months ended 30 June 2004 have only been reviewed and not audited.

(3)   Changes in cash and cash equivalents are attributable to the operations of the White Horse Units.

(4)   The treasury and cash disbursement functions of the GCCD Properties were centrally administered by GCCD.
      Cash flows such as receipt of rental income, settlement of expense payable and the acquisitions of assets were
      handled by GCCD centrally and therefore reflected herein.




                                                      22
                               OFFERING CIRCULAR SUMMARY

Profit Forecast for the Forecast Period 2005 and the Forecast Year 2006

     The Manager forecasts that, in the absence of unforeseen circumstances and on the principal
bases and assumptions set out in the section headed “Profit Forecast” in this Offering Circular, the
net profit after tax of GZI REIT (reflecting the consolidated income statements of GZI REIT,
comprising those of Holdco and the BVI Companies) will be not less than HK$1.6 million for the
Forecast Period 2005 and not less than HK$201.0 million for the Forecast Year 2006.

                                                 Audited combined income          Forecast consolidated
                                                statements of the Properties       results of GZI REIT
                                                                               Period from
                                                                6 months       the Listing
                                                 Year ended       ended          Date to       Year ending
                                                31 December      30 June       31 December    31 December
                                                   2004(1)        2005(1)         2005            2006
                                                  (HK$’000)     (HK$’000)       (HK$’000)       (HK$’000)

Rental Income                                     172,080         92,644          6,694         363,702
Other income                                        9,481          5,863             10             337
Total Gross Income                                181,561         98,507          6,704         364,039

Leasing Agents’ fees                               (10,860)       (7,033)          (235)         (12,125)
Property related taxes                             (10,782)       (7,100)          (640)         (28,678)
Other property expenses                            (32,167)      (15,360)          (269)          (7,045)
Total property operating expenses                  (53,809)      (29,493)        (1,144)         (47,848)

Net property income                               127,752         69,014          5,560         316,191

Withholding tax                                           —             —          (637)         (34,705)
Manager’s fees                                            —             —          (538)         (21,935)
Trustee’s fees                                            —             —           (37)          (1,245)
Other trust expenses                                      —             —        (1,212)          (7,904)
Total non-property expenses                               —             —        (2,424)         (65,789)

Fair value gains on investment properties (2)        5,107       612,044             —                   —

Net profit before finance costs,
  interest income and tax                         132,859        681,058          3,136         250,402

Interest income                                           —             —            —             2,743
Finance costs                                             —             —        (1,542)         (52,138)

Net profit before tax                             132,859        681,058          1,594         201,007

Income tax expenses                                (44,273)     (214,650)            —                   —

Net profit after tax                               88,586        466,408          1,594         201,007
Net profit after tax before fair value
  gains on investment properties
  and related tax impact (3)                       85,594         46,239          1,594         201,007




                                                     23
                                  OFFERING CIRCULAR SUMMARY

                                                                                             Year ending
                                                                                         31 December 2006

                                                                                 Maximum                    Minimum
                                                                              Offer Price of             Offer Price of
                                                                                 HK$3.075                   HK$2.850



Total Distributable Income (HK$’000)                                                 201,007                    201,007
No. of Units in issue                                                         1,000,000,000             1,000,000,000
Distribution per Unit (4) (HK$)                                                         0.201                      0.201
                     (4)
Distribution yield                                                                     6.54%                      7.05%




Notes:

(1)   Historical numbers are extracted and reclassified from the Audited Financial Statements of the Properties set out in
      Appendix I to this Offering Circular.

(2)   In accordance with HKAS 40 “Investment Property”, future changes in the valuation of the Properties will be reflected
      in GZI REIT’s consolidated income statement. However the extent of any changes in the valuation of the Properties
      in the future will be established by reference to the market at that time. The Manager has not made any assumption
      as to property valuation movements in arriving at the forecast consolidated net profit after tax for the period from the
      Listing Date to 31 December 2006. (See the section headed “Profit Forecast — Sensitivity Analysis” in this Offering
      Circular for certain illustrations of the potential sensitivity of the Manager’s profit forecast to movements in the fair
      value of the Properties.)

(3)   Assuming the direct application of enterprise income tax of 33.0% on Operating Income.

(4)   The distribution per Unit is equal to the Total Distributable Income divided by the total number of Units in issue. Given
      the short period comprised in the Forecast Period 2005, the Manager believes that the distribution per Unit and yield
      figures would not be representative of the future performance of GZI REIT. As such, the distribution yields disclosed
      above do not include distributions in respect of the Forecast Period 2005.


Certain Fees


     The following is a summary of certain fees payable by GZI REIT in connection with the
establishment and on-going management of GZI REIT:

      Manager’s Fees                             Base fee                                                                         App B
                                                                                                                                  B14 (b) &
                                                 In each Financial Year, a base fee of 0.3% per annum of the                      B14 (c)
                                                                                                                                  RC 9.10
                                                 value of the Deposited Property, payable semi-annually in                        RC 9.11

                                                 arrears.

                                                 Service fee
                                                 In each Financial year, a service fee of 3.0% per annum of
                                                 Net Property Income payable monthly in arrears.




                                                             24
                 OFFERING CIRCULAR SUMMARY

                       Acquisition fee
                       A transaction fee of 1.0% of the consideration for the
                       acquisition of any real estate (which, for the avoidance of
                       doubt, shall not include any taxes, withholdings, out-of-
                       pocket expenses or deductions incurred by GZI REIT in
                       connection with any such acquisition) to form part of the
                       Deposited Property (except where the vendor of such real
                       estate is the Manager or any of its connected persons,
                       which would include property acquired under the right of
                       first refusal granted by GZI to GZI REIT as described in the
                       section headed “Material Agreements and Other
                       Documents Relating to GZI REIT — Deed of Right of First
                       Refusal” in this Offering Circular), which shall be paid as
                       soon as practicable after the relevant acquisition.

                       Disposal fee
                       A transaction fee of 0.5% of the gross sale price (which, for
                       the avoidance of doubt, shall not include any taxes,
                       withholdings, out-of-pocket expenses or deductions
                       incurred by GZI REIT in connection with any such sale) of
                       the disposal of any part of the Deposited Property
                       comprising of real estate (except where the purchaser of
                       such real estate is the Manager or any of its connected
                       persons), which shall be paid as soon as practicable after
                       the relevant sale of real estate.

                       Any increase in the base fee, service fee, acquisition fee
                       and disposal fee over the percentages set out above or any
                       change to the structure of the Manager’s remuneration will
                       require Unitholders’ approval by Special Resolution.

                       (See the section headed “The Manager — Fees, Costs and
                       Expenses of the Manager” in this Offering Circular for
                       further details on the Manager’s remuneration.)

Trustee’s Fees         Inception fee
                       A one-off inception fee as agreed between the Trustee and
                       the Manager of not more than HK$200,000.

                       Ongoing fee
                       In each Financial Year, an ongoing fee of 0.03% per annum
                       of the value of the Deposited Property (which may be
                       increased to a maximum of 0.06% per annum of the value
                       of the Deposited Property), subject to a minimum amount of
                       HK$50,000 per month. Such remuneration of the Trustee
                       shall be payable out of the Deposited Property semi-
                       annually in arrears.




                                25
                         OFFERING CIRCULAR SUMMARY

                                    Pursuant to the Trust Deed, the Trustee and the Manager
                                    may increase the rate of the Trustee’s ongoing fee up to
                                    and including 0.06% per annum of the value of the
                                    Deposited Property, subject to three months’ prior written
                                    notice being given to the Unitholders.

                                    Any increase of the ongoing fee beyond 0.06% per annum
                                    or any change to the structure of the Trustee’s
                                    remuneration requires Unitholders’ approval by Special
                                    Resolution. (See the section headed “The Trust Deed —
                                    Trustee’s Fee” in this Offering Circular for further details on
                                    the Trustee’s remuneration.)

    Leasing Agents’ Fees            Leasing, marketing and tenancy management fees
                                    In the case of Yicheng, a monthly fee of 4.0% per annum of
                                    the gross revenue of each of the City Development Plaza
                                    Units, the Victory Plaza Units and the Fortune Plaza Units,
                                    calculated at the end of each month and payable monthly in
                                    arrears.

                                    In the case of White Horse Property Management
                                    Company, a monthly fee of 3.0% per annum of the gross
                                    revenue of the White Horse Units.

                                    (See the section headed “Material Agreements and Other
                                    Documents Relating to GZI REIT — Tenancy Services
                                    Agreements” in this Offering Circular for further details.)

    Others                          Other expenses
                                    GZI REIT will also need to pay certain other ongoing fees
                                    and expenses for the daily operations of GZI REIT
                                    (including reimbursement of the Trustee’s and the
                                    Manager’s out-of-pocket expenses), such as interest
                                    expenses, annual listing fees, financial report printing fees,
                                    auditors fees, legal advisers fees, fees of its appointed
                                    independent property valuer and fees of other professional
                                    advisers, but excluding the Property Adviser’s fees (which
                                    will be borne by the Manager).


Acquisition Terms


    The Properties were acquired by GZI REIT on 7 December 2005 pursuant to the
Reorganisation Deed under which the BVI Company Shares were transferred from GCCD BVI to
Holdco for an initial consideration of HK$4,014,180,000, which is subject to adjustments as
described in the section headed “Material Agreements and Other Documents Relating to GZI REIT
— Reorganisation Deed”.




                                             26
                               OFFERING CIRCULAR SUMMARY

     Assuming that the acquisition of the BVI Company Shares by Holdco and the issuance of
Units in the Global Offering take place on the same day, the NTA per Unit on the Listing Date is
expected to be HK$2.775. The Maximum Offer Price of HK$3.075 and the Minimum Offer Price of
HK$2.850 respectively represent premiums of 10.8% and 2.7% to the NTA per Unit. Based on the
Maximum Offer Price of HK$3.075, the final consideration will be adjusted to HK$4,089,416,000
taking into account an assumed adjustment of HK$75,236,000 in accordance with the
Reorganisation Deed while based on the Minimum Offer Price of HK$2.850, the final consideration
will be adjusted to HK$3,961,520,000 taking into account an assumed adjustment of
HK$52,660,000. (See the section headed “Unaudited Pro Forma Balance Sheets of GZI REIT” in
this Offering Circular for further details.)


Unaudited Pro Forma Balance Sheets of GZI REIT


     The following table sets out the unaudited pro forma balance sheets of GZI REIT as at the
date of the establishment of GZI REIT assuming that the acquisition of the BVI Companies by
Holdco and the issuance of the Units in the Global Offering take place on the same day, and
adjusted for the US$165.0 million to be drawn down on the Loan Facility. The table is based on the
unaudited pro forma balance sheets of GZI REIT in Appendix III to this Offering Circular and should
be read in conjunction with the basis of preparation, the pro forma adjustments and the letter from
the Reporting Accountants therein, as well as the section headed “The Reorganisation” in this
Offering Circular.


Unaudited Pro Forma Balance Sheets of GZI REIT

                                                                       Based on        Based on
                                                                    Maximum Offer    Minimum Offer
                                                                        Price of        Price of
                                                                       HK$3.075        HK$2.850

                                                                     (HK$ million)   (HK$ million)


Assets
Investment properties (1)                                               4,005.0         4,005.0
Property, plant and equipment                                               3.0             3.0
Other assets (2)                                                            6.0             6.0
Cash and cash equivalents (3)                                              88.0            88.0
Goodwill (4)                                                               78.0              —

Liabilities
Rental deposits, accruals and other payables                              (62.0)          (62.0)
Amount drawn down under the Loan Facility(5)                           (1,265.0)       (1,265.0)
                                                                        2,853.0         2,775.0

Unitholders’ equity
Issued capital(6)                                                       2,930.0         2,798.0
Retained earnings(4)                                                          —             51.0
Global Offering expenses (7)                                              (77.0)          (74.0)
                                                                        2,853.0         2,775.0




                                                27
                                  OFFERING CIRCULAR SUMMARY


Notes:

(1)   Investment properties are stated at market valuation based on the valuations performed by the Independent Property
      Valuer as at 30 September 2005. The Directors of the Manager and GZI consider that there is no material change
      in the fair value of the Properties in the period from 1 October 2005 to 31 October 2005.

(2)   Other assets include deferred assets, trade receivables, other receivables and prepayments.

(3)   Cash and cash equivalents represent cash and bank deposits of HK$12,653,000 acquired from the BVI Companies,
      additional cash of HK$47,146,000 injected by GZI into the BVI Companies before the Global Offering in accordance
      with the Reorganisation Deed (in order to reach a cash balance of HK$59,799,000 to match the amount of all current
      and all non-current liabilities, including rental deposits for all existing tenancies as of 31 October 2005 but excluding
      bank loans), cash of HK$26,700,000 retained from the proceeds of the Global Offering for proposed renovation
      works at the White Horse Units and cash of HK$2,085,600 (also retained from the proceeds of the Global Offering)
      for the Rental Income attributable to Partat for the period from the Listing Date to 31 December 2005 (both dates
      inclusive), as provided for in the Reorganisation Deed.

(4)   Goodwill is the excess of the final consideration payable under the Reorganisation Deed (as described in the section
      headed “Material Agreements and Other Documents Relating to GZI REIT — Reorganisation Deed” in this Offering
      Circular) over the aggregate fair values of the assets and liabilities assumed in the acquisition of the BVI Companies.

      Based on the Maximum Offer Price, the market value of the Properties as at 30 September 2005 (as determined by
      the Independent Property Valuer) and the amounts of assets and liabilities listed in the table above, there will be an
      estimated goodwill of HK$78.0 million.

      Retained earnings represent the excess of the aggregate fair values of the assets and liabilities assumed in the
      acquisition of the BVI Company Shares (i.e. the Initial Consideration) over the final consideration payable under the
      Reorganisation Deed.

      Based on the Minimum Offer Price, the market value of the Properties as at 30 September 2005 (as determined by
      the Independent Property Valuer) and the amounts of assets and liabilities listed in the table above, the excess of
      the aggregate fair values of the assets and liabilities assumed in the acquisition of the BVI Company Shares over
      the final consideration payable under the Reorganisation Deed amounted to HK$51.0 million, which is recognised
      in retained earnings.

(5)   This refers to the amount of HK$1,287.0 million drawn down under the Loan Facility on the Listing Date, net of
      capitalised debt related expenses in respect of the Loan Facility of HK$21.6 million.

(6)   This represents the issued capital arising from the issuance of 417,000,000 Units (amounting to HK$1,137,234,060)
      to GZI as partial consideration for the transfer of the BVI Company Shares to Holdco and the offering of 583,000,000
      Units (amounting to HK$1,792,725,000 based on the Maximum Offer Price and HK$1,661,550,000 based on the
      Minimum Offer Price) under the Global Offering.

(7)   This represents the expenses of the Global Offering (which includes, among other things, underwriting fees and
      commissions, professional fees and expenses as well as printing fees) of HK$77,158,000 based on the Maximum
      Offer Price and HK$73,879,000 based on the Minimum Offer Price.




                                                             28
                             THE GLOBAL OFFERING


GZI REIT                         GZI REIT is a collective investment scheme constituted
                                 as a unit trust by the Trust Deed and authorised under
                                 section 104 of the SFO subject to the applicable
                                 conditions imposed by the SFC from time to time.

The Manager                      GZI REIT Asset Management Limited

The Trustee                      HSBC Institutional Trust Services (Asia) Limited

The Global Offering              A total initial offering of 583,000,000 Units consisting of
                                 the Hong Kong Public Offering and the International
                                 Offering (subject to adjustment and the exercise of the
                                 Over-allocation Option, and before taking account of the
                                 Sale Units).

The Hong Kong Public             An initial offer of 60,000,000 Units to the public in Hong
Offering                         Kong (subject to adjustment and reallocation).

The International Offering       An initial offer of 523,000,000 Units to institutional,
                                 professional and other investors (subject to an increase
                                 of up to 17,000,000 additional Units under the Offer for
                                 Sale, which will comprise part of the International
                                 Offering).

The Offer for Sale               Up to 17,000,000 Units (being the maximum aggregate
                                 number of Units representing: (i) the Units in respect of
                                 which the GZI Qualifying Shareholders may elect to
                                 exercise the GZI Qualifying Shareholders’ Option; and
                                 (ii) such number of Units which the GZI Ineligible
                                 Overseas Shareholders would otherwise have been
                                 entitled to receive under the Special Dividend) which will
                                 be offered for sale as part of, and under, the International
                                 Offering.

Reallocation of Units            The Units to be offered in the Hong Kong Public Offering
                                 and the International Offering may, in certain
                                 circumstances, be reallocated between these offerings.
                                 (See the section headed “Structure of the Global
                                 Offering” in this Offering Circular.)

Structure                        The Units are being offered and sold outside the United
                                 States in reliance on Regulation S under the US
                                 Securities Act. The Units have not been and will not be
                                 registered under the Securities Act and, subject to
                                 certain exceptions, may not be offered or sold within the
                                 United States.




                                         29
                          THE GLOBAL OFFERING


Offer Price Range              The Offer Price of the Units (which will be denominated
                               in Hong Kong dollars) will not be more than HK$3.075
                               and is currently expected to be not less than HK$2.850.

Charges Payable by Investors   In addition to the Maximum Offer Price, investors
                               applying for Units must pay brokerage of 1.0%, Hong
                               Kong Stock Exchange trading fee of 0.005% and SFC
                               transaction levy of 0.005%, subject to refund if the Offer
                               Price should be lower than the Maximum Offer Price.

Over-allocation Option         In connection with the Global Offering, the Joint Global
                               Coordinators have been granted the Over-allocation
                               Option by Dragon Yield, which is exercisable by the
                               Stabilising Manager, in consultation with the other Joint
                               Global Coordinators, in full or in part, on one occasion
                               only, within 30 days after the last date for lodging
                               Application Forms under the Hong Kong Public Offering,
                               to purchase from Dragon Yield up to an aggregate of
                               87,450,000 Units at the Offer Price. The total number of
                               Units in issue on the Listing Date will be 1,000,000,000
                               Units. The exercise of the Over-allocation Option will not
                               increase this total number of Units in issue. The total
                               number of Units subject to the Over-allocation Option will
                               constitute up to 15.0% of the total number of Units
                               initially available under the Global Offering.

Use of Proceeds                See the section headed “Use of Proceeds” in this
                               Offering Circular for details of how the proceeds from the
                               Global Offering will be applied.

GZI REIT Lock-up               Pursuant to the Underwriting Agreements, the Manager
                               agrees that, except pursuant to the Global Offering or
                               with the consent of the Joint Global Coordinators, neither
                               GZI REIT nor any of the entities controlled by GZI REIT
                               shall, during a period of six months following the Listing
                               Date and whether conditionally or unconditionally:

                               •    allot, issue, offer, sell, contract to sell, hedge, grant
                                    any option or right to subscribe or purchase over or
                                    in respect of, or otherwise dispose of, any Units or
                                    any securities exchangeable or convertible into
                                    Units or which carry rights to subscribe for or
                                    purchase Units; or




                                      30
                          THE GLOBAL OFFERING


                               •    deposit Units with a depositary in connection with
                                    the issue of depositary receipts; or

                               •    enter into a transaction (including, without
                                    limitation, a swap or other derivative transaction)
                                    that transfers, in whole or in part, any economic
                                    consequence of ownership of any Units; or

                               •    offer or agree or announce any intention to do any
                                    of the foregoing.

The GZI and Yue Xiu Lock-ups   Pursuant to the Underwriting Agreements, GZI agrees          App B B6

                               that, except with the consent of the Joint Global
                               Coordinators or as described below, it will not, and will
                               procure that its subsidiaries will not, during a period of
                               six months following the Listing Date and whether
                               conditionally or unconditionally:

                               •    dispose of: (i) any Units or any direct or indirect
                                    interest therein (including, without limitation, by
                                    granting or creating any option, mortgage, pledge,
                                    charge or other security interest); or (ii) any
                                    securities exchangeable or convertible into any
                                    Units; or

                               •    enter into any swap or other derivative transaction
                                    or other arrangement that transfers, in whole or in
                                    part, any economic consequence of ownership of
                                    any Units or, any securities exchangeable or
                                    convertible into any Units; or

                               •    dispose of any direct or indirect interest in any
                                    company or entity holding any securities
                                    exchangeable or convertible into any Units; or

                               •    offer or agree or announce any intention to do any
                                    of the foregoing.




                                      31
                      THE GLOBAL OFFERING


                          These restrictions do not apply to a transfer of Units to a
                          wholly owned subsidiary of GZI (provided such
                          transferee enters into equivalent obligations), a transfer
                          of Units pursuant to the exercise of the Over-allocation
                          Option, the Unit Borrowing Agreement or the proposed
                          distribution in specie of Units under the Special
                          Dividend.

                          Yue Xiu, for itself and on behalf of its subsidiaries (other
                          than the members of the GZI Group) has undertaken
                          that, to the extent that Yue Xiu and its subsidiaries (other
                          than the members of the GZI Group) receive Units by
                          way of distribution in their capacity as GZI Qualifying
                          Shareholders, any such Units will be subject to the same
                          restrictions to which GZI is subject (as described above).
                          Such restrictions will not apply to a transfer of Units to a
                          wholly owned subsidiary of Yue Xiu.

Listing and Trading       Prior to the Global Offering, there has been no market for
                          the Units.

                          Preliminary approval has been granted by the Hong
                          Kong Stock Exchange for the listing of, and permission
                          to deal in, all the Units on the Main Board of the Hong
                          Kong Stock Exchange. Dealings in Units on the Hong
                          Kong Stock Exchange are expected to commence on 21
                          December 2005. If the Hong Kong Stock Exchange
                          grants formal approval for the listing of, and permission
                          to deal in, the Units on the Main Board of the Hong Kong
                          Stock Exchange and GZI REIT complies with the stock
                          admission requirements of HKSCC, the Units will be
                          accepted as eligible securities by HKSCC for deposit,
                          clearance and settlement in CCASS, with effect from the
                          date of commencement of dealings in the Units on the
                          Hong Kong Stock Exchange or any other date that
                          HKSCC chooses. Settlement of transactions between
                          participants of the Hong Kong Stock Exchange is
                          required to take place in CCASS on the second Hong
                          Kong Stock Exchange business day after any trading
                          day.

                          All activities under CCASS are subject to the General
                          Rules of CCASS and CCASS Operational Procedures in
                          effect from time to time.

                          All necessary arrangements have been made for the
                          Units to be admitted into CCASS.



                                  32
                           THE GLOBAL OFFERING


Stabilisation                  In connection with the Global Offering, the Stabilising
                               Manager in consultation with the other Joint Global
                               Coordinators may over-allocate or effect transactions
                               with a view to supporting the market price of the Units at
                               a level higher than that which might otherwise prevail for
                               a period of 30 days after the last date for lodging
                               Application Forms under the Hong Kong Public Offering.
                               (See the section headed “Structure of the Global Offering
                               — Stabilising Action” in this Offering Circular for further
                               details of the stabilisation arrangements.)

No Redemption by               Unitholders have no right to request the Manager to
Unitholders                    redeem their Units. Listing of the Units on the Hong Kong
                               Stock Exchange does not guarantee a liquid market for
                               the Units.

Profit Forecast for the        The Manager forecasts that, in the absence of
Forecast Period 2005 and       unforeseen circumstances and on the bases and
the Forecast Year 2006         assumptions set out in the section headed “Profit
                               Forecast” in this Offering Circular, the consolidated net
                               profit after taxation but before extraordinary items of GZI
                               REIT (reflecting the consolidated income statement of
                               GZI REIT, Holdco and the BVI Companies) for the
                               Forecast Period 2005 and the Forecast Year 2006 will be
                               not less than HK$1.6 million and HK$201.0 million
                               respectively. For further details, including the principal
                               bases and assumptions on which the forecast is based,
                               see the section headed “Profit Forecast” in this Offering
                               Circular.

Distributions                  The Manager’s policy is to distribute to Unitholders as       App B B2 (l)

                               distributions an amount equivalent to 100.0% of GZI
                               REIT’s Total Distributable Income for each of FY2006 to
                               FY2008 and thereafter at least 90.0% of annual Total
                               Distributable Income (subject to qualifications under the
                               Trust Deed), as more fully described in the section
                               headed “Distribution Policy” in this Offering Circular.
                               Distributions will be declared in Hong Kong dollars.

                               GZI REIT’s distribution for the period from the Listing
                               Date to 31 December 2005 will be paid together with its
                               distribution for the period from 1 January 2006 to 30
                               June 2006 on or before 30 November 2006.




                                       33
                                THE GLOBAL OFFERING


                                    See the sections headed “Risk Factors” and “Distribution
                                    Policy” in this Offering Circular for a discussion of factors
                                    that may adversely affect the ability of GZI REIT to make
                                    distributions to Unitholders.

Statement of Distribution for       For the Forecast Year 2006, Unitholders will be paid, in
the Forecast Year 2006              the absence of unforeseen circumstances, total
                                    distributions per Unit of not less than HK$0.201 (which
                                    excludes distributions in respect of the period from the
                                    Listing Date to 31 December 2005), representing a
                                    distribution yield of 6.54% based on the Maximum Offer
                                    Price (excluding other transaction costs) and 7.05%
                                    based on the Minimum Offer Price (excluding other
                                    transaction costs). Any shortfall in distributions will be
                                    disclosed in GZI REIT’s audited financial statements for
                                    Forecast Year 2006.

Unitholders’ Meetings               Each of the Trustee and the Manager may at any time,
                                    and the Manager shall (at the request in writing of not
                                    less than two Unitholders registered as together holding
                                    not less than 10.0% of the Units for the time being in
                                    issue and outstanding), convene a meeting of
                                    Unitholders and propose resolutions for consideration at
                                    such meeting.

Tax Considerations                  See the section headed “Taxation” in this Offering
                                    Circular for further information on the tax consequences
                                    of the purchase, ownership and disposal of the Units.

Governing Law                       The Trust Deed, pursuant to which GZI REIT is
                                    constituted, is governed by Hong Kong law.

Termination of GZI REIT             GZI REIT may be terminated in the circumstances set
                                    out in the Trust Deed. See the section headed “The Trust
                                    Deed” in this Offering Circular for further information.

Risk Factors                        Prospective investors should carefully consider certain
                                    risks connected with an investment in the Units, as
                                    discussed under the section headed “Risk Factors” in
                                    this Offering Circular.




                                            34
                INFORMATION ABOUT THIS OFFERING CIRCULAR
                        AND THE GLOBAL OFFERING                                                         App B
                                                                                                        B28


Manager’s Responsibility for the Contents of this Offering Circular                                     App B
                                                                                                        B26
                                                                                                        RC 5.2A

     The Manager and the Directors (whose names appear in the section headed “Parties
Involved in the Global Offering” in this Offering Circular) collectively and individually accept full
responsibility for the accuracy of the information contained in this Offering Circular and confirm,
having made all reasonable enquiries, that to the best of their knowledge and belief there are no
other facts the omission of which would make any statement in this Offering Circular misleading.


SFC Authorisation


     GZI REIT has been authorised by the SFC under section 104 of the SFO. The SFC does not
take any responsibility for the financial soundness of GZI REIT or for the correctness of any
statements made or opinions expressed in this Offering Circular and other documents relating to
GZI REIT. Authorisation by the SFC does not imply official recommendation of GZI REIT.


Underwriting


     This Offering Circular is published solely in connection with the Hong Kong Public Offering,
which forms part of the Global Offering. For applicants under the Hong Kong Public Offering, this
Offering Circular as well as the WHITE and YELLOW Application Forms contain the terms and
conditions of the Hong Kong Public Offering.


     The Global Offering is managed by the Joint Global Coordinators. Pursuant to the Hong Kong
Underwriting Agreement, the Hong Kong Public Offering is underwritten by the Hong Kong
Underwriters. If, for any reason, the Offer Price is not agreed among the Manager and the Joint
Global Coordinators (on behalf of the Underwriters), the Global Offering will not proceed. Further
details about the Underwriters and the underwriting arrangements are contained in the section
headed “Underwriting” in this Offering Circular.


Distribution and Selling Restrictions


     The Hong Kong Public Offering Units are offered solely on the basis of the information
contained and representations made in this Offering Circular and the Application Forms and on the
terms and subject to the conditions set out herein and therein. No person is authorised to give any
information in connection with the Hong Kong Public Offering or to make any representation not
contained in this Offering Circular, and any information or representation not contained herein
must not be relied upon as having been authorised by the Manager, the Trustee, the Listing Agent,
the Underwriters, any of their respective directors, agents, employees or advisers or any other
parties involved in the Global Offering.




                                                 35
                INFORMATION ABOUT THIS OFFERING CIRCULAR
                        AND THE GLOBAL OFFERING

      Save as disclosed in this Offering Circular, no action has been or will be taken in any
jurisdiction that would permit a public offering of the Units or the possession, circulation or
distribution of this Offering Circular or any other offering or publicity material relating to GZI REIT
or the Units in any country or jurisdiction other than Hong Kong. The Units may not be offered or
sold, directly or indirectly, and neither this Offering Circular nor any other offering material,
circular, form of application or advertisement in connection with the Global Offering of the Units
may be distributed or published in or from any country or jurisdiction except under circumstances
that will result in compliance with any applicable rules and regulations of any such country or
jurisdiction.

     Each person acquiring Units will be required to confirm, or by the acquisition of Units will be
deemed to have confirmed, that he is aware of the restrictions on offers of Units described in this
Offering Circular.

     Applicants for Units are recommended to consult their professional advisers if they
are in any doubt as to the regulatory implications of subscribing for, purchasing, holding,
disposing of or otherwise dealing in Units.

Application for Listing on the Hong Kong Stock Exchange

     Prior to the Global Offering, there has been no market for the Units. Preliminary approval has
been granted by the Hong Kong Stock Exchange for the listing of, and permission to deal in, the
Units on the Main Board of the Hong Kong Stock Exchange. Dealings in the Units on the Hong
Kong Stock Exchange are expected to commence on 21 December 2005.

Eligibility for Admission into CCASS

      Subject to the granting of formal approval for the listing of, and permission to deal in, the
Units on the Hong Kong Stock Exchange and compliance with the stock admission requirements
of HKSCC, the Units will be accepted as eligible securities by HKSCC for deposit, clearance and
settlement in CCASS with effect from the date of commencement of dealings in the Units on the
Hong Kong Stock Exchange or any other date that HKSCC chooses. Settlement of transactions
between participants of the Hong Kong Stock Exchange is required to take place in CCASS on the
second Hong Kong Stock Exchange business day after any trading day.

    All activities under CCASS are subject to the General Rules of CCASS and CCASS
Operational Procedures in effect from time to time.

     All necessary arrangements have been made for the Units to be admitted into CCASS.

Stamp Duty

     No Hong Kong stamp duty is payable in connection with the initial issue of Units to successful
applicants under the Hong Kong Public Offering. All Sale Units sold by the Joint Global
Coordinators will be subject to stamp duty at the rate of 0.1% of the Offer Price, which will be borne
by GZI. Subsequent dealings in Units will also be subject to Hong Kong stamp duty.



                                                  36
                INFORMATION ABOUT THIS OFFERING CIRCULAR
                        AND THE GLOBAL OFFERING

Professional Tax Advice Recommended


     Persons who are unsure about the taxation implications of the subscription, purchase,
holding, disposal of, dealing in, or the exercise of any rights in relation to the Units should consult
a professional adviser.


     GZI REIT, the Manager, the Trustee, the Listing Agent, the Directors, the Underwriters and
any other person involved in the Offering do not accept responsibility for any tax effects on or
liabilities resulting from the subscription for, purchase, holding, disposal of, dealing in or the
exercise of any rights in relation to the Units.


Offer Price


     The Maximum Offer Price is HK$3.075 and the Offer Price is expected to be determined by
agreement between GZI, the Manager and the Joint Global Coordinators (on behalf of the
Underwriters) on the Price Determination Date. (See the section headed “Structure of The Global
Offering” in this Offering Circular.)


     All applicants are required to pay the Maximum Offer Price of HK$3.075 per Unit (plus
brokerage of 1.0%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy
of 0.005%), subject to an appropriate refund if the Offer Price is less than the Maximum Offer
Price. (See the sub-section headed “Procedures for Application for Hong Kong Public Offering
Units” immediately below.)


Procedures for Application for Hong Kong Public Offering Units


     The procedures for applying for the Hong Kong Public Offering Units are set out in the
sections headed “How to Apply for Hong Kong Public Offering Units” and “Further Terms and
Conditions of the Hong Kong Public Offering” in this Offering Circular and in the relevant
Application Forms.


     The Joint Global Coordinators will have full discretion to reject any application for Hong Kong
Public Offering Units in full or in part.


Conditions of the Hong Kong Public Offering


     Details of the conditions of the Hong Kong Public Offering are set out in the sections headed
“Structure of The Global Offering — Conditions of the Hong Kong Public Offering” and “Further
Terms and Conditions of the Hong Kong Public Offering” in this Offering Circular.




                                                  37
               INFORMATION ABOUT THIS OFFERING CIRCULAR
                       AND THE GLOBAL OFFERING

Structure of the Global Offering


     Details of the structure of the Global Offering, including its conditions, are set out in the
section headed “Structure of The Global Offering” in this Offering Circular.


Exchange Rates


      Save for the section headed “Manager’s Discussion and Analysis of Financial Condition and
Results of Operations” in this Offering Circular, relevant Renminbi amounts have been translated
into, and presented as, Hong Kong dollar amounts based on an exchange rate of HK$1.00 =
RMB1.04.


Tenants’ Names and Business Sectors


     Certain tenants in the Properties do not have English names. Translations of the Chinese
names of these tenants have been provided in this Offering Circular for the convenience of
readers. Such translations have not been approved by the relevant tenants.


     This Offering Circular contains certain information with respect to the business sub-sectors
of certain tenants in the Properties. The Manager has determined the business sub-sectors in
which these tenants are primarily involved based on the Manager’s general understanding of the
business activities conducted by such tenants in the premises occupied by them. The Manager’s
knowledge of the business activities of such tenants is necessarily limited and such tenants may
conduct business activities that are in addition to, or different from, those indicated herein.


Terms and Conventions


     References in this Offering Circular to monthly base rent for September 2005 are references
to the monthly Rental Income from the Properties or relevant Property (as the case may be) as
provided for in the leases which are effective as at 30 September 2005, exclusive of any rent free
periods and rental escalations or discounts.


    Unless otherwise stated, figures and amounts in this Offering Circular have been rounded to
one decimal place.




                                               38
                 PARTIES INVOLVED IN THE GLOBAL OFFERING

GZI REIT                              As constituted by the Trust Deed entered into on 7   App B
                                                                                           B4
                                      December 2005 in Hong Kong (a Hong Kong collective
                                      investment scheme authorised under section 104 of
                                      the SFO)

Manager                               GZI REIT Asset Management Limited                    App B B1

                                      2102, Yue Xiu Building
                                      160 Lockhart Road
                                      Wanchai
                                      Hong Kong

Directors

Executive Directors                   LIANG Ning Guang (Chairman) (            )
                                      LIU Yong Jie (   )

Non-executive Director                LIANG You Pan (      )

Independent non-executive Directors   CHAN Chi On, Derek (             )
                                      LEE Kwan Hung, Eddie (               )
                                      CHAN Chi Fai, Brian (            )

Responsible Officers of the Manager LIANG Ning Guang (             )
                                    LIU Yong Jie (     )
                                    LAU Jin Tin, Don (         )

Vendor of the Properties              Guangzhou Construction & Development Holdings
                                      (China) Limited
                                      Akara Building, 24 De Castro Street
                                      Wickhams Cay I
                                      Road Town, Tortola
                                      British Virgin Islands

Leasing Agents                        Guangzhou Yicheng Property Management Ltd.           App B B4 (c)
                                      (                     )
                                      Nos. 19-21 Tian He Nan Second Road
                                      7th Floor, Hong Fa Plaza
                                      Tian He District
                                      Guangzhou
                                      People’s Republic of China

                                      Guangzhou White Horse Property Management Co.
                                      Ltd. (                     )
                                      No. 16 Zhan Nan Road
                                      Yue Xiu District
                                      Guangzhou
                                      People’s Republic of China




                                           39
                 PARTIES INVOLVED IN THE GLOBAL OFFERING

Unit Registrar                       Tricor Investor Services Limited                      App B B4 (f)
                                     Ground Floor, Bank of East Asia Harbour View Centre
                                     56 Gloucester Road
                                     Wanchai
                                     Hong Kong

Trustee                              HSBC Institutional Trust Services (Asia) Limited      App B B1, B4 (b)
                                     1 Queen’s Road Central
                                     Central
                                     Hong Kong

Joint Global Coordinators and        The Hongkong and Shanghai Banking
Joint Bookrunners                    Corporation Limited
                                     1 Queen’s Road Central
                                     Central
                                     Hong Kong

                                     Citigroup Global Markets Asia Limited
                                     50th Floor, Citibank Tower
                                     Citibank Plaza
                                     3 Garden Road
                                     Central
                                     Hong Kong

                                     DBS Bank Ltd.
                                     16th Floor
                                     Man Yee Building
                                     68 Des Voeux Road Central
                                     Central
                                     Hong Kong

Listing Agent                        The Hongkong and Shanghai Banking
                                     Corporation Limited
                                     1 Queen’s Road Central
                                     Central
                                     Hong Kong

Financial Adviser to GZI             DBS Bank Ltd.
                                     16th Floor
                                     Man Yee Building
                                     68 Des Voeux Road Central
                                     Central
                                     Hong Kong

Auditors and Reporting Accountants PricewaterhouseCoopers                                  App B B4 (e)
                                   Certified Public Accountants
                                   22nd Floor, Prince’s Building
                                   Central
                                   Hong Kong




                                           40
               PARTIES INVOLVED IN THE GLOBAL OFFERING

Legal Advisers to the Manager        As to Hong Kong and English law
                                     Paul, Hastings, Janofsky & Walker
                                     22nd Floor, Bank of China Tower
                                     1 Garden Road
                                     Central
                                     Hong Kong

                                     As to PRC law
                                     Z & T Law Firm (                     )
                                     21st Floor, Yuehai Building
                                     472 Huanshi Road East
                                     Guangzhou
                                     People’s Republic of China

Legal Adviser to GZI                 As to Hong Kong law
                                     Baker & McKenzie
                                     14th Floor, Hutchison House
                                     10 Harcourt Road
                                     Central
                                     Hong Kong

Legal Advisers to the Joint Global   As to Hong Kong and English law
Coordinators                         Allen & Overy
                                     9th Floor, Three Exchange Square
                                     Central
                                     Hong Kong

                                     As to PRC law
                                     King & Wood (              )
                                     31st Floor, Tower A
                                     Jianwai SOHO
                                     39 Dongsanhuan Zhonglu
                                     Chaoyang District
                                     Beijing 100022
                                     People’s Republic of China

Legal Adviser to the Trustee         As to Hong Kong and English law
                                     Simmons & Simmons
                                     35th Floor, Cheung Kong Centre
                                     2 Queen’s Road Central
                                     Hong Kong

Independent Property Valuer          Colliers International (Hong Kong) Ltd   App B B4 (d)

                                     Suite 5701, Central Plaza
                                     18 Harbour Road
                                     Wanchai
                                     Hong Kong




                                           41
               PARTIES INVOLVED IN THE GLOBAL OFFERING

Independent Market Research   Cushman & Wakefield (HK) Limited
Consultant                    6th Floor, Henley Building
                              5 Queen’s Road Central
                              Hong Kong

Property Adviser              Jones Lang LaSalle Limited
                              28th Floor, One Pacific Place
                              88 Queensway
                              Hong Kong

Principal Bankers             Citibank, N.A., Hong Kong Branch
                              50th Floor, Citibank Tower
                              Citibank Plaza
                              3 Garden Road
                              Central
                              Hong Kong

                              The Hongkong and Shanghai Banking
                              Corporation Limited
                              1 Queen’s Road Central
                              Central
                              Hong Kong

                              DBS Bank Ltd.
                              16th Floor
                              Man Yee Building
                              68 Des Voeux Road Central
                              Central
                              Hong Kong

Receiving Bankers             The Hongkong and Shanghai Banking
                              Corporation Limited
                              1 Queen’s Road Central
                              Central
                              Hong Kong

                              Bank of China (Hong Kong) Limited
                              1 Garden Road
                              Central
                              Hong Kong

                              Bank of Communications Co., Ltd., Hong Kong Branch
                              23rd Floor, Bank of Communications Tower
                              20 Pedder Street
                              Central
                              Hong Kong




                                    42
                                        RISK FACTORS

                                                                                                        App B
 An investment in the Units involves significant risks, including specific risks relating to overseas   B2 (e)
                                                                                                        B3
 property investments. Prospective investors should consider carefully, together with all other         B21
 information contained in this Offering Circular, the risk factors described below before deciding
 to invest in the Units.

 The key objective of GZI REIT is to provide investors with stable distributions per Units with the
 potential for sustainable long term growth of such distributions. Accordingly, investors should
 not expect to obtain short term capital gains.

 Investors should be aware that the price of units in a collective investment scheme, and the
 income from them, may rise or fall. Investors should note that they may not get back their
 original investments and that they may not receive any distributions.

 Before deciding to invest in the Units, prospective investors should seek professional advice
 from their relevant advisers regarding their prospective investment in the context of their
 particular circumstances.

Risks Relating to GZI REIT’s Organisation and Operations


Neither GZI REIT nor the Manager, as newly established entities, has an established
operating history for investors to rely on in making an investment decision.


     The Manager was incorporated on 3 October 2005 and GZI REIT was established on 7
December 2005. While GZI previously owned and managed the Properties through various
subsidiaries, GZI REIT only acquired the BVI Company Shares on 7 December 2005. As such,
neither GZI REIT nor the Manager has a substantial operating history by which their past
performance may be judged. This will make it more difficult for investors to assess their likely
future performance. There can be no assurance that GZI REIT will be able to generate sufficient
revenue from operations to make distributions to Unitholders or that such distributions will be in
line with those set out in the section headed “Profit Forecast” in this Offering Circular.


The REIT Code has a limited history and the application and interpretation of its provisions
may be uncertain.


      The SFC is empowered under section 104(1) of the SFO to authorise collective investment
schemes, subject to such conditions as it considers appropriate. The REIT Code, to which GZI
REIT is subject, was published by the SFC in August 2003 and revised in June 2005. The REIT
Code does not have the force of law and, due to its limited history, there may be uncertainties in
relation to the interpretation and manner of enforcement of the provisions set out therein. The SFC
may, after public consultation, amend the provisions set out in the REIT Code. The SFC reserves
the right to review its authorisation of GZI REIT and may amend the conditions of such
authorisation or withdraw such authorisation as it considers appropriate. Furthermore, no
assurance can be given that future legislation, administrative rulings, court decisions or changes
to the REIT Code will not adversely affect the financial condition and results of operations of GZI
REIT or an investment by a Unitholder.



                                                 43
                                          RISK FACTORS

The Manager’s operations are subject to regulation and its licensing conditions.


      The Manager is required to be licensed under the SFO for the regulated activity of asset
management. Although the Manager believes that it will be operated and managed in a manner so
as to remain licensed, no guarantee can be given that it will be able to operate and manage itself
in such a manner so as to remain licensed. For example, the departure of a Responsible Officer
of the Manager may result in the loss of the Manager’s licence to act as the manager of GZI REIT.
In the event that the Manager ceases to be licensed under the SFO, GZI REIT may need to appoint
another management company, which may materially and adversely affect the financial condition
and results of operations of GZI REIT. In the event no other management company duly qualified
under the REIT Code and acceptable to the SFC is willing to take the place of the existing Manager
within 60 Business Days of the removal or retirement of the Manager (or such longer period as the
Trustee considers appropriate), the Trustee may terminate GZI REIT.


The Manager may not be able to achieve its objectives.


       The Manager’s key objective for GZI REIT is to provide Unitholders with stable distributions
per Unit with the potential for sustainable long term growth of such distributions. While the
Manager has established clear plans and specific strategies to accomplish this objective, it would
be difficult to offer any assurance that it will be able to implement successfully such plans or that
it will be able to do so in a timely and cost effective manner. Some of the cost efficiencies and
revenue enhancements that the Manager aims to achieve from such changes may therefore not
be realisable within the expected time frame, if at all.


       In respect of the Manager’s investment strategy of growing GZI REIT’s portfolio of properties
initially in Guangdong province, there can be no assurance that the Manager will be able to
implement this strategy successfully or that it will be able to expand GZI REIT’s portfolio at any
specified rate, to any specified size or at all. GZI REIT may also be unable to make investments
or acquisitions on favourable terms in a desired time frame. Although GZI has granted to GZI REIT
a right of first refusal (subject to earlier termination in certain circumstances), conditional on listing
of the Units on the Hong Kong Stock Exchange and subject to certain other conditions, to acquire
certain properties in Guangzhou (see the section headed “Material Agreements and Other
Documents Relating to GZI REIT — Deed of Right of First Refusal” in this Offering Circular), there
is no certainty that a property offered to GZI REIT under this right of first refusal will eventually be
acquired by GZI REIT because, for example, the results of the Manager’s due diligence on the
property may be unsatisfactory. Moreover, this right of first refusal will terminate five years after
the Listing Date, or earlier if the Units cease to be listed on the Hong Kong Stock Exchange or the
entity which is the Manager of GZI REIT ceases to be a subsidiary of any member of the GZI Group
or Yue Xiu and its subsidiaries.


     GZI REIT will primarily rely on external sources of funding to expand its portfolio, which may
not be available on favourable terms or at all. Even if GZI REIT were able to complete additional
property investments successfully, there can be no assurance that GZI REIT will achieve its
intended return on such investments. Since the amount of debt GZI REIT can incur to finance
acquisitions is limited, such acquisitions will be dependent on GZI REIT’s ability to raise equity



                                                   44
                                        RISK FACTORS

capital, which may result in a dilution of Unitholders’ holdings. Potential vendors may also view
negatively the timing and uncertainty of any proposal to raise equity capital to fund any such
purchase and may prefer other potential purchasers. Furthermore, there may be significant
competition for attractive investment opportunities from other property investors, including
commercial property development companies and private investment funds. There can be no
assurance that GZI REIT will be able to compete effectively against such entities.


      In relation to the Manager’s aim of achieving an optimal capital structure for GZI REIT, its
ability to do so will depend upon, among other things, whether GZI REIT will be subject to financial
covenants under existing borrowings and other limitations on effecting further desired borrowings,
whether GZI REIT will be able to raise any additional equity funding and whether such fund raising
exercises can be effected on favourable terms.


    Moreover, GZI REIT’s structure, strategies and investment policies are constrained by the
REIT Code which, for instance, limits GZI REIT’s borrowings to no more than 45.0% of its total
gross asset value and requires GZI REIT to distribute to Unitholders as distributions an amount no
less than 90.0% of its audited net income after tax for each Financial Year. Such restrictions may
affect the operations of GZI REIT and restrict its ability to achieve its strategies in a timely manner
or at all.


    If the Manager is unsuccessful in implementing its strategies, GZI REIT’s business, financial
condition and results of operations could be materially and adversely affected, the price of Units
could decrease and distributions could be constrained.


There are limitations on GZI REIT’s ability to leverage.                                                  GP 8



    GZI REIT is expected to use leverage in connection with its investments. Borrowings by GZI            RC 7.9

REIT are limited by the REIT Code to no more than 45.0% of its total gross asset value. There can
be no assurance that GZI REIT’s borrowings will not exceed 45.0% of its gross asset value
following any revaluation of its assets and/or liabilities. From time to time GZI REIT may need to
draw down on its banking facilities and use overdrafts but may be unable to do so due to the 45.0%
borrowing limit. GZI REIT may also face difficulties in securing timely and commercially favourable
financing in asset-backed lending transactions secured by real estate.


      In addition, the use of leverage may increase the exposure of GZI REIT to adverse economic
factors such as rising interest rates and economic downturns. Generally, GZI REIT is subject to
general risks associated with debt financing, including the risk of: (i) there being insufficient cash
flow to meet loan repayments; and (ii) not being able to maintain debts at optimum levels in the
future due to the lack of capacity in the lending market.




                                                  45
                                        RISK FACTORS

GZI REIT faces risks associated with debt financing.

     On the Listing Date, GZI REIT is expected to have aggregate external borrowings of
US$165.0 million (HK$1,287.0 million), or approximately 32.1% of the Appraised Value of the
Properties. The Loan Facility will be secured on, among other things, the Properties and the BVI
Company Shares (see the section headed “Material Agreements and Other Documents Relating
to GZI REIT — Facility Agreement” in this Offering Circular). GZI REIT may, from time to time,
require additional debt financing to achieve the Manager’s investment strategies.

      GZI REIT will be subject to risks normally associated with debt financing, including the risk
that its cash flow may be insufficient to meet required payments of principal and interest under
such financing at expected levels and to make distributions. If payments due under the Loan
Facility cannot be made, the Lending Banks may declare a default and enforce any security
provided in respect of such borrowings. Also, if certain financial covenants under the Facility
Agreement are breached, the Lending Banks may declare an event of default, demand the
immediate repayment of all outstanding loans and other sums under the Facility Agreement and
enforce the security provided in respect of the Loan Facility. (See the section headed “Material
Agreements and Other Documents Relating to GZI REIT — Facility Agreement” in this Offering
Circular.)

      GZI REIT will also be subject to the risk that it may not be able to refinance its existing
borrowings or that the terms of such refinancing will not be as favourable as the terms of the
existing borrowings. In addition, GZI REIT may be subject to certain covenants in connection with
any future borrowings that may limit or otherwise adversely affect the operations of the BVI
Companies. Such covenants may restrict GZI REIT’s ability to acquire properties, to declare
distributions or to pay distributions (even where distributions have previously been declared, in
which case such distributions shall be accrued), or the ability of Partat, Moon King, Full Estates
and Keen Ocean to undertake capital expenditures, or may require them to set aside funds for
maintenance or repayment of security deposits. Further, there is the risk of movements in short
term interest rates adversely affecting floating rate borrowings by GZI REIT. There is also the risk
that movements in the US dollar/Renminbi exchange rate may adversely affect repayments of US
dollar borrowings by GZI REIT. As at the Listing Date, 100.0% of GZI REIT’s borrowings will be
denominated in US dollars.

      If principal amounts due for repayment at maturity cannot be refinanced, extended or paid
with proceeds of other capital transactions such as new equity capital, GZI REIT will not be able
to pay distributions at expected levels or to repay all maturing debt. Further, if prevailing interest
rates or other factors at the time of refinancing (such as the possible reluctance of lenders to make
commercial property loans) result in higher interest rates upon refinancing, the interest expense
relating to such refinanced indebtedness would increase, thereby adversely affecting GZI REIT’s
cash flow and the amount of funds available for distribution to Unitholders.

     If a property is mortgaged to secure payment of GZI REIT’s indebtedness and interest or
principal payments cannot be met, that property could be foreclosed by the lender or the lender
could require a forced sale of the mortgaged property, which could have a material adverse effect
on GZI REIT’s business and financial conditions and results of operations.



                                                 46
                                         RISK FACTORS

The Manager may change GZI REIT’s investment strategies.


      While the Manager has stated its intention to restrict GZI REIT’s investments to office, retail
and other commercial property initially in Guangdong province, subject to the requirements of the
REIT Code, the Trust Deed, the Listing Agreement and applicable law, the Manager has absolute
discretion to determine the investment strategy of GZI REIT (although the investment objectives
and policy may only be changed with Unitholders’ approval by Special Resolution). Furthermore,
as with other investment decisions, there are risks and uncertainties with respect to the selection
of investments and with respect to the investments themselves.


GZI REIT depends on certain key personnel of the Manager, and the loss of any such key
personnel may adversely affect its business and financial conditions and results of
operations.


     GZI REIT’s success depends, in part, upon the continued service and performance of the
Manager’s senior management team and certain other key personnel, including the Responsible
Officers of the Manager (currently, Mr Liang Ning Guang, Mr Liu Yong Jie and Mr Lau Jin Tin, Don).
These individuals may leave the Manager in the future and compete with GZI REIT. The loss of any
of these individuals could have a material adverse effect on GZI REIT’s business and financial
conditions and results of operations.


GZI REIT relies on Yicheng and White Horse Property Management Company to provide
property management, leasing, marketing and tenancy management services.


       Yicheng and White Horse Property Management Company provide property management,
leasing, marketing and tenancy management services in respect of the Properties. Yicheng and
White Horse Property Management Company may experience financial or other difficulties that
may affect their ability to carry out the work for which they were contracted, thus affecting the
condition and performance of the Properties or resulting in additional costs for GZI REIT. If GZI
REIT loses the services provided by Yicheng and White Horse Property Management Company,
it may not be able to secure such services from other service providers on comparable terms, or
at all. If GZI REIT fails to secure services of a comparable quality, its financial condition and results
of operations will be adversely affected.


Competition with GZI relating to property acquisitions and tenants.


     GZI, its subsidiaries and associates are engaged in, among other things, investment in, and
the development and management of, commercial properties. As a result, there may be
circumstances where GZI REIT competes directly with GZI and/or its subsidiaries or associates for
property acquisitions and tenants. Moreover, GZI may in the future invest in other real estate
investment trusts which may compete directly with GZI REIT. Although GZI has initiated internal
restructuring arrangements which will result in the leasing and marketing of GZI’s properties and
GZI REIT’s properties being handled by different companies within the GZI Group, there can be
no assurance that the interests of GZI REIT will not conflict with or be subordinated to those of GZI
in such circumstances.



                                                   47
                                         RISK FACTORS

GZI REIT will be more reliant on some of the Properties for a substantial portion of Rental                App B
                                                                                                           B20 (a)
Income and a decline in the contribution such Properties make to Rental Income will
adversely affect GZI REIT.


     While GZI REIT’s initial portfolio will comprise four properties, it will initially be dependent on
the White Horse Units for a substantial portion of its Rental Income. For the six months ended 30
June 2005, the White Horse Units accounted for approximately 60.1% of Gross Turnover (before
accelerated amortisation of deferred assets) generated by the Properties (see Appendix I to this
Offering Circular); for the Forecast Year 2006, the White Horse Units will account for
approximately 66.6% of GZI REIT’s Rental Income (see the section headed “Profit Forecast” in this
Offering Circular).


      Various factors, such as physical damage resulting from fire or other causes, a downturn in
the garment wholesale industry or the loss of a significant number of tenants, may cause a
significant disruption to the business and operations of the White Horse Units. In the event such
disruption occurs at the White Horse Units and the resulting losses are not compensated or fully
compensated by insurance proceeds (see the risk factor headed “GZI REIT may suffer material
losses in excess of insurance proceeds” below), its contributions to GZI REIT’s Rental Income will
be reduced and this will have an adverse effect on GZI REIT’s business and financial conditions
and results of operations.


The high concentration of lease expiries in the White Horse Units exposes GZI REIT to a
higher risk of vacancy following non-renewal, non-replacement or early termination of
leases.


    1,307 of the 1,311 current leases in the White Horse Units will terminate on 31 December
2005. These leases account for 99.9% of the total base rent of the White Horse Units for
September 2005. 1,246 (95.3%) of these expiring leases have been renewed and 47.1% of the
new leases will terminate on 31 December 2009 while the rest will terminate on 31 December
2010.


      The typical tenancy agreement for the White Horse Units provides that if a tenant wishes to
terminate its lease before the expiry of the lease term, the tenant must submit a written application
to the landlord at least one month prior to the proposed termination date, and obtain the consent
of the landlord for such termination. Such consent had, in the past, been granted on a case by
case basis, particularly if the tenant was able to procure a replacement tenant to enter into a new
lease for the same premises on the same terms and conditions (save that the duration of the new
lease would be for the unexpired term of the original lease). In such cases, the departing tenant
had to pay an administrative fee equivalent to 1.5 month’s rent. If the landlord does not consent
to such early termination, the parties will resolve the issue by discussion. In the event that the
landlord continues to withhold consent after such discussion and the tenant still departs, all or a
portion of its security deposit will be forfeited without interest in accordance with the terms of the
lease and the landlord retains a legal right to require settlement of all unpaid amounts. There is
no assurance that any such unpaid amounts can be fully recovered or at all.



                                                  48
                                        RISK FACTORS

     The high concentration of lease expiries in the White Horse Units exposes GZI REIT to
certain risks, including a higher risk of vacancies following non-renewal, non-replacement or early
termination of leases, which may lead to reduced occupancy levels and, in turn, reduce GZI REIT’s
Rental Income. If a large number of tenants in the White Horse Units do not renew their leases at
the end of a lease cycle or a significant number of early terminations occur, and replacement
tenants cannot be found, there is likely to be a material adverse effect on the White Horse Units,
which could affect GZI REIT’s business and financial conditions and results of operations (see the
section headed “The Properties and Business — White Horse Units — Expiries and Renewals” in
the Offering Circular for further information about tenancy renewal rates in the White Horse Units).


The sharp increase in rental rates for the leases in the White Horse Units commencing on
1 January 2006 may not be replicated in future.


    1,246 of the 1,307 leases in the White Horse Units which are expiring on 31 December 2005
have been renewed at rental rates which are on average 50.0% to 100.0% higher than the rental
rates of the expiring leases. These increases were primarily attributable to the fact that, with
99.7% of the leases in the White Horse Units expiring on 31 December 2005, the Manager took
the opportunity to bring the existing rental rates to the market level. There is no assurance that
future renewals of such leases can achieve similar increases in rental rates.


GZI REIT is dependent on the performance of its tenants and its ability to make distributions
may be adversely affected by the loss of its tenants or a downturn in the business of its
tenants.


     GZI REIT is dependent to a significant degree on a limited number of tenants. For example,
the ten largest tenants in the Properties in terms of monthly base rent for September 2005
accounted for 19.6% of the monthly base rent of the Properties for September 2005. GZI REIT’s
financial condition, results of operations and ability to make distributions may be adversely
affected by the insolvency or downturn in the business of tenants whose rents make up a material
proportion of the operating income of the Properties, including the decision by such tenants not to
renew their leases or to terminate their leases before they expire (see the section headed “The
Properties and Business — Tenancy Agreements” in this Offering Circular). In the event of defaults
by tenants whose rents make up a material proportion of the operating income of the Properties,
the BVI Companies are likely to experience costs in enforcing their rights as lessor. Generally,
upon any failure by a tenant to pay rent, a lessor may bring an action against such tenant at the
People’s Court in the PRC. Only in the event that the tenant fails to pay its rent for a total of six
months, does the lessor have the right to terminate the tenancy agreement and repossess the
property even though PRC law only permits lessors to demand a security deposit of not more than
three months. Upon such termination, if the tenant refuses to pay rents or vacate the property, the
lessor may apply to the court to enforce the civil judgement obtained. Also, if tenants in the
Properties renew their leases but reduce their leased space, there could be a material adverse
effect on the business and financial conditions and results of operations of GZI REIT.




                                                 49
                                        RISK FACTORS

GZI REIT may not be able to pass certain critical decisions in the owners’ committees of
Fortune Plaza and City Development Plaza.


     The Fortune Plaza Units represent 50.2% of the total Gross Floor Area in respect of Fortune
Plaza. The City Development Plaza Units represent 57.3% of the total Gross Floor Area in respect
of City Development Plaza.


      GCCD holds certain other portions of Fortune Plaza and City Development Plaza that do not
generate significant levels of rental or other income, or are used for GCCD’s own purposes. These
portions have not been injected into GZI REIT (see the sections headed “The Properties and
Business — The Properties” in this Offering Circular). However, GCCD has irrevocably granted
Moon King and Full Estates the right to attend meetings of the owners’ committees of, respectively,
Fortune Plaza and City Development Plaza on its behalf and to exercise its voting rights at such
meetings in any manner deemed fit by Moon King or, as the case may be, Full Estates. GCCD has
also undertaken to Moon King and Full Estates that, if it transfers its portions of Fortune Plaza or
City Development Plaza to a third party, on the basis that there is no material prejudice to the
lawful rights and interests of GCCD, it shall use its best endeavours to secure an undertaking from
the transferee in favour of Moon King or, as the case may be, Full Estates on similar terms. With
these rights, Moon King will be able to exercise voting rights in respect of approximately 65.1% of
the Gross Floor Area of Fortune Plaza and Full Estates will be able to exercise voting rights in
respect of approximately 74.1% of the Gross Floor Area of City Development Plaza.


     Notwithstanding the foregoing, there is no assurance that GCCD will be able to secure a
similar undertaking from the person to whom it may sell its portion of Fortune Plaza. In any case,
GZI REIT may not be able to pass certain critical decisions in meetings of the owners’ committee
of Fortune Plaza where such decisions require the consent of the owners of at least two-thirds of
the Gross Floor Area of the building, e.g. GZI REIT may not be able to terminate the services of
Fortune Plaza’s property manager even if the property manager is not performing at the expected
level if the other owners of the building decide against such termination.


     Although, with the attendance and voting rights granted by GCCD to Full Estates as
described above, GZI REIT will be able to exercise more than two-thirds of the voting rights in the
owners’ committee of City Development Plaza, there is no assurance that GCCD will be able to
secure a similar undertaking from the person to whom it may sell its portion of City Development
Plaza. In such circumstances, Full Estates will lose its ability to carry decisions which require the
consent of owners of at least two-thirds of the Gross Floor Area of City Development Plaza.


GZI REIT will be unable to carry any decisions in the owners’ committee of Victory Plaza.


     The Victory Plaza Units will represent approximately 19.5% of the total Gross Floor Area in
respect of Victory Plaza when the two office tower blocks are completed. Such completion is
currently expected to take place in 2007.




                                                 50
                                        RISK FACTORS

      Although GCCD (as the developer of Victory Plaza) has agreed that Keen Ocean shall have
(i) the exclusive right to use, and to enjoy all proceeds (comprising mainly advertising income)
arising from the use of, the common area within the podium as well as the internal and external
walls of the podium; and (ii) the exclusive right to decide on all other operational matters relating
only to the podium, Keen Ocean will itself be unable to carry any decisions in the owners’
committee of Victory Plaza where such decisions relate to the building as a whole.

The full rate of withholding tax of 20.0% for foreign enterprises may be applied and/or the
BVI Companies could be deemed as having permanent establishments in the PRC and be
subject to income tax in the PRC based on their deemed profits, either of which could have
a material adverse effect on GZI REIT’s income.

     GZI REIT will primarily rely on dividend payments from the BVI Companies for its income.
Each of the BVI Companies is currently charged a concessionary rate of 10.0% of its gross Rental
Income (with no deductions for expenses or allowances except for business tax). The full rate of
withholding tax (20.0%) for these BVI Companies may be applied instead of the current
concessionary rate of 10.0%.

     Further, each of the BVI Companies is currently treated as not having a permanent
establishment in the PRC in respect of its property leasing activities. If the BVI Companies are
subsequently deemed as having permanent establishments in the PRC, they may be subject to
income tax in the PRC at the rate of 33.0% of their deemed profits (which may, at the determination
of the relevant tax authority, range between 20.0% and 40.0% of their gross Rental Income).

     Should any of these events occur, the level of after-tax profit or surplus of each of the BVI
Companies available for distribution (by way of dividend payment) could be reduced substantially.
There can be no assurance that the profits tax rate or the rate of withholding tax in the PRC will
not change in a manner which may adversely affect GZI REIT’s income.

A sale by the BVI Companies of the Properties held by them will be subject to land
appreciation tax and income tax.

      If, in the future, any of the BVI Companies sells the Property which it holds at a price which
is higher than the book value of such Property, the relevant BVI Company will be liable in the PRC
for land appreciation tax and income tax in respect of the difference between the sale price of the
relevant Property and its book value (see the section headed “Taxation” in this Offering Circular
for further information about such taxes).

Risks Relating to Investing in Real Estate

There are general risks attached to investments in real estate.

      Investments in real estate are subject to various risks, including: (i) adverse changes in
national or economic conditions; (ii) adverse local market conditions; (iii) the financial conditions
of tenants as well as buyers and sellers of properties; (iv) changes in availability of debt financing;
(v) changes in interest rates and other operating expenses; (vi) changes in environmental laws



                                                  51
                                        RISK FACTORS

and regulations, zoning laws and other governmental rules and fiscal policies; (vii) environmental
claims arising in respect of real estate acquired with undisclosed or unknown environmental
problems, which are located on contaminated properties or as to which inadequate reserves had
been established; (viii) changes in energy prices; (ix) changes in the relative popularity of property
types and locations leading to an oversupply of space or a reduction in tenant demand for a
particular type of property in a given market; (x) competition among property owners for tenants;
(xi) insufficiency of insurance coverage; (xii) inability of the Manager to provide or procure the
provision of adequate maintenance and other services; (xiii) illiquidity of real estate investments;
(xiv) considerable dependence on cash flow for the maintenance of, and improvements to, the
portfolio properties; (xv) risks and operating problems arising out of the presence of certain
construction materials; (xvi) disruptions caused by municipal construction projects in the vicinity
of such real estate; and (xvii) acts of God, uninsurable losses and other factors.


     Many of these factors may cause fluctuations in occupancy rates, rent schedules or operating
expenses, causing a negative effect on the value, rental rates and occupancy rates of property and
income derived from property. The annual valuation of the Properties will reflect such factors and
as a result may fluctuate upwards or downwards. The capital value of GZI REIT’s properties may
be significantly diminished in the event of a sudden downturn in property prices or the economy
in the cities or provinces where such properties are located.


Income from, and expenditures in relation to, the Properties may not be as expected, which               App B
                                                                                                         B20 (a)
may adversely affect the financial condition of GZI REIT.


    Income from the Properties may be adversely affected by the general economic climate, local
conditions such as over-supply of properties or reduction in demand for properties in the market
in which GZI REIT operates, the attractiveness of GZI REIT’s properties to tenants, management
style, competition from other available properties, untimely collection of rent, changes in laws and
increased operating costs and expenses. In addition, income from real estate may be affected by
such factors as the cost of regulatory compliance, interest rate levels and the availability of
financing. GZI REIT’s income would be adversely affected if a significant number of tenants were
unable to pay rent or its properties could not be rented out on favourable terms.


     If the Properties do not generate revenues sufficient to meet operating expenses, including
debt service and capital expenditure, GZI REIT’s ability to make distributions will be adversely
affected. In terms of expenditure, capital expenditure and other expenses may be irregular since
continuing repairs and maintenance involve significant, and potentially unpredictable,
expenditure. Both the amount and timing of expenditure will have an impact on the cash flow of
GZI REIT. Physical defects relating to the Properties may thus have an adverse effect on the
financial condition of GZI REIT. Increases in certain significant expenditures associated with
investments in real estate (such as insurance costs and operating and maintenance costs) may
cause a reduction in income from a property, which could have an adverse effect on the financial
condition and results of operations of GZI REIT.




                                                 52
                                         RISK FACTORS

GZI REIT may be adversely affected by the illiquidity of real estate investments.

     Real estate investments are relatively illiquid. Further, in accordance with the REIT Code,
GZI REIT is prohibited from disposing of its properties for at least two years from the time they are
acquired unless Unitholders have passed a Special Resolution consenting to the proposed
divestment. Such illiquidity may affect GZI REIT’s ability to vary its investment portfolio or liquidate
part of its assets in response to changes in economic, financial, real estate market or other
conditions. Also, the eventual liquidity of all investments of GZI REIT will be dependent upon the
success of the realisation strategy proposed for each investment, which could be adversely
affected by a variety of factors. For instance, GZI REIT may be unable to liquidate its assets on
short notice, or may be forced to give a substantial reduction in the price that may otherwise be
sought for such assets to ensure a quick sale. These factors could have an adverse effect on GZI
REIT’s financial condition and results of operations.

GZI REIT may suffer material losses in excess of insurance proceeds.

      The Properties could suffer physical damage caused by fire or other causes, and GZI REIT,
Holdco or the BVI Companies may suffer public liability claims, resulting in losses (including loss
of rent) which may not be fully compensated by insurance proceeds. In addition, certain types of
risks (such as war risk, risk of nuclear contamination, risk of terrorist attacks, risks of earthquakes,
risks of epidemics and acts of God) may be uninsurable or the cost of insurance may be prohibitive
when compared to the risk. Should an uninsured loss or a loss in excess of insured limits occur,
GZI REIT could be required to pay compensation and/or lose capital invested in the affected
property as well as anticipated future revenue from that property. GZI REIT would also remain
liable for any debt or other financial obligation related to that property. No assurance can be given
that material losses in excess of insurance proceeds will not occur in the future.

The Properties or parts thereof may be acquired compulsorily.

      The PRC Government has the power to acquire compulsorily any land in the PRC pursuant
to the provisions of applicable legislation. In the event of any compulsory acquisition of property
in the PRC, the amount of compensation to be awarded is based on the open market value of a
property and is assessed on the basis prescribed in the relevant law. If any of the Properties were
acquired compulsorily by the PRC Government, the level of compensation paid to GZI REIT
pursuant to this basis of calculation may be less than the price which GZI REIT paid for such
Properties.

The Properties are all located in Guangzhou, which exposes GZI REIT to economic and                        App B
                                                                                                           B20 (b)
property market conditions in Guangzhou and the PRC as a whole, as well as to economic
measures implemented by the PRC Government to prevent overheating of the PRC property
market.

     The Properties are all situated in Guangzhou, which exposes GZI REIT to the risk of a
downturn in economic and property market conditions in Guangzhou and the PRC as a whole. The
value of the Properties may be adversely affected by a number of local property market conditions,
such as oversupply, the performance of other competing commercial properties or reduced
demand for commercial space.



                                                  53
                                        RISK FACTORS

     GZI REIT’s business and financial conditions and results of operations also depend, to a
large extent, on the performance of the economy of Guangzhou and of the PRC as a whole. An
economic downturn or a downturn in the property market in Guangzhou and/or the PRC as a whole
could adversely affect GZI REIT. Recent measures introduced by the PRC Government to prevent
overheating of the PRC property market (such as a tax on all properties sold within two years of
being purchased and occupied, limiting monthly mortgage payments to 50.0% of an individual
borrower’s monthly income and limiting all debt service payments of an individual borrower to
55.0% of his monthly income) could significantly depress the property market and, consequently,
affect GZI REIT in the manner aforesaid.


      There are also numerous shopping centres, office buildings and other types of commercial
properties in Guangzhou, including properties owned by GZI, as well as those portions of White
Horse Building, Fortune Plaza, City Development Plaza and Victory Plaza which are not owned by
GZI REIT that compete with the Properties in attracting tenants and cause downward pressure on
rental rates (see the section headed “The Properties and Business — Competition” of this Offering
Circular). In January 2003, the Guangzhou Municipal People’s Government announced the
“Review of Planning of Pearl River New City”, in which Pearl River New City in the Tian He District
was positioned as the core area for future urban development within Guangzhou. The review
highlighted a new urban development scheme for the CBD of Guangzhou, namely the “Guangzhou
Central Business District of the 21st Century”. The main focus of this development scheme will be
centred around the core area of Tian He District (i.e. the Tian He Sports Stadium area) and Pearl
River New City.


      Since 2001, with the improved economic environment in Guangzhou, a significant number of
commercial projects are underway and land transactions are increasing. According to the city’s
urban authority, the current land released in Pearl River New City could potentially provide
substantial office space exceeding 5.0 million sq.m. to be developed in phases spanning up to
fifteen years.


      According to the “Independent Market Research Report in Relation to the Guangzhou
Commercial Property Market” in Appendix VIII to this Offering Circular, there is a wave of new
Grade A office development projects in the pipeline, totalling approximately 1.6 million sq.m., to be
released between 2005 and 2009. This compares with a total of only 1.1 million sq.m. of office
space completed in the past decade. Excluded from the figure for development projects in the
pipeline are a few development schemes that are currently on hold (e.g. due to financial
difficulties); resurrection of these projects may potentially add another 0.3 million sq.m. to the
pipeline. An estimated 88.0% of the total new supply will be located in the Tian He District.
Although this is a large amount of space to be released onto the district in the next few years,
70.0% of the new space will be in the Pearl River New City area of the Tian He District.


     If, after the Global Offering, competing properties of a similar type are built in the areas where
the Properties are located or similar properties in their vicinities are substantially upgraded and
refurbished, the Rental Income from the Properties could be reduced, thereby adversely affecting
GZI REIT’s cash flow and the amount of funds available for distribution to Unitholders.



                                                  54
                                       RISK FACTORS

The PRC property market is volatile.                                                                   App B
                                                                                                       B2 (e)


       GZI REIT is subject to property market conditions in the PRC generally and Guangzhou in
particular. Although there is a perception that economic growth in the PRC and the higher standard
of living resulting from such growth will lead to a greater demand for commercial properties in the
PRC, it is not possible to predict with certainty that such a correlation exists as many social,
economic and other factors may affect the development of the property market.

      The PRC property market is volatile and may experience oversupply and property price
fluctuations. The central and local governments adjust monetary and other economic policies from
time to time to prevent and curtail the overheating of the PRC and local economies, and such
economic adjustments may affect the property market in Guangzhou and other parts of the PRC.
The central and local governments also make policy adjustments and adopt new regulatory
measures from time to time in a direct effort to control the over-development of the property market
in the PRC. Such policies may lead to changes in market conditions, including price instability and
imbalance of supply and demand, which may materially and adversely affect the business and
financial conditions and the results of operations of GZI REIT. Moreover, there is no assurance that
there will not be over-development in the property sector in the PRC in the future. Any future
over-development in the property sector in the PRC may result in an oversupply of properties,
including commercial properties, and a fall of property prices as well as rental rates, which could
adversely affect the business and financial conditions and the results of operations of GZI REIT.

The valuation analysis may prove to be unrepresentative of an investment in GZI REIT.

     The Independent Property Valuer adopted the income capitalisation approach, including
discounted cash flow analysis, in valuing the Properties. These values were cross checked with
available market comparables using the sales comparison approach.

     The discounted cash flow method is based on assumed cash flows from a particular property
over a certain holding period of time that comprise the periodic net operating income (estimated
as gross income less operating expenses and other outgoings) during the holding period and the
terminal value of such property as of the end of the holding period. The capitalisation method
assumes a stable or normalised level of net operating income from a particular property and
discounts the income with an expected rate of return or capitalisation rate.

     The valuation is dependent on, among other things, expenditure forecasts based on building
surveys. (See Appendix VII to this Offering Circular and the risk factor headed “The due diligence
exercise on buildings and equipment may not have identified all material defects, breaches of laws
and regulations and other deficiencies” below.)

      While these forms of analysis allow investors to make an assessment of the long term return
that is likely to be derived from the Properties through a combination of both rental and capital
growth, there can be no assurance that the projected cash flows, the hypothetical terminal value
of the Properties or any of the other assumptions which have been used for the purposes of the
valuation will prove to be accurate or reliable, or that the discount rates adopted by the
Independent Property Valuer will be representative of returns from comparable or alternative forms



                                                55
                                        RISK FACTORS

of investment over the period or periods concerned. Accordingly, the Appraised Value of any of the
Properties is not an indication of, and does not guarantee, that a Property could be sold by GZI
REIT at that price currently or in the future. The price at which GZI REIT may sell a Property (if
at all) may be lower than the purchase price of such Property to be paid by GZI REIT.


The due diligence exercise on buildings and equipment may not have identified all material               App B
                                                                                                         B2 (f)
defects, breaches of laws and regulations and other deficiencies.


      The Independent Property Valuer had conducted a due diligence exercise on the physical
condition of the Properties (see Appendix VII to this Offering Circular). The building defects which
had been identified were either rectified or factored into the purchase price which GZI REIT paid
for the BVI Company Shares under the Reorganisation Deed (see the section headed “Material
Agreements and Other Documents Relating to GZI REIT — Reorganisation Deed” of this Offering
Circular).


      Nevertheless, the due diligence process with respect to the structural condition of the
Properties has been limited as described in the results of the building survey report set out in
Appendix VII to this Offering Circular. For example, the Independent Property Valuer only carried
out an inspection of 20.0% of each of the Properties and did not perform any kind of tests on
building fabrics and building services systems. The Independent Property Valuer also did not
inspect areas which were inaccessible or covered up. There can be no assurance that such
reviews, surveys or inspections have revealed all defects or deficiencies affecting the portfolio of
Properties. In particular, there can be no assurance as to the absence of: (i) latent or undiscovered
defects or deficiencies; or (ii) inaccuracies or deficiencies in such review, survey or inspection
reports, any of which could have a material adverse impact on the operations of the Properties as
well as GZI REIT’s financial condition and results of operations.


     The risk of undisclosed defects, breaches and deficiencies is necessarily increased as a
result of the time interval between completion of the review, survey and inspection process and the
date of this Offering Circular.


Losses or liabilities from latent building or equipment defects may adversely affect
earnings and cash flow.


     Design, construction or other latent property or equipment defects in the Properties may
require additional capital expenditure, special repair or maintenance expenses or the payment of
damages or other obligations to third parties, other than those disclosed in this Offering Circular.
Costs or liabilities arising from such property or equipment defects may involve significant and
potentially unpredictable patterns and levels of expenditure which may have a material adverse
effect on GZI REIT’s earnings and cash flows.


     Statutory or contractual representations, warranties and indemnities given by any seller of
real estate are unlikely to afford satisfactory protection from costs or liabilities arising from such
property or equipment defects.



                                                 56
                                         RISK FACTORS

Distributions to Unitholders will be subject to cash flow.


      GZI REIT’s initial investments are held through Holdco and the BVI Companies, and GZI
REIT will rely, directly or indirectly, on dividend payments and other distributions from Holdco and
the BVI Companies for its income and cash flows. In addition, substantially all of the assets of GZI
REIT consist of its shareholdings in Holdco. In order to meet its payment obligations and to pay
distributions to Unitholders, GZI REIT will rely on the receipt of direct dividends, distributions,
interest or advances from Holdco and, indirectly, the BVI Companies. The ability of Holdco and the
BVI Companies to make such payments may be restricted by, among other things, their respective
business and financial positions, the availability of distributable profits, the availability of foreign
currency, applicable laws and regulations which may restrict the payment of dividends by Holdco
and the BVI Companies, or the terms of agreements to which they are, or may become, a party.


      There can be no assurance that Holdco and the BVI Companies will have sufficient
distributable or realised profits or surplus in any future period to pay dividends, make distributions,
pay interest, or make advances. The level of profit or surplus of Holdco and each BVI Company
available for distribution may be affected by a number of factors including:


     •    operating losses incurred by the company in any Financial Year; and


     •    changes in accounting standards (including standards in respect of depreciation
          policies), taxation laws and regulations, laws and regulation in respect of foreign
          exchange repatriation of funds, corporation laws and regulations relating thereto, in the
          PRC and/or Hong Kong and/or the BVI.


     The occurrence of these or other factors that affect the ability of Holdco and the BVI
Companies to pay dividends or other distributions would adversely affect the level of distributions
paid to Unitholders.


     Moreover, non-cash losses are not reversed from the income statement of GZI REIT when
the Manager calculates GZI REIT’s Total Distributable Income. As such, a downward revaluation
of GZI REIT’s properties could reduce or eliminate the distributions paid to Unitholders.


Fortune Plaza and Victory Plaza have limited operating histories.


     Fortune Plaza and Victory Plaza have limited operating histories with their first tenancies
having commenced in the second half of 2003. As at 30 September 2005, the Fortune Plaza Units
had an occupancy level of 76.9% and the Victory Plaza Units had an occupancy level of 100.0%.
For the six months ended 30 June 2005, the Fortune Plaza Units generated Gross Turnover of
HK$13.3 million and the Victory Plaza Units generated Gross Turnover of HK$12.8 million.


     Given their limited operating histories, there can be no assurance that the Fortune Plaza
Units and the Victory Plaza Units will be able to maintain or improve on their past performance.



                                                  57
                                       RISK FACTORS

Risks Relating to the PRC

     All of the Properties are located in the PRC. Accordingly, GZI REIT’s results of operations,     App B
                                                                                                      B2 (e)
financial position and prospects are subject to a significant degree to the economic and other
developments of the PRC.

The PRC’s economic and other policies could affect GZI REIT’s business.

     The economy of the PRC differs from the economies of most developed countries in many
respects, including:

     •    structure;

     •    level of development;

     •    growth rate;

     •    control of foreign exchange; and

     •    allocation of resources.

     For more than two decades, the PRC Government has implemented economic reform
measures emphasising utilisation of market forces in the development of the PRC economy.
Although the Manager believes these reforms will have a positive effect on its overall and long
term development, it cannot predict whether changes in the PRC’s economic and other policies will
have any adverse effect on GZI REIT’s current or future business and financial conditions and
results of operations. For example, recent measures have been introduced by the PRC
Government to prevent overheating of the PRC property market, including limiting the monthly
mortgage payments to 50.0% of an individual borrower’s monthly income and limiting all debt
service payments of an individual borrower to 55.0% of his monthly income.

There is uncertainty about the quantum of land grant premium which GZI REIT will have to
pay and additional conditions which may be imposed if the Manager decides to seek an
extension of the land use rights for the Properties.

      The Properties are held by the BVI Companies under land use rights granted by the PRC
Government. These rights are for 40 or 50-year terms (see the section headed “The Properties and
Business — Terms of Land Use Rights” in this Offering Circular for the commencement date of the
land use rights for each of the Properties) and, upon the expiration of such terms, the land use
right as well as the ownership of the Properties will revert to the PRC Government unless the land
user applies for an extension of the term of the land use right. If such an application is granted,
the land user will be required, among other things, to pay a land grant premium. As none of the
land use rights granted by the PRC Government thus far has run its full term, there is no precedent
to provide an indication of the quantum of land grant premium which GZI REIT will have to pay and
additional conditions which may be imposed if the Manager decides to seek an extension of the
land use rights for the Properties upon the expiry thereof.



                                                58
                                        RISK FACTORS

Changes in foreign exchange regulations may adversely affect GZI REIT’s results of
operations.


      The BVI Companies receive all their revenue in Renminbi, which will have to be converted to
US dollars to make repayments under the Loan Facility and to Hong Kong dollars for payment as
distributions to Unitholders. Conversion of Renminbi is subject to strict government regulation in
the PRC. Under the existing foreign exchange regulations in the PRC and the approvals already
obtained in respect of the BVI Companies, rental received by the BVI Companies may be
converted into foreign currency without the requirement for further approval from SAFE by
complying with certain procedural requirements, subject to payment of the relevant PRC taxes by
the said entities. There is no assurance that the government policies regarding conversion of
Renminbi into foreign currencies will continue in the future.


Fluctuations in the value of the Renminbi could adversely affect the value of distributions
paid in respect of the Units in Hong Kong dollars and/or the ability of GZI REIT to make
repayments under the Loan Facility.


    The BVI Companies receive all their revenue in Renminbi, which will have to be translated to
HK dollars for accounting purposes and converted (i) to US dollars to make repayments under the
Loan Facility (although this risk has been hedged through US dollar/Renminbi non-deliverable
swap facilities, see the section headed “Manager’s Discussion and Analysis of Future Operations”
in this Offering Circular) and (ii) to Hong Kong dollars for payment as distributions to Unitholders.
The Government of the PRC introduced a limited floating currency system in July 2005 under
which the Renminbi is pegged against a basket of currencies. The exchange rates between the
Renminbi and each of the other currencies comprised in the basket may fluctuate to a significant
extent and the Renminbi may also be revalued in the future. In addition, if the PRC converts to a
fully floating currency system, the Renminbi may experience wide fluctuations as a result of
market forces. Any decrease in the value of Renminbi may adversely affect accounting profit and
will adversely affect the value of distributions paid in respect of Units in Hong Kong dollars and/or
the ability of GZI REIT to make repayments under the Loan Facility.


Epidemic diseases in Asia and elsewhere may adversely affect GZI REIT’s operations.


     Several countries in Asia, including the PRC, and elsewhere have suffered from outbreaks of
diseases like SARS and avian flu over the past few years. A new and prolonged outbreak of such
diseases may have a material adverse effect on GZI REIT’s business and financial conditions and
results of operations. Although the long term effect of such diseases cannot currently be predicted,
previous occurrences of SARS and avian flu had an adverse effect on the economies of those
countries in which they were most prevalent. The occurrence of SARS in Guangdong province in
2003 was estimated by the Department of Statistics of Guangdong Province to have lowered the
province’s GDP by 1.2%. The outbreak also had an adverse impact on the business in the White
Horse Units.




                                                 59
                                        RISK FACTORS

     An outbreak of a communicable disease like SARS or avian flu in Guangzhou may affect GZI
REIT in a number of ways, including, but not limited to, a decline in demand for consumer goods,
a reduction in the number of visitors to the Properties, a decline in revenue of tenants of the
Properties and increased costs of cleaning and maintaining the public facilities in the Properties.
The impact of these factors on the operations of the Properties could materially and adversely
affect the business and financial conditions and the results of operations of GZI REIT.


     There is currently an outbreak of avian flu in various parts of the PRC and, as at the Latest
Practicable Date, 11 fresh outbreaks of the disease have been reported in six provinces (Hubei,
Xinjiang, Liaoning, Anhui, Hunan and Shanxi) and the Inner Mongolia autonomous region.


An irregular or inadequate supply of electricity may adversely affect GZI REIT’s operations.


     The Properties rely on a regular and adequate supply of electricity for their daily operations.
Although there had been no incidences of inadequate supply of electricity which affected the
operations of the Properties since their acquisition by GZI, there is no assurance that such
situations will not occur in the future at any of the Properties or that the generators in White Horse
Building will be able to supplement any future shortfall in electricity supply, either of which could
materially and adversely affect the business and financial conditions and the results of operations
of GZI REIT.


Interpretation of PRC laws and regulations involves uncertainty.


     As the Properties are all located in the PRC, their operations are governed principally by laws
and regulations in the PRC. The PRC legal system is based on written statutes and prior court
decisions may only be cited as reference. Since 1979, the PRC Government has promulgated laws
and regulations in relation to economic matters such as foreign investment, corporate organisation
and governance, commerce, taxation and trade, with a view to developing a comprehensive
system of commercial law. However, as these laws and regulations are continually evolving in
response to changing economic and other conditions, and because of the limited volume of
published cases and their non-binding nature, any particular interpretation of PRC laws and
regulations may not be definitive.


    The land and real estate laws of the PRC, including laws relating to land title and building
ownership regulations and laws applicable to landlords and tenants, are still under development
and reform. In recent years, the Chinese People’s Congress, the State Council, the Ministry of
Land and Resources and the Ministry of Construction have promulgated a number of laws and
regulations and departmental rules relating to legal problems in respect of land and real estate. In
addition, the local people’s congresses and local governmental authorities in many provinces and
cities also promulgated various local regulations or local rules. There may be uncertainties in the
interpretation and application of these laws, administrative regulations, departmental rules, local
regulations and local rules.




                                                 60
                                        RISK FACTORS

Risks Relating to an Investment in the Units

The Units have never been publicly traded and the Global Offering may not result in an
active or liquid market for the Units. In addition, the real estate investment trust market in
Hong Kong is relatively new.

      Prior to the Global Offering, there has been no public market for the Units and an active public
market for the Units may not develop or be sustained after the Global Offering. Although the Units
will be listed on the Hong Kong Stock Exchange following completion of the Global Offering, this
does not guarantee that a trading market for the Units will develop or, if a market does develop,
the liquidity of that market.

      As real estate investment trusts are a relatively new investment product in Hong Kong, there
is presently no official or directly comparable benchmark against which GZI REIT’s performance
can be measured. It is also unknown whether an active market for real estate investment trusts
which invest in the PRC will develop in Hong Kong.

Unitholders have no right to require the redemption of their Units.

      Unitholders have no right to request the Manager to redeem their Units. Therefore, there can
be no assurance that a Unitholder will be able to dispose of its Units at the Offer Price or any price,
or at all. Accordingly, Unitholders may only be able to liquidate or dispose of their Units through
a sale of such Units to third parties on the secondary market.

The price of the Units may decline after the Global Offering.

      The Offer Price of the Units will be determined by agreement among GZI, the Manager and
the Joint Global Coordinators (on behalf of the Underwriters) and may not be indicative of the
market price for the Units after the completion of the Global Offering. The Units may trade at prices
significantly below the Offer Price or the future NTA per Unit. The price of the Units will depend on
many factors, including:

     •    the perceived prospects of GZI REIT’s business and investments and the Guangzhou
          real estate market;

     •    differences between GZI REIT’s actual financial and operating results and those
          expected by investors and analysts;

     •    changes in GZI REIT’s revenues or earnings estimates or analysts’ recommendations or
          projections;

     •    changes in general        economic     or    market   conditions   both   domestically   and
          internationally;

     •    the market value of GZI REIT’s assets;



                                                  61
                                        RISK FACTORS

     •    changes in interest rates and the consequential impact on investments with interest rate
          sensitive returns;

     •    the perceived attractiveness of the Units against those of other equity securities,
          including those not relating to the real estate sector;

     •    the balance of buyers and sellers of the Units;

     •    the future size and liquidity of the Hong Kong real estate investment trust market;

     •    any future changes to the regulatory system, including the tax system, both generally
          and specifically in relation to Hong Kong real estate investment trusts;

     •    the ability on GZI REIT’s part to implement successfully its investment and growth
          strategies and to retain its key personnel;

     •    foreign exchange rates; and

     •    broad market fluctuations, including weakness of the equity market and increases in
          interest rates.

      For these reasons, among others, Units may trade at prices that are higher or lower than the
attributable NTA per Unit. To the extent that GZI REIT retains operating cash flow for investment
purposes (subject to complying with requirements in the REIT Code and the Trust Deed relating
to required levels of distribution by GZI REIT), working capital reserves or other purposes, these
retained funds, while increasing the value of its underlying assets, may not correspondingly
increase the market price of the Units. Any failure on GZI REIT’s part to meet market expectations
with regard to future earnings and cash distributions may adversely affect the market price for the
Units.

     In addition, the Units are not capital-safe products and there is no guarantee that Unitholders
can regain the amount invested. If GZI REIT is terminated or liquidated, it is possible that investors
may lose all or a part of their investment in the Units.

The forward looking information in this Offering Circular may prove inaccurate.

     This Offering Circular contains forward looking statements regarding, among other things,
forecast distribution levels for the Forecast Period 2005 and the Forecast Year 2006. These
forward looking statements are based on a number of assumptions which are subject to significant
uncertainties and contingencies, many of which are outside of GZI REIT’s control (see the section
headed “Profit Forecast — Bases and Assumptions” in this Offering Circular).

     Moreover, GZI REIT’s revenue is dependent on a number of factors, including the receipt of
dividends and distributions, directly or indirectly, from Holdco and the BVI Companies as well as
rent from the Properties. Such rent, dividends and distributions may decrease for a number of



                                                 62
                                        RISK FACTORS

reasons, including the lowering of occupancy and rental rates, insolvency or delay or failure in rent
payment by tenants, which may adversely affect GZI REIT’s ability to achieve the forecast
distributions as some or all events and circumstances assumed may not occur as expected, or
events and circumstances may arise which are not currently anticipated.

     Actual results may be materially different from the forecast. There can be no assurance that
the assumptions will be realised and the actual distributions will be as forecast.

Decreases in property values as a result of the annual revaluation of the Properties could
result in decreases in the annual consolidated net profit of GZI REIT for that year and may
also trigger certain adverse consequences under the Facility Agreement.

       The Properties are subject to an annual revaluation. Under GZI REIT’s accounting policy, any
decrease in the valuation of its investment properties could result in non-cash charges to the
income statement, and may give rise to a substantial decline in annual consolidated net profit for
the year. Such a decline could result in lower levels of Total Distributable Income and may
significantly affect distributions to Unitholders. A 5.0% decrease in the fair value of the Properties
may reduce the Total Distributable Income to nil (see the section headed “Profit Forecast —
Sensitivity Analysis” in this Offering Circular). Under the Trust Deed, Total Distributable Income for
a Financial Year is the consolidated audited profit after tax of GZI REIT and entities controlled by
it for that Financial Year, adjusted to eliminate the effects of certain Adjustments (as defined in the
section headed “Distribution Policy” in this Offering Circular) which have been recorded in the
income statement for the relevant Financial Year. Unrealised property valuation losses are not an
Adjustment for the purpose of calculating Total Distributable Income. While the Manager may (but
is not obliged to) include in its annual distribution such amounts equivalent to any unrealised
property revaluation losses and fair value losses on financial instruments, the Manager’s ability to
do so is subject to, and may be constrained by, compliance with the gearing level prescribed by
the REIT Code, which limits GZI REIT’s borrowings to no more than 45.0% of GZI REIT’s total
gross asset value.

      If, as a result of a property revaluation, GZI REIT’s total gross asset value falls such that GZI
REIT’s borrowings are above 45.0% of its gross asset value, the Manager would be required to
retain funds that would otherwise be distributable to Unitholders so as to increase GZI REIT’s total
gross asset value.

      Under the Facility Agreement, Holdco must maintain a security margin (being the ratio of the
aggregate principal amount of all borrowings under the Facility Agreement to the aggregate value
of the Properties as shown in the then latest annual valuation reports plus the aggregate amount
of all cash in bank accounts held by the BVI Companies and Holdco) of no more than 50.0%. A
decrease in the values of the Properties could cause the security margin to exceed 50.0%. Such
an event will constitute an event of default under the Facility Agreement. In such an event, the
Lending Banks may, among other things, enforce their mortgages over the Properties.

Property yield on real estate to be held by GZI REIT is not equivalent to yield on the Units.             App B
                                                                                                          B19 (b)

     Generally speaking, property yield depends on the amount of net property income and is
calculated as the amount of revenue generated by the properties concerned, less the expenses



                                                  63
                                         RISK FACTORS

incurred in maintaining, operating, managing and leasing the properties compared against the
current value of the properties. Yield on the Units, however, depends on the distributions payable
on the Units as compared with the purchase price of the Units. While there may be some
correlation between these two yields, they are not the same and will vary accordingly for investors
who purchase Units in the secondary market at a market price that differs from the Offer Price.


The NAV of the Units will be diluted if further issues are priced below the NAV.


     The Trust Deed contemplates that new issues of Units may occur, the Issue Price for which
may be above, at or below the then current NAV of GZI REIT. Where new Units are issued at less
than NAV, the NAV of existing Units will be diluted.


There may be risks associated with the future sales of Units.


      No prediction can be made as to the effect, if any, that future sales of Units, or the availability
of Units for future sale, will have on the market price of the Units. Upon completion of the Global
Offering, it is expected that GZI (through Dragon Yield, its wholly owned subsidiary) and Yue Xiu
(assuming that it elects to retain the Units it is entitled to receive under the Special Dividend) will
respectively own approximately 31.3% and 0.8% of the then outstanding Units (assuming the
Over-allocation Option is exercised in full). Although the Underwriting Agreements and the
Reorganisation Deed contain restrictions on the disposal of Units held by GZI, and Yue Xiu has
agreed to a similar lock-up in respect of any Units it elects to receive under the Special Dividend,
there can be no assurance that sales of substantial amounts of Units by other parties will not occur
or that GZI and Yue Xiu will not dispose of their Units upon the lapse or waiver of the relevant
restrictions.


The Hong Kong Code on Takeovers and Mergers does not apply to Unit acquisitions and
there may be limited information in relation to the interests held by significant holders and
other connected persons of GZI REIT.


     Unitholders’ rights differ from, and may be less protective in certain respects than, those
granted to shareholders of public companies in Hong Kong. The Hong Kong Code on Takeovers
and Mergers does not apply to acquisitions of units in real estate investment trusts, which means
(among other things) that a person may acquire any number of Units without being required to
make a general offer to acquire the Units held by other Unitholders. Accordingly, Unitholders may
not benefit from a possible premium price and may not receive equal prices for Units sold.


      In accordance with the REIT Code, interests in the Units held by connected persons of GZI
REIT are required to be disclosed in the annual report of GZI REIT. Part XV of the SFO does not
directly apply to the Units. Although the Trust Deed deems some of the provisions on disclosure
of interests set out in Part XV of the SFO to apply to the Units, and contains provisions requiring
Unitholders (among other persons) to disclose their interests in GZI REIT, the Manager may not
be able to enforce these provisions at all times. Accordingly, the amount of publicly available
information concerning holders of significant numbers of Units and connected persons of GZI REIT
may be limited, and complete disclosure of the interests of such persons cannot be assured.



                                                   64
                                         RISK FACTORS

The sale or possible sale of a substantial number of Units by GZI or Yue Xiu in the public
market could adversely affect the price of the Units.

       On the Listing Date, assuming that the Over-allocation Option is fully exercised, GZI REIT will
have 1,000,000,000 Units outstanding, of which approximately 679,376,416 Units (67.9%) will be
held by the public (through the Global Offering, the Offer for Sale and/or the Special Dividend),
312,550,000 Units (31.3%) will be held by Dragon Yield (a wholly owned subsidiary of GZI) and
8,073,584 Units (0.8%) will be held by Yue Xiu (assuming that Yue Xiu elects to retain the Units
it is entitled to receive under the Special Dividend). If either of these entities sells or is perceived
as intending to sell a substantial number of Units (following the lapse of any lock-up arrangement
or pursuant to applicable waivers (see the section headed “Underwriting — Lock up Agreements”
in this Offering Circular)), the market price for the Units could be adversely affected.

Certain rights in relation to Units in which a person has an interest or is deemed to have an
interest may be suspended under the provisions of the Trust Deed.

      The Trust Deed contains provisions that require relevant persons to disclose to the Trustee
and the Manager information in relation to the acquisition or disposal of interests in the Units. If
the Trustee or the Manager believes a person has not complied with such disclosure of interest
provisions in the Trust Deed, irrespective of whether such person is a holder of Units, the Trustee
or the Manager (as the case may be) may, in its absolute discretion, take certain actions in respect
of all or a part of the Units in which such person holds or is deemed to hold an interest. Such
actions may include suspending the voting rights of such Units, suspending the payment of
distributions on such Units, suspending the transfer and registration of such Units and imposing
a daily administrative fee payable in relation to each such Unit.

Accounting standards in the PRC and Hong Kong are subject to change.

      Accounting standards in the PRC and Hong Kong are subject to change. As a result, the
financial statements of GZI REIT, Holdco, the BVI Companies as well as any other entities which
are controlled by GZI REIT and are subject to such accounting standards may be affected by the
introduction of any such revised accounting standards.

      The extent and timing of these changes in accounting standards are currently unknown and
subject to confirmation by the relevant authorities. The Manager has not quantified the effects of
these proposed changes and there can be no assurance that these changes will not have a
significant impact on the presentation of GZI REIT’s financial statements or on its results of
operations. In addition, such changes may adversely affect the ability of GZI REIT to make
distributions to Unitholders.

The Units may be delisted from the Hong Kong Stock Exchange.

     The Hong Kong Stock Exchange imposes certain requirements for the continued listing of
securities, including the Units, on the Hong Kong Stock Exchange. There can be no assurance that
GZI REIT will continue to meet the requirements necessary to maintain the listing of Units on the
Hong Kong Stock Exchange or that the Hong Kong Stock Exchange will not change the listing
requirements.



                                                  65
                                              USE OF PROCEEDS

    The Manager estimates that the total proceeds to GZI REIT from the Global Offering will be                                App B
                                                                                                                              B2 (b)
approximately HK$1,661.6 million based on the Minimum Offer Price and HK$1,792.7 million
based on the Maximum Offer Price.

     The net proceeds from the Units issued under the Global Offering (which, for the avoidance
of doubt, excludes the proceeds from the Over-allocation Option and the Offer for Sale), together
with the funds drawn down from the Loan Facility, will be used to make partial payment on the
Promissory Note (see the section headed “Material Agreements and Other Documents Relating to
GZI REIT — Reorganisation Deed” in this Offering Circular).

    The following table sets out the sources of GZI REIT’s funds following completion of the
Global Offering and the intended application of those funds.

                                                                                      Based on the        Based on the
                                                                                        Maximum             Minimum
                                                                                      Offer Price of      Offer Price of
                                                                                        HK$3.075            HK$2.850
                                                                                       (HK$ million)      (HK$ million)

Sources
583,000,000 Units issued under the Global Offering                                       1,792.7             1,661.6

Loan Proceeds                                                                            1,287.0             1,287.0

Total                                                                                    3,079.7             2,948.6

Use of Funds
Payment on the Promissory Note (1)                                                       2,952.1             2,824.3

Retention of funds due to GZI under the Promissory Note for proposed
  renovation works at the White Horse Units                                                  26.7               26.7

Retention of funds due to GZI under the Promissory Note for payment
  of costs and expenses of the Global Offering and debt related costs (2)                    98.8               95.5

Retention of funds in relation to Rental Income attributable to Partat in
  respect of the period from the Listing Date to 31 December 2005
  (both dates inclusive) (3)                                                                  2.1                 2.1

Total                                                                                    3,079.7             2,948.6




Notes:

(1)     Taking into account the initial adjustment to the Initial Consideration in accordance with the Reorganisation Deed
        (see the section headed “Material Agreements and Other Documents Relating to GZI REIT — Reorganisation Deed”
        in this Offering Circular).

(2)     The portion of the expenses of the Global Offering that will be charged against the Unitholders’ equity of GZI REIT
        will be netted off from the proceeds of the Global Offering and thereby deducted from the final consideration to be
        paid to GZI under the Reorganisation Deed. All remaining expenses of the Global Offering will be borne by GZI.

(3)     Under the current leases for the White Horse Units, rent and property management fees are paid in an undivided
        amount by the tenants in the White Horse Units to White Horse Property Management Company. The majority of
        these leases will expire on 31 December 2005. The funds retained represent the Rental Income from the current
        leases in the White Horse Units for the period from the Listing Date to 31 December 2005, which amounts are due
        to Partat.




                                                            66
                                         OWNERSHIP OF UNITS

Significant Unitholders and Other Unitholders                                                                                App B
                                                                                                                             B5


Assuming No Exercise of the Over-allocation Option

      Immediately following the completion of the Global Offering (assuming that the Over-
allocation Option is not exercised and that Yue Xiu elects to retain the Units it is entitled to receive
under the Special Dividend), so far as the Directors are aware, the only persons directly or
indirectly interested in 10.0% or more of the Units in issue will be:

     Name                                                      Units                    Percentage of issued Units

                                                 Direct interest Deemed interest Direct interest Deemed interest



     Dragon Yield                                 400,000,000                   —         40.0%                   —
     GZI (1)                                                 —      400,000,000                —             40.0%
     Yue Xiu (2)                                    8,073,584       400,000,000             0.8%             40.0%
     Public                                       591,926,416                   —         59.2%                   —


     Notes:

     (1)    Such Units represent the deemed interest of GZI under the Trust Deed in the Units held by Dragon Yield by
            virtue of GZI’s direct interest in the entire issued share capital of Dragon Yield.

     (2)    Such Units represent the Units which Yue Xiu is entitled to receive under the Special Dividend and the deemed
            interest of Yue Xiu in the Units held by Dragon Yield under the Trust Deed by virtue of its deemed interest in
            the entire issued share capital of Dragon Yield.


Assuming Full Exercise of the Over-allocation Option

     Immediately following the completion of the Global Offering (assuming that the Over-
allocation Option is exercised in full and that Yue Xiu elects to retain the Units it is entitled to
receive under the Special Dividend), so far as the Directors are aware, the only persons directly
or indirectly interested in 10.0% or more of the Units in issue will be:

     Name                                                      Units                    Percentage of issued Units

                                                 Direct interest Deemed interest Direct interest Deemed interest



     Dragon Yield                                 312,550,000                   —         31.3%                   —
     GZI (1)                                                 —      312,550,000                —             31.3%
     Yue Xiu (2)                                    8,073,584       312,550,000             0.8%             31.3%
     Public                                       679,376,416                   —         67.9%                   —


     Notes:

     (1)    Such Units represent the deemed interest of GZI under the Trust Deed in the Units held by Dragon Yield by
            virtue of GZI’s direct interest in the entire issued share capital of Dragon Yield.

     (2)    Such Units represent the Units which Yue Xiu is entitled to receive under the Special Dividend and the deemed
            interest of Yue Xiu in the Units held by Dragon Yield under the Trust Deed by virtue of its deemed interest in
            the entire issued share capital of Dragon Yield.




                                                          67
                                   OWNERSHIP OF UNITS

Subscription by the Directors


      The Directors and their associates do not intend to apply for Units under the Global Offering.
However, certain of the Directors and/or their associates are GZI Qualifying Shareholders and will
be entitled to receive Units under the Special Dividend. Any Units which these Directors and/or
their associates elect to retain will be announced upon completion of the allotment of Units under
the Global Offering. Save as described in the section headed “Corporate Governance — Interests
of, and Dealings in Units by, the Manager as well as the Directors and Senior Management of the
Manager” in this Offering Circular, there is no restriction on the Directors disposing or transferring
all or any part of their unitholdings.




                                                 68
                                   DISTRIBUTION POLICY

Distribution Policy


     The Manager’s policy is to distribute to Unitholders 100.0% of GZI REIT’s Total Distributable        App B
                                                                                                          B2 (l)
Income for each of FY2006 to FY2008 and thereafter at least 90.0% of Total Distributable Income           RC 7.12

in each Financial Year.


      For these purposes, and under the terms of the Trust Deed, “Total Distributable Income” for
a Financial Year means the amount calculated by the Manager as representing the consolidated
audited profit after tax of GZI REIT and entities controlled by it for that Financial Year, as adjusted
for accounting purposes to eliminate the effects of accounting adjustments which are charged or
credited to the income statement for the relevant Financial Year (“Adjustments”), including: (i) the
effects of unrealised property valuation gains, including reversals of impairment provisions; (ii)
realised gains on the disposal of properties; (iii) fair value gains on financial instruments; (iv)
deferred tax charges/credits in respect of property valuation movements; (v) other material
non-cash gains; (vi) expenses paid out of the Deposited Property in connection with the issue of
new Units; and (vii) any adjustments in accordance with HKFRS which increase those recorded
under generally accepted accounting principles in the PRC on which the accounts of cash
available for distribution is based (including reversal of depreciation charge on investment
properties).


      For the avoidance of doubt, non-cash losses such as property revaluation losses are not
reversed from the income statement of GZI REIT and will therefore directly impact Total
Distributable Income. The Manager may (but is not obliged to) distribute any cash freed up by
non-cash losses (in which case, for FY2006 to FY2008, more than 100.0% of GZI REIT’s Total
Distributable Income could be distributed) or utilise such cash to replenish GZI REIT’s asset base.
In addition, GZI REIT does not have to distribute non-cash gains.


      For a period determined by the Manager from time to time to be the period in respect of which
distributions are to be made (“Distribution Period”) that is not a Financial Year, “Total Distributable
Income” means the amount determined by the Manager in its discretion.


     For any Distribution Period, the Manager may, in its absolute discretion, distribute to
Unitholders more than the percentage of the Total Distributable Income required by the REIT Code
(currently 90.0%) if the Manager considers that GZI REIT has funds surplus to its business
requirements.


      Under the Trust Deed, the Manager must, subject to applicable law, ensure that at least one
distribution shall be made in respect of each Financial Year and paid no later than the date which
is five calendar months following the end of the relevant Financial Year. However, GZI REIT’s
distribution for the period from the Listing Date to 31 December 2005 will be paid together with the
distribution for the period from 1 January 2006 to 30 June 2006 and is intended to be paid on or
before 30 November 2006. The Manager’s initial distribution policy is that two distributions will be
made in respect of each year, being distributions with respect to the six-month periods ending 30         App B
                                                                                                          B13
June and 31 December. The Directors anticipate that the interim and final distributions will be paid
in November and May in each year, respectively.



                                                  69
                                  DISTRIBUTION POLICY

      Distributions to Unitholders will be declared and paid in Hong Kong dollars. The Manager
may also adopt such rules as it considers appropriate for the reinvestment by Unitholders of any
distributions to be made by GZI REIT in return for new Units but no Unitholder shall be obliged to
receive Units in lieu of a cash distribution. Under current Hong Kong tax law, distributions may be
made free of withholdings or deductions on account of Hong Kong tax. It is understood that, under
the Inland Revenue Department’s current practice, no tax should be payable in Hong Kong in
respect of distributions made by GZI REIT. Unitholders should take advice from their own
professional advisers as to their particular tax position.


     GZI REIT’s ability to make distributions is dependent on (among other things) GZI REIT
having available sufficient cash to make the payments required (see the risk factor headed
“Distributions to Unitholders will be subject to cash flow” in this Offering Circular). The REIT Code
requires that each company used to hold real estate and other assets for GZI REIT for the time
being shall distribute to GZI REIT all of such company’s income for each Financial Year insofar as
permitted by the laws and regulations of its relevant jurisdiction of incorporation.


     In respect of distributions to be made for the Forecast Year 2006, see the section headed
“Statement of Distributions” in this Offering Circular.




                                                 70
                                           STRATEGY

Investment Objective and Policy                                                                            App B
                                                                                                           B2 (a), B2 (b) & B2
                                                                                                           (o)

      The Manager’s investment objective for GZI REIT is to invest in properties in Guangdong
province in the PRC. In pursuing its investment objective, the Manager will adhere to the following
policies:

     •    unless Unitholders approve otherwise by Special Resolution at a meeting convened by
          the Manager, investments will initially be in real estate in Guangdong province;

     •    investments will be in properties for the long term; and

     •    investments will be in a diverse portfolio of sustainable income producing properties
          which are used primarily for office, retail and other commercial purposes.

Business Strategies

     In pursuing its objectives, the Manager will follow a set of key business strategies, including:

     1.   Pro-active portfolio growth initially in Guangdong province                                      App B
                                                                                                           B2 (c)


          The Manager will focus on investing in properties, initially in Guangdong province, which
          are primarily used for office, retail and other commercial purposes. It will seek to acquire
          properties that will provide attractive cash flows and yields together with opportunities
          for further revenue growth through operational optimisation. Portfolio growth
          opportunities for GZI REIT are underpinned by:

          •    the right of first refusal granted by GZI to GZI REIT, conditional on listing of the
               Units on the Hong Kong Stock Exchange, to acquire any completed Grade A office
               or commercial buildings in Guangzhou that (i) fulfils (or would reasonably regarded
               as fulfilling) the investment criteria and property characteristics and is consistent
               (or would reasonably be regarded as being consistent) with the investment
               strategy of the Manager for property investments by GZI REIT (as stated in this
               Offering Circular); (ii) is owned or developed by the GZI Group and in which the
               GZI Group has an ownership interest of 95.0% or more (and, in circumstances in
               which GZI is able to negotiate and agree terms with the relevant joint venture party
               so as to extend the coverage of the right of first refusal granted by GZI to include
               the relevant property that is the subject of that joint venture, that relevant property);
               (iii) has a value of US$20.0 million or more (as determined by an independent
               property valuer); and (iv) GZI proposes to dispose of to a third party or parties. This
               right of first refusal will commence on the Listing Date and continue until the
               earliest of the following occurring: (a) the expiry of five years after Listing Date; (b)
               the Units ceasing to be listed on the Hong Kong Stock Exchange; or (c) the entity
               which is the asset manager of GZI REIT ceasing for whatever reason to be a
               subsidiary of any member of the GZI Group or the Yue Xiu Group (see the section
               headed “Material Agreements and Other Documents Relating to GZI REIT — Deed
               of Right of First Refusal” in this Offering Circular);



                                                 71
                                    STRATEGY

     •   the flexibility of GZI REIT to seek investment opportunities from other property
         developers or vendors other than GZI; and

     •   the scale of the Manager’s existing network of relationships in Guangdong
         Province, which helps it identify and source acquisition targets.

2.   Operational enhancements

     2.1 Pro-actively managing and leasing properties

         The Manager believes that there is considerable scope for improvement in the
         operational efficiency of GZI REIT to drive growth in net rental income and
         profitability over time. Such measures include:

         •    disciplined and efficient asset management and cost control;

         •    pro-active retail and commercial leasing;

         •    continual review and improvement in tenant mix and facility layout;

         •    delivery of high quality services to tenants and customers;

         •    active marketing and promotions; and

         •    pursuit of additional revenue opportunities.

     2.2 Property and asset management expertise

         The Manager seeks to ensure that high quality services are provided to the tenants
         and customers of the properties of GZI REIT. To this end, it will:

         •    provide continuous and appropriate professional training to its staff to build
              and sustain a high quality service culture with the necessary professionalism
              and personal competence;

         •    employ external consultants, advisers and service providers as and when it
              considers it appropriate and in the interests of Unitholders. In this regard, the
              Manager has appointed the Property Adviser at its own cost to provide advice
              and personnel support in relation to, among other things, identifying and
              evaluating, and assisting in the execution of, acquisitions and disposals
              properties (see the section headed “Material Agreements and Other
              Documents Relating to GZI REIT — Property Consultancy Agreement” in this
              Offering Circular);

         •    closely monitor and benchmark staff performance against international
              standards;



                                          72
                                      STRATEGY

          •     create a feedback mechanism for all staff; and

          •     educate staff on how their performance would affect the performance of GZI
                REIT.

3.   Strategic initiatives

     3.1 Expanding the portfolio of GZI REIT through selective acquisitions                       App B
                                                                                                  B2 (c)

          The Manager intends to explore actively acquisition opportunities that would add
          value to GZI REIT’s portfolio and improve returns to Unitholders. Key criteria that
          the Manager will consider when evaluating acquisition opportunities include:

          •     consistency with the Manager’s investment strategy;

          •     accretion to distributions per Unit;

          •                                                            `
                attractiveness of the property’s acquisition price vis-a-vis its cash flows,
                current performance and sustainable future potential;

          •     economic conditions and the market outlook;

          •     diversification or expansion of GZI REIT’s property portfolio enabling GZI
                REIT to access tenant and customer demand in new trade areas;

          •     ability of the property to complement the existing portfolio and strengthen GZI
                                            `
                REIT’s market share vis-a-vis competition in a trade area;

          •     opportunities to enhance the property to increase investment returns and
                create value;

          •     healthy occupancy rate and established tenants of good credit standing to
                minimise rental delinquency and turnover;

          •     potential to add value to GZI REIT’s portfolio through selective renovations or
                other enhancements;

          •     good quality specifications which are in compliance with legal and zoning
                regulations; and

          •     availability of appropriate and convenient access to necessary transportation
                amenities.

     3.2 Increasing returns through asset enhancement

          The Manager believes that there is usually scope for improvements that will create
          additional value for the properties of GZI REIT. The Manager will also seek advice



                                            73
                               STRATEGY

    from external consultants and advisers (including the Property Adviser) as and
    when it considers it appropriate and in the interests of Unitholders on any possible
    asset enhancement plan. Possible enhancement measures include:

    •    for retail properties, looking into centre positioning, marketing, trade mix and
         tenancy profile;

    •    subject to obtaining the relevant regulatory approvals and, if necessary, the
         approval of the other owners of the property in question, creating more
         lettable space, change or addition of use and increasing the connectivity and
         accessibility of the properties;

    •    reviewing the role and issues surrounding property management, in
         particular, the management of the common areas and how this can affect
         tenants and property yields. Attention will be given to the procedures,
         processes and systems currently undertaken and these will be compared with
         international standards;

    •    acquisition and/or control of loading/unloading areas and car parking spaces
         within the buildings; and

    •    reviewing and designing measures to manage risks arising from business
         operations.

    GZI REIT’s ability to carry out asset enhancements at Fortune Plaza, City
    Development Plaza and Victory Plaza may be constrained in certain circumstances
    (see the risk factors headed “GZI REIT may not be able to pass certain critical
    decisions in the owners’ committees of Fortune Plaza and City Development
    Plaza” and “GZI REIT will be unable to carry any decisions in the owners’
    committee of Victory Plaza” in this Offering Circular).

3.3 Optimising GZI REIT’s capital structure                                                 App B
                                                                                            B2 (j)


    The Manager will focus on optimising the capital structure of GZI REIT within the
    requirements of the REIT Code with the aim of maximising the returns from the
    portfolio and distributions to Unitholders, while adhering to appropriate levels of
    financial prudence. The ratio of total borrowings of GZI REIT against its total gross
    asset value will generally be maintained at between 30.0% and 40.0% in order to
    create a buffer for future capital expenditure, working capital needs and any
    adverse movements in market conditions. The Manager intends to use a
    combination of debt and equity financing to fund future acquisitions and asset
    enhancements and will implement a prudent financial and capital management
    policy. The Manager will, from time to time, review and optimise the fixed
    rate/floating rate profile of GZI REIT’s borrowings and evaluate refinancing options
    which may include long term bank borrowings, bonds, commercial mortgage
    backed securities and medium term notes.



                                     74
                               STRATEGY

3.4 Prudent risk management


    The Manager will aim to minimise the risks and exposures relating to interest rates
    and foreign exchange rates through the use of appropriate financial instruments.


3.5 International corporate governance standards


    The Manager seeks to incorporate corporate governance best practices into its
    management and organisational structure. Detailed corporate governance policies
    and procedures have been established to promote the operation of GZI REIT in a
    transparent manner and with built in checks and balances.


3.6 Exit strategy                                                                            App B
                                                                                             B2 (n)


    The Manager intends that properties acquired by GZI REIT shall be held on a long
    term basis. However, if the Manager considers that any property has reached a
    stage such that it offers only limited scope for growth, the Manager may consider
    selling the property (either in whole or in part) through either the disposal of GZI
    REIT’s interest in the property directly or the disposal of GZI REIT’s interest in the
    relevant special purpose vehicle, and using the proceeds for alternative
    investments in a property or properties which meet its investment criteria.




                                     75
THE PROPERTIES AND THE REORGANISATION




                 76
                               THE PROPERTIES AND BUSINESS

The Properties

   As at the date of this Offering Circular, GZI REIT’s property portfolio consists of the following                   App B
                                                                                                                       B2 (i)
commercial properties located in Guangzhou:

      •     White Horse Units — The White Horse Units consist of nine strata units in part of the
            lower ground level as well as the 2nd to 9th storeys of a multi-storey commercial
            building with eight levels above ground, a lower ground level and a basement
            comprising a car park. The White Horse Units account for 81.4% of the total Gross Floor
            Area of White Horse Building. Of the remaining Gross Floor Area, 9.2% (comprising the
            car park) is owned by White Horse JV (a subsidiary of GZI, and therefore a connected
            person of GZI REIT) and 9.4% is owned by an unrelated third party.

      •     Fortune Plaza Units — The Fortune Plaza Units comprise 35 strata units in the West
            tower, 43 strata units in the East tower and five strata units in the six-storey podium
            located in a mixed use Grade A commercial building consisting of a podium with two
            tower blocks and two levels of underground car parks. The Fortune Plaza Units account
            for 50.2% of the total Gross Floor Area of Fortune Plaza. Of the remaining Gross Floor
            Area, 15.5% (comprising certain units in the podium(1) and the West tower, a clubhouse
            and the car park) is owned by GCCD (a subsidiary of GZI, and therefore a connected
            person of GZI REIT) and the remaining 34.3% is owned by unrelated third parties.

      •     City Development Plaza Units — The City Development Plaza Units comprise six strata
            units in the first three storeys of a five-storey podium as well as 159 strata units in the
            single tower block of a 28-storey Grade A commercial building comprising the podium,
            the tower block and two levels of underground car parks. The City Development Plaza
            Units account for 57.3% of the total Gross Floor Area of City Development Plaza. Of the
            remaining Gross Floor Area, 36.8% (comprising space used for GCCD’s offices as well
            as a clubhouse, a restaurant and the car park) is owned by GCCD (a subsidiary of GZI,
            and therefore a connected person of GZI REIT) and the remaining 5.9% is owned by
            unrelated third parties.

      •     Victory Plaza Units — The Victory Plaza Units consist of nine strata units comprising the
            six levels above ground in the podium and the retail space in basement 1 in the first
            phase of an integrated office and retail complex with four levels of underground car
            parks. Two tower blocks above the podium are currently under construction and are
            expected to be completed in 2007. Basement 1 of the building comprises partly car park
            space and partly retail space. The tower blocks and car park are not part of the Victory
            Plaza Units. The Victory Plaza Units account for 52.7% of the combined Gross Floor
            Area of the podium and the four levels of underground car parks, and will account for
            approximately 19.5% of the total Gross Floor Area of the entire development when the
            two tower blocks are completed. The car park in Victory Plaza is owned by GCCD, a
            subsidiary of GZI and therefore a connected person of GZI REIT.

     The portions in each Property which continue to be held by GZI (through either White Horse
JV or GCCD) have not been injected into GZI REIT as they do not generate significant levels of
rental or other income or are used for GZI’s own purposes.


(1)   GCCD has signed a memorandum of understanding with a third party to sell these podium units (which account for
      0.6% of the total Gross Floor Area of Fortune Plaza).



                                                        77
                           THE PROPERTIES AND BUSINESS

       The Manager believes that the Properties benefit from their prime locations in their respective
trade areas and their high levels of connectivity with public transportation that generate visitor
traffic.


      As at 30 September 2005, the Properties comprised 89,588.1 sq.m. of Gross Floor Area used
for wholesale or retail activities and 71,062.9 sq.m. of Gross Floor Area used as office or
warehouse space. The Manager proposes to renovate the 8th and 9th storeys of the White Horse
Units for wholesale/retail use. Towards this end, the Manager has stopped renewing existing
leases and signing new leases for these two floors. It expects GZI REIT to have vacant possession
of these two floors by 1 January 2006. The proposed renovation is expected to cost HK$5.8 million
(which will be funded from an aggregate amount of HK$26.7 million retained from the proceeds of
the Global Offering, see the section headed “Material Agreements and Other Documents Relating
to GZI REIT — The Reorganisation Deed” in this Offering Circular) and to be completed before
May 2006. After the renovation, the Properties will have 93,508.1 sq.m. of Gross Floor Area used
for wholesale or retail activities (i.e. an increase of 4.4%) as well as 67,142.9 sq.m. of Gross Floor
Area used as office or warehouse space (i.e. a decrease of 5.5%).

    For the nine months ended 30 September 2005, the wholesale/retail component of the
Properties had an average occupancy rate of 93.1% while the office/warehouse component of the
Properties had an average occupancy rate of 77.5%.

      The Properties are held by Partat, Moon King, Full Estates and Keen Ocean under Building
Ownership Certificates granted by the Guangzhou Land Bureau. Holdco acquired the Properties
on 7 December 2005 via an acquisition of the BVI Company Shares. The aggregate Appraised
Value of the Properties, as determined by the Independent Property Valuer, was HK$4,005.0
million as at 30 September 2005 (see the sub-section headed “Valuation” below).


Competitive Strengths

     The Manager believes that the Properties enjoy the following competitive strengths:                 App B
                                                                                                         B2 (d)


     •    Quality properties in prime locations — The White Horse Building is one of
          the top 10 centres of the garment wholesale and retail trades in the PRC (having
          been awarded the “10 Largest Garment Wholesale Market Award” in 2005 by the
                                      (Economic Daily News Group — Fashion Times),
                              (China Centre for Commercial Information) and
                     (the Professional Market Committee of the China Commerce Association))
          and attracts tenants and visitors not just from Guangdong province but also from the
          rest of the PRC. A key success factor for wholesale markets is being located near
          superior transport systems. White Horse Building is situated in the Liu Hua commercial
          zone, next to the exhibition hall for the Guangzhou Trade Fair, and is in Guangzhou’s
          main garment wholesale district. It is a short walk from Guangzhou Huo Che Zhan
          underground metro station (                    ) on the No. 2 metro line. White Horse
          Building is also located directly across from a bus station which operates both local and
          inter-provincial services. The Property is also in close proximity to the Guangzhou
          railway station, which facilitates long distance transportation of the large quantities of
          clothing purchased by traders from other parts of the PRC who visit White Horse
          Building.



                                                 78
                           THE PROPERTIES AND BUSINESS

           The Guangzhou Municipal People’s Government decided in the 1990’s to develop the
           Tian He area into Guangzhou’s CBD. Since then, many high quality commercial
           buildings (including Fortune Plaza, City Development Plaza and Victory Plaza) have
           been built in the Tian He area. Fortune Plaza and City Development Plaza are Grade A
           office buildings and the Victory Plaza podium is a new shopping centre.

           The new underground metro system in Guangzhou has transformed the Tian He CBD
           into a central hub and an important interconnection point for the entire city. The Ti Yu
           Zhong Xin underground metro station (                    ) on the No. 1 metro line exits
           directly to Fortune Plaza, while City Development Plaza and Victory Plaza are both
           within short walking distance of the Ti Yu Xi Road station (               ). When the No.
           3 metro line is completed and commences operations (its first section is estimated to
           open by the end of 2005), shoppers travelling to the Tian He CBD on the No. 1 and No.
           3 metro lines will enjoy direct underground access to basement 1 of Victory Plaza from
           the metro station and the Manager anticipates that human traffic through Victory Plaza
           will increase significantly as a result. These three Properties are also in close proximity
           to the East Station of Guangzhou Railway Station (which serves the railway line
           between Guangzhou and Hong Kong) and the future airport express line.

           Over the years, White Horse Building and City Development Plaza have received
           numerous awards in recognition of their excellence of construction and management.

       •   High occupancy — Both White Horse Building and City Development Plaza are
           well-established commercial properties. For the nine months ended 30 September
           2005, the White Horse Units enjoyed full occupancy. As at 30 September 2005, 1,246
           (95.3%) of the 1,307 leases (signed with 966 tenants) which are due to expire on 31
           December 2005 have been renewed for four or five years until 31 December 2009 or 31
           December 2010, as the case may be. In the same period, the City Development Plaza
           Units enjoyed an average occupancy rate of 89.9% and experienced a renewal rate (in
           terms of the total Gross Rentable Area covered by the expired leases) of 55.5%. The
           Manager believes that these two Properties will continue to enjoy high, consistent and
           stable occupancy rates.

           Although Fortune Plaza is a relatively new property (having been opened in the second
           half of 2003), the Fortune Plaza Units have nevertheless achieved an average
           occupancy rate of 65.9% for the nine months ended 30 September 2005. Similarly, the
           Victory Plaza podium opened only in the second half of 2003 but the Victory Plaza Units
           achieved an average occupancy rate of approximately 85.2% for the nine months ended
           30 September 2005.

           Although both buildings opened at approximately the same time, the Fortune Plaza
           Units had a relatively lower occupancy rate as compared to the Victory Plaza Units
           because some of the Fortune Plaza Units were at that time earmarked for sale rather
           than lease, and were only later redesignated as units to be retained and leased out.

Size

     The aggregate Gross Floor Area of a Property refers to the sum of the areas specified in the
Building Ownership Certificates for the Property. The Gross Rentable Area of each unit in a
Property refers to the area set out in the tenancy agreement for that unit, which includes a
proportionate share of the common area in the Property allocated to that unit.



                                                 79
                                 THE PROPERTIES AND BUSINESS

     The occupancy rates of the Properties disclosed in this Offering Circular have been
calculated by the Manager using the Gross Rentable Areas of the Properties.

The Portfolio

    The following table sets out certain information with respect to each of the Properties as at
30 September 2005:

                                   Year of                                      Building         Gross         Percentage of
                               Completion of        Gross           Internal    Efficiency     Rentable         Total Gross
                                                                                         (1)
Property                        Construction      Floor Area       Floor Area    Ratio           Area          Rentable Area
                                                    (sq.m.)         (sq.m.)        (%)          (sq.m.)             (%)

White Horse Units                   1990
- Wholesale/retail (2)(3)                          46,279.3         44,322.4      95.8          45,157.6 (4)       92.1
- Office/warehouse (2)                              3,920.0          3,778.2      96.4           3,849.6 (5)        7.9
                                                   50,199.3         48,100.6      95.8          49,007.2          100.0
Fortune Plaza Units                 2003
- Retail (6)                                        3,853.1          3,244.7      84.2           3,853.1            9.5
- Office (6)                                       36,503.1         27,507.6      75.4          36,503.1           90.5
                                                   40,356.2         30,752.3      76.2          40,356.2          100.0
City Development Plaza              1997
   Units
- Retail                                           11,757.6         10,468.4      89.0          11,757.6 (7)       27.7
- Office                                           30,639.8         22,186.5      72.4          30,639.8           72.3
                                                   42,397.4         32,654.9      77.0          42,397.4          100.0
Victory Plaza Units                 2003
- Retail                                           27,698.1         22,847.9      82.5          27,262.3 (8)      100.0

Total
- Wholesale/retail                                 89,588.1         80,883.4      90.3          88,030.6           55.4
- Office/warehouse (2)                             71,062.9         53,472.3      75.2          70,992.5           44.6
                                                  160,651.0        134,355.7      83.6         159,023.1          100.0




Notes:

(1)   Refers to the ratio of Internal Floor Area to Gross Floor Area, both as stated in the relevant Building Ownership
      Certificates.

(2)   The 8th and 9th storeys are currently leased for office/warehouse use. The Manager proposes to renovate these
      areas for wholesale/retail use. Such renovations will not change the Gross Floor Area or the Internal Floor Area of
      the White Horse Units as the renovation works do not involve addition or reduction of floor space.

(3)   Currently, the 5th and 6th storeys and part of the 4th storey have been leased for wholesale use. These areas have
      been assumed to be wholesale space for the purposes of this Offering Circular. The relevant Building Ownership
      Certificates for these portions of the White Horse Units state that the space is designated for office use. The Manager
      has been advised by its PRC legal adviser that the use of these portions of the White Horse Units for wholesale use
      does not contravene the Building Ownership Certificates.

(4)   Owing to the current design of the building, there is currently a total area of 1,121.7 sq.m. which cannot be rented
      out as it represents a stairway/corridor area and a storage area for equipment.




                                                              80
                                   THE PROPERTIES AND BUSINESS

(5)     In accordance with PRC regulations, White Horse Property Management Company (as property manager of White
        Horse Building) has on-site premises of 70.4 sq.m. for its use free of rent (see the section headed “The Leasing
        Agents — Property Management Offices” of this Offering Circular). This area has not been included in calculating
        the Gross Rentable Area.

(6)     Currently, the 3rd to 5th storeys of the podium have been rented out for use as offices. These areas, amounting to
        12,825.3 sq.m., have been assumed to be office space for the purposes of this Offering Circular. The relevant
        Building Ownership Certificates for these portions of the Fortune Plaza Units state that the space is designated for
        commercial use. The Manager has been advised by its PRC legal adviser that the use of these portions of the
        Fortune Plaza Units as offices does not contravene the Building Ownership Certificates.

(7)     The Gross Rentable Area includes the area of 97.0 sq.m. leased to Yicheng for its use as a property management
        office for City Development Plaza at a nominal monthly rent of HK$5 per sq.m. (see the section headed “The Leasing
        Agents — Property Management Offices” of, and Appendix X to, this Offering Circular).

(8)     Victory Plaza was rented out based on the preliminary Government approval granted based on the total Gross Floor
        Area as calculated by the then owner. The common area of the Victory Plaza Units was allocated to each of the
        tenancy agreements for the Victory Plaza Units based on such calculations. Upon receipt of the Building Ownership
        Certificates for the Property, it was discovered that the total Gross Floor Area was larger than the figure calculated
        by 435.8 sq.m. This additional area had not previously been allocated to the tenants. The Manager will allocate such
        common area to future leases by adopting the Gross Rentable Area as recorded in the relevant Building Ownership
        Certificates. Such common area does not currently form part of the Gross Rentable Area of the Victory Plaza Units
        but will do so once allocated.


Gross Turnover

     The Gross Turnover generated by each of the Properties for each of FY2003, FY2004 and the
six months ended 30 June 2005 are set out in the following table:

                                                                                                         Six months ended
Property                                                        FY2003                 FY2004              30 June 2005

                                                         (HK$’000)      (%)     (HK$’000)      (%)     (HK$’000)         (%)


White Horse Units                                          89,754       69.4     104,737       60.9       65,916         60.1
Fortune Plaza Units                                           150        0.1       9,042        5.2       13,334         12.2
City Development Plaza Units                               31,911       24.7      33,904       19.7       17,499         16.0
Victory Plaza Units                                         7,580        5.8      24,397       14.2       12,846         11.7
Total                                                     129,395      100.0     172,080      100.0      109,595     100.0


Valuation

     The Appraised Value of each of the Properties as at 30 September 2005, as determined by
the Independent Property Valuer, is set out in the following table:

Property                                                                                         Appraised Value

                                                                                         (HK$ million)             (%)


White Horse Units                                                                           2,541.5                63.5
Fortune Plaza Units                                                                           545.0                13.6
City Development Plaza Units                                                                  385.5                 9.6
Victory Plaza Units                                                                           533.0                13.3
Total                                                                                       4,005.0             100.0




                                                              81
                               THE PROPERTIES AND BUSINESS

Occupancy Trends


     The following table sets out information on the average occupancy rates of the Properties for
FY2003, FY2004, the nine months ended 30 September 2005 and each of the six months ended
30 June 2004 and 30 June 2005, as well as the occupancy rates as at 30 September 2005:

                                                     Six                      Six        Nine
                                                   months                    months    months
                                                   ended                     ended      ended            As at
                                                   30 June                 30 June 30 September 30 September
Property                              FY2003        2004        FY2004        2005       2005            2005

                                        (%)          (%)         (%)          (%)         (%)             (%)
White Horse Units
 — Wholesale/retail                    100.0       100.0        100.0        100.0      100.0           100.0
 — Office/warehouse                    100.0       100.0        100.0        100.0      100.0           100.0
Combined                               100.0       100.0        100.0        100.0      100.0           100.0

Fortune Plaza Units
  — Retail                              n.m. (1)      0.0        17.9        100.0        90.5           14.9 (2)
  — Office                              n.m.(1)      10.5        21.3         55.7        63.3           83.5
Combined                                n.m.(1)       9.5        21.0         60.0        65.9           76.9

City Development Plaza Units
  — Retail                              83.6         86.0        85.8         85.5        85.5           85.5
  — Office                              83.6         91.2        90.8         90.6        91.6           93.0
Combined                                83.6         89.8        89.4         89.2        89.9           91.0

Victory Plaza Units
  — Retail                              n.m. (3)     87.1        81.8         77.7        85.2          100.0

Weighted average across
  the Properties (4)
  — Wholesale/retail                    n.m.         89.8        88.9         91.2        93.1           94.3
  — Office/warehouse                    n.m.         50.2        55.6         73.2        77.5           88.5
                                        n.m.         72.1        74.0         83.2        86.1           91.7




Notes:

(1)   The first tenancy in the Fortune Plaza Units only commenced in September 2003.

(2)   The occupancy rate as at 30 September 2005 was lower than the average occupancy rate for the nine months ended
      30 September 2005 due to the early termination of a large lease in September 2005. As at 31 October 2005, the
      occupancy rate was 82.0% due to two new tenants taking up part of the vacated space.

(3)   The first tenancy in the Victory Plaza Units only commenced in August 2003.

(4)   Weighted based as the Gross Rentable Area of each of the Properties.




                                                           82
                                   THE PROPERTIES AND BUSINESS

Tenant Profile


      Given the nature of White Horse Building as a garment wholesale and retail market, the White
Horse Units are mostly leased to tenants in the garment wholesale and retail trades. Major tenants
of the Fortune Plaza Units include                              (HSBC Electronic Data Processing
(Guangdong) Limited),                                   (Jia De Shi (China) Investment Co., Ltd.)
and                              (Alibaba (China) Technology Co., Ltd.). The major tenants in the
City Development Plaza Units include                         (Guangdong Mobile Communications
Co., Ltd.),                            (Yangcheng Sub-branch of Guangzhou branch, Shenzhen
Development Bank),                                    (Taikang Life Insurance Co. Ltd. Guangzhou
Branch) and                          (Cosco Guangzhou International Freight Co. Ltd.). The Victory
Plaza Units are mainly occupied by retail outlets offering brands such as Nike and Morgan, well
                                        ¨
known food outlets such as KFC and Haagen-Dazs as well as a variety of restaurants. The major
tenants in the Victory Plaza Units include                          (Guangzhou GOME Electrical
Appliances Co. Ltd.),         (Chen Huiyi),                       (Yum! Restaurants (Guangdong)
Co., Ltd.) (which operates a KFC outlet) and                       (Guangzhou Lao Xiang Diet Co.
Ltd.).


         The following table sets out information on the 10 largest tenants of the Properties in terms
of the total monthly base rent for 30 September 2005:

                                                                                            Percentage     Percentage
                                                                                 Gross        of total       of total
                                                                                Rentable      Gross         monthly
Tenant                     Business sector     Property           Expiry date    Area(1)   Rentable Area   base rent(1)
                                                                                (sq.m.)         (%)            (%)

                           Department store     Victory           31 Mar 2010   12,484.6        7.9            5.2
(Guangzhou                                    Plaza Units
Xindaxin Co., Ltd.)

                               Banking          Fortune           31 Jan 2008    8,550.2        5.4            3.5
                                              Plaza Units
(HSBC Electronic Data
Processing (Guangdong)
Limited)



                           Communications         City            30 Apr 2008    3,688.7        2.3            2.0
                                              Development
(Guangdong Mobile                              Plaza Units
Communication Co., Ltd.)

                               Finance            City            31 Aug 2006   1,844.3        1.2             0.9
                                              Development             and         and          and             and
(Efund Management Co.                          Plaza Units        16 Oct 2006   1,844.3        1.2             0.9
Ltd.)




                                                             83
                                   THE PROPERTIES AND BUSINESS

                                                                                               Percentage     Percentage
                                                                                   Gross         of total       of total
                                                                                  Rentable       Gross         monthly
Tenant                     Business sector        Property          Expiry date    Area(1)    Rentable Area   base rent(1)
                                                                                   (sq.m.)         (%)            (%)

                              Services        City Development      30 Jun 2010     7,830.0         4.9            1.5
                                                 Plaza Units
(Guangzhou
Wisdom Valley
Development
Company Limited)

                              Electrical           Victory          31 May 2011     1,918.0         1.2            1.5
                             appliances          Plaza Units
(Guangzhou
GOME Electrical
Appliances Co.
Ltd.)


                            Transportation          City            31 Aug 2006     2,997.1         1.9            1.4
                                                Development
(Cosco                                           Plaza Units
Guangzhou
International
Freight Co. Ltd.)

                              Insurance             City            31 Dec 2007     2,431.9         1.5            1.0
                                                Development
(Taikang Life                                    Plaza Units
Insurance Co.
Ltd. Guangzhou
Branch)

                            E-Commerce       Fortune Plaza Units    31 Aug 2007     2,092.4         1.3            0.9
(Alibaba (China)
Technology Co., Ltd.)


                               Banking        City Development      31 Oct 2007      694.2          0.4            0.8
(Yangcheng Sub-branch of                         Plaza Units
Guangzhou branch,
Shenzhen Development
Bank)


10 largest tenants by                                                              46,375.7        29.2           19.6
total monthly base rent

Other tenants                                                                      99,489.8        62.5           80.4


Vacant space                                                                       13,157.6         8.3             —
Total                                                                             159,023.1       100.0          100.0



Note:
(1)      As at 30 September 2005.




                                                               84
                               THE PROPERTIES AND BUSINESS

     Save for HSBC Electronic Data Processing (Guangdong) Limited, an associate of the
Trustee, none of the tenants listed above is a connected person of GZI REIT. (See Appendix X to
this Offering Circular for a full list of tenancies in the Properties with connected persons.)


    The following charts illustrate the percentage contribution of the 10 largest tenants to the
monthly base rent of the Properties for September 2005, and the total Gross Rentable Area of the
Properties as at 30 September 2005 occupied by these tenants:

             Contribution of 10 largest                               Total Gross Rentable Area as
           tenants to monthly base rent                             occupied by the 10 largest tenants
              for September 2005 (1)(2)
                                           10 largest tenants
                                                 19.6%                                            10 largest tenants
                                                                                                        29.2%




                                                                                                        Vacant
                                                                                                         8.3%
  Other tenants                                                 Other tenants
     80.4%                                                         62.5%




Notes:

(1)   Income from the White Horse Units included property management fees.

(2)   Calculated as a percentage of the monthly base rent of the Properties for September 2005.


     These 10 tenants occupy 29.2% of the Gross Rentable Area of the Properties but account for
only 19.6% of the monthly base rent of the Properties for September 2005. This apparent
discrepancy exists because the leases in the White Horse Units command the highest rental rates
among all four Properties and these 10 tenants occupy premises in the other three Properties
where the rental rates are lower.




                                                           85
                                         THE PROPERTIES AND BUSINESS

      The following chart illustrates the percentage of total monthly base rent for September 2005
derived from the wholesale/retail portions of the Properties relative to the office/warehouse
portions of the Properties.
                                               Office/warehouse
                                                     27.7%




                                                                                     Wholesale/retail
                                                                                        72.3%



     The following chart illustrates the percentage of the total Gross Rentable Area of the
wholesale/retail portions of the Properties as at 30 September 2005 (83,046.3 sq.m.) occupied by
tenants in each of the identified business sub-sectors and the percentage contribution of the
tenants in these business sub-sectors to the monthly base rent for September 2005:

Gross Rentable Area occupied by                                         Contribution of each business sub-sector to
   each business sub-sector                                                         monthly base rent(1)


               Individual retail shops   Banking                                          Individual retail shops Banking
                       1.8%                                                                       2.1%
               Electrical appliances      2.2%                                           Electrical appliances     2.8%
                                                                                                                          Food and
                       2.3%                          Food and                                    2.1%                    beverages
            Department store                         Beverages
                                                                                     Department store                       4.9%
                 14.7%                                13.2%                                                                     Services
                                                                          Property agency 7.2%
                                                                               1.0%                                              2.5%
 Property agency
      1.8%
  Property                                                   Services
             (2)
 management                                                   10.0%
                                                                         Beauty services
    0.1%                                                                      0.3%
Beauty services
     0.4%




                                                         Garments                                                                  Garments
                                                          53.5%                                                                     77.1%




Notes:

(1)   Calculated as a percentage of the monthly base rent of the Properties for September 2005.

(2)   Tenants in the property management business sub-sector contributed 0.003% to the monthly base rent for
      September 2005 and have not been included in the chart.




                                                                    86
                                   THE PROPERTIES AND BUSINESS

Expiries


      Depending on factors such as the needs of tenants as well as how established and reputable
a particular property is, the terms of lease agreements for the Properties mostly range from nine
months to four years and typically include a right of first refusal permitting the existing tenant to
renew the tenancy agreement upon the expiry of the original lease term, provided that the tenant
is willing to match to the same terms and conditions (including rental rates) of a proposed lease
with a prospective new tenant (see the sub-section headed “Tenancy Agreements” below). As at
30 September 2005, approximately 39.9% of lease agreements were for terms of at least three
years. Shorter or longer lease terms may be contracted for on a case-by-case basis.


     The table below sets out, for the periods indicated, details of expiries in respect of tenancies
in the Properties as at 30 September 2005 (without taking into account the new leases for the
White Horse Units commencing 1 January 2006):

                                                                                                          Expiring leases/
                                                                                     Gross                 vacant space
                                               Total number                    Rentable Area              as a percentage
                                                    of leases                of leases expiring/           of total Gross
Period                                              expiring                    vacant space               Rentable Area

                                                                 (%)       (sq.m.)            (%)                (%)


1 October 2005 -
  31 December 2005                         1,320 (1)             90.7     52,549.2            36.0               33.0
                                                    (2)
FY2006                                        60                  4.1     17,438.1            12.0               11.0
FY2007                                        45 (2)              3.1     22,675.9            15.5               14.2
FY2008                                        15 (2)              1.0     18,287.8            12.5               11.5
                                                    (2)
FY2009                                          5                 0.3       2,164.4            1.5                1.4
FY2010 and beyond                             11 (2)              0.8     32,750.1            22.5               20.6

Sub-total                                  1,456                100.0    145,865.5           100.0               91.7
Vacant space                                 n.a.                n.a.     13,157.6             n.a.               8.3

Total                                        n.a.                n.a.    159,023.1             n.a.            100.0




Notes:

(1)     This does not take into consideration the new leases for the White Horse Units commencing on 1 January 2006.

(2)     Assuming that the right of first refusal to enter into a further tenancy agreement for leases expiring in the earlier
        period(s) set out in the table is not exercised.




                                                                 87
                            THE PROPERTIES AND BUSINESS

      The table below sets out, for the periods indicated, details of expiries in respect of tenancies
in the Properties as at 30 September 2005 (taking into account the new leases for the White Horse
Units commencing 1 January 2006):

                                                                                          Expiring
                                                                                        leases/vacant
                                                                                         space as a
                                                               Gross Rentable Area      percentage of
                                        Total number of         of leases expiring/      total Gross
Period                                  leases expiring          vacant spacing        Rentable Area(1)

                                                     (%)      (sq.m.)          (%)           (%)


1 October 2005 -
  31 December 2005                      74            5.1      8,059.1          5.5           5.1
FY2006                                  60            4.1     17,438.1         12.0          11.0
FY2007                                  45            3.1     22,675.9         15.6          14.2
FY2008                                  15            1.0     18,287.8         12.5          11.5
FY2009                              592              40.7     15,056.6         10.3           9.5
FY2010 and beyond                   670              46.0     64,348.0         44.1          40.4

Sub-total                         1,456             100.0    145,865.5        100.0          91.7
Vacant space                        n.a.              n.a.    13,157.6          n.a.          8.3

Total                               n.a.              n.a.   159,023.1          n.a.        100.0



Information Regarding the Title of the Properties


     Each of the Properties is held under title documents in the form of Building Ownership
Certificates issued by the Guangzhou Land Bureau. Each title document contains information in
respect of, among other things, the following:


        •   the name of the title holder;


        •   location of the property;


        •   nature of the land use rights;


        •   Gross Floor Area; and


        •   the rights of other parties, for example, a mortgagee.


     The holder of a title document is entitled to deal freely with the property by, for example,
transferring or granting leases in respect of the property or part thereof, and charging or
mortgaging the land use rights in the property as security for any borrowings.



                                                      88
                           THE PROPERTIES AND BUSINESS

  White Horse Units


     The White Horse Units are held by Partat under Building Ownership Certificates issued by the
Guangzhou Land Bureau to Partat. The Building Ownership Certificates were issued on a per floor
basis in respect of the White Horse Units.


  Fortune Plaza Units


     The Fortune Plaza Units are held by Moon King under Building Ownership Certificates issued
by the Guangzhou Land Bureau to Moon King. The Building Ownership Certificates were issued
on a per unit basis in respect of some of the Fortune Plaza Units and on a per floor basis in respect
of the other units.


  City Development Plaza Units


     The City Development Plaza Units are held by Full Estates under Building Ownership
Certificates issued by the Guangzhou Land Bureau to Full Estates. The Building Ownership
Certificates were issued on a per unit basis in respect of some of the City Development Plaza Units
and on a per floor basis in respect of the other units.


  Victory Plaza Units


     The Victory Plaza Units are held by Keen Ocean under Building Ownership Certificates
issued by the Guangzhou Land Bureau to Keen Ocean. The Building Ownership Certificates were
issued on a per floor basis in respect of the podium (excluding the 1st storey) and the retail space
in basement 1 of Victory Plaza, and on a per unit basis in respect of the 1st storey of Victory Plaza.


     Generally, Building Ownership Certificates were obtained on a per unit basis for properties
intended for sale and on a per floor basis for properties intended to be held as investments.


Terms of Land Use Rights


      There are two types of title registrations in the PRC, namely land registration and building
registration. Land registration is effected by the issue of land use right certificate by the relevant
authority to the land owner evidencing that the land owner has obtained land use rights which can
be assigned, mortgaged or leased. The building registration is the issue of a building ownership
certificate (           ) to the building owner evidencing that the building owner has obtained
building ownership rights in respect of the building. According to the Land Registration Regulations
(               ) promulgated by the State Land Administration Bureau on 18 November 1989 and
amended on 18 December 1995 (the amendment became effective on 1 February 1996), and the
Administration Rules on Regulations of Urban Real Estate Property (                                  )
promulgated by the Ministry of Construction on 27 October 1997, implemented on 1 January 1998
and revised subsequently on 15 August 2001, all land use rights and building ownership rights
which are duly registered are protected by law.



                                                 89
                          THE PROPERTIES AND BUSINESS

     The two different systems are commonly maintained separately in many cities in the PRC.
However, in Shenzhen, Guangzhou, Shanghai and some other major cities, the two systems have
been consolidated and a single composite real estate and land use right certificate (        ) will
be issued to evidence the ownership of both land use rights and the buildings erected thereon.
Such single composite real estate and land use right certificate is in compliance with the Law of
the Administration of Urban Real Estate of the PRC (                                    ) and the
Administration Rules on Regulations of Urban Real Estate Property (                            ).


      Under the Provisional Regulations of the PRC concerning the Grant and Assignment
of the Right to Use State-Owned Land Use Rights in Urban Areas (
                            ) promulgated by the State Council of the PRC on 19 May 1990, the use
of state land is dependent on the grant of a land use right by the PRC Government to a land user
for a definite period subject to the payment of a land premium by the land user. The maximum term
of such grants depends on the use of the land, as follows:


     •    up to 70 years for residential use;


     •    up to 50 years for industrial use or for public (e.g. educational, technology, cultural
          hygiene or sports) use;


     •    up to 40 years for commercial (which includes wholesale and retail), tourism and
          entertainment uses; and


     •    up to 50 years for all other uses (which include office and warehouse).


     (See Appendix IX to this Offering Circular for further information.)


  White Horse Units


      The nine Building Ownership Certificates for the White Horse Units which are held in the
name of Partat were issued by the Guangzhou Land Bureau on 19 October 2005 and grant Partat
the right to use the White Horse Units for a period of 50 years commencing 7 June 2005 in respect
of the stairway/corridor and storage area in the lower ground level, a portion of the 5th storey as
well as 6th to 9th storeys, and for a period of 40 years commencing 7 June 2005 in respect of the
2nd to 4th storeys and a portion of the 5th storey.




                                                90
                                THE PROPERTIES AND BUSINESS

   The following table sets out the commencement date and the duration of each Building
Ownership Certificate relating to the White Horse Units:

          Building Ownership
            Certificate No.             Storey(1)                Commencement Date                 Duration (years)

              C3895234             Stairway/corridor                 7 June 2005                           50
                                       area and
                                    storage area in
                                       the lower
                                     ground level
              C3895233                    2nd                        7 June 2005                           40
              C3895232                     3rd                       7 June 2005                           40
              C3895231                     4th                       7 June 2005                           40
              C3895230                     5th                       7 June 2005                40 for 7,164.2 sq.m.
                                                                                                         and
                                                                                               50 for 531.36 sq.m. (2)
              C3895229                     6th                       7 June 2005                           50
              C3895228                     7th                       7 June 2005                           50
              C3895227                     8th                       7 June 2005                           50
              C3895226                     9th                       7 June 2005                           50



    Notes:

    (1)     The 2nd storey of White Horse Building is the first level above ground in the building and is directly accessible
            from the street.

    (2)     Pursuant to the relevant PRC regulations, the maximum term of the grant of land use right is 40 years and 50
            years for commercial and integrated and other uses, respectively. The land use right certificate of the 5th
            storey of White Horse Building divides the relevant area into separate portions for commercial and integrated
            uses.


  Fortune Plaza Units


      The 83 Building Ownership Certificates for the Fortune Plaza Units which are held in the
name of Moon King were issued by the Guangzhou Land Bureau on 10 September 2004 and 8
August 2005 and grant to Moon King the right to use the Fortune Plaza Units for a period of 40
years commencing 26 November 2002 in respect of strata units in the podium of Fortune Plaza,
a period of 40 years commencing 26 November 2002 in respect of strata units in the 27th storey
in the West tower and the 37th storey in the East tower, and 50 years commencing 26 November
2002 in respect of strata units in the two office tower blocks.




                                                            91
                              THE PROPERTIES AND BUSINESS

   The following table sets out the commencement date and the duration of each Building
Ownership Certificate relating to the Fortune Plaza Units:


          Building Ownership                                                       Duration
            Certificate No.                  Storey            Commencement Date   (years)

              C3897235                 Podium, 1st storey      26 November 2002      40
              C3097281                Podium, 2nd storey       26 November 2002      40
              C3097280                 Podium, 3rd storey      26 November 2002      40
              C3097279                 Podium, 4th storey      26 November 2002      40
              C3097278                 Podium, 5th storey      26 November 2002      40
              C3098282               West tower, 8th storey    26 November 2002      50
        C3097272, C3097273,          East tower, 8th storey    26 November 2002      50
        C3097274, C3097275,
         C3097276, C3097277
              C3098281               West tower, 9th storey    26 November 2002      50
        C3097268, C3097269,          East tower, 9th storey    26 November 2002      50
         C3097270, C3097271
              C3098280              West tower, 10th storey    26 November 2002      50
        C3897153, C3897154,         West tower, 11th storey    26 November 2002      50
        C3098277, C3098278,
         C3098279, C3897155
        C3878363, C3878364,          East tower, 11th storey   26 November 2002      50
              C3878365
        C3897152, C3897151,         West tower, 12th storey    26 November 2002      50
        C3897150, C3897149,
         C3897148, C3897147
        C3878362, C3878361,          East tower, 12th storey   26 November 2002      50
        C3878360, C3878359,
         C3878358, C3878357
        C3897146, C3897145,         West tower, 13th storey    26 November 2002      50
        C3897144, C3897156,
         C3897246, C3897245
        C3878356, C3878355,          East tower, 13th storey   26 November 2002      50
        C3878354, C3878353,
         C3878352, C3878351
        C3897244, C3897243,          West tower, 14 storey     26 November 2002      50
              C3897242
        C3878350, C3878349,          East tower, 14th storey   26 November 2002      50
        C3878348, C3878347,
         C3878346, C3878345
              C3098276              West tower, 15th storey    26 November 2002      50
              C3098275              West tower, 16th storey    26 November 2002      50
              C3098274              West tower, 17th storey    26 November 2002      50
              C3098273              West tower, 18th storey    26 November 2002      50




                                               92
                                THE PROPERTIES AND BUSINESS


           Building Ownership                                                            Duration
              Certificate No.                  Storey             Commencement Date       (years)

          C3897241, C3897240,          West tower, 19th storey     26 November 2002         50
          C3897239, C3897238
          C3878344, C3097267,          East tower, 19th storey     26 November 2002         50
          C3097266, C3098286,
          C3098285, C3878343
               C3098272                 West tower, 24th and       26 November 2002         50
                                            25th storeys
               C3098284                 East tower, 25th and       26 November 2002         50
                                            26th storeys
               C3897237                West tower, 26th storey     26 November 2002         50
               C3897236                West tower, 27th storey     26 November 2002         40
               C3878342                East tower, 27th storey     26 November 2002         50
               C3878341                East tower, 28th storey     26 November 2002         50
               C3878340                East tower, 34th storey     26 November 2002         50
               C3098283               East tower, 35th and 36th    26 November 2002         50
                                               storeys
               C3878339                East tower, 37th storey     26 November 2002         40


  City Development Plaza Units


     The 165 Building Ownership Certificates for the City Development Plaza Units which are held
in the name of Full Estates were issued by the Guangzhou Land Bureau on 20, 21, 22 and 26
October 2004 and grant Full Estates the right to use the City Development Plaza Units for a period
of 40 years commencing 27 January 1997 in respect of the 159 strata units in the first three storeys
in the podium of City Development Plaza and for a period of 50 years commencing 27 January
1997 in respect of the six strata units in the 6th to 28th storeys in the tower block of City
Development Plaza.


   The following table sets out the commencement date and the duration of each Building
Ownership Certificate relating to the City Development Plaza Units:


           Building Ownership                                                            Duration
              Certificate No.                  Storey             Commencement Date       (years)

          C3202136, C3202132,                    1st                27 January 1997         40
               C3202131
          C3202158, C3202133                    2nd                 27 January 1997         40
               C3202137                         3rd                 27 January 1997         40
          C3202134, C3209181,                    6th                27 January 1997         50
          C3209182, C3209183,
          C3209184, C3209185,
          C3209186, C3209187




                                                 93
                     THE PROPERTIES AND BUSINESS


 Building Ownership                                             Duration
   Certificate No.              Storey      Commencement Date   (years)

C3209188, C3209189,              7th         27 January 1997      50
C3209190, C3209191
C3209192, C3209193,              8th         27 January 1997      50
C3209194, C3209195,
C3209196, C3209197
C3209198, C3209199,              9th         27 January 1997      50
C3209200, C3209201,
     C3209202
C3200787, C3200788,              10th        27 January 1997      50
C3200789, C3200790,
C3200791, C3200792,
C3200793, C3200794
C3200795, C3200796,              11th        27 January 1997      50
C3200797, C3200798,
C3200799, C3200800,
C3202001, C3202004,
C3202002, C3202003
     C3204076                    16th        27 January 1997      50
C3204075, C3204074,              17th        27 January 1997      50
C3204073, C3204072,
C3204071, C3204070,
C3202135, C3204069,
     C3204068
C3204067, C3204066,              18th        27 January 1997      50
C3204065, C3204064,
C3204063, C3204077,
C3203079, C3203078,
C3203077, C3203076
C3203075, C3203074,              19th        27 January 1997      50
C3203073, C3203072,
C3203071, C3203070,
C3203069, C3203068,
C3203067, C3203066
C3209203, C3123855,              20th        27 January 1997      50
C3123854, C3123853,
C3123852, C3123851,
C3123850, C3123849,
     C3123848
C3123847, C3123846,              21st        27 January 1997      50
C3123845, C3123844,
C3123843, C3123842,
C3123841, C3123840,
     C3123839




                                 94
                               THE PROPERTIES AND BUSINESS


           Building Ownership                                                        Duration
             Certificate No.                Storey             Commencement Date      (years)

         C3123838, C3123837,                 22nd               27 January 1997         50
         C3123836, C3123835,
         C3123834, C3200765,
         C3200766, C3200767,
         C3200768, C3200769
         C3200770, C3200771,                 23rd               27 January 1997         50
         C3200772, C3200773,
         C3200774, C3200776,
         C3200777, C3200778,
         C3200779, C3200780
         C3200781, C3200782,                 24th               27 January 1997         50
         C3200783, C3200784,
         C3200785, C3200786,
         C3202138, C3202139,
         C3202140, C3202141
         C3202142, C3202143,                 25th               27 January 1997         50
         C3202144, C3202145,
         C3202146, C3202147,
         C3202148, C3202149,
         C3202150, C3202151
         C3202152, C3202153,                 26th               27 January 1997         50
         C3202154, C3202155,
         C3202156, C3202157,
         C3209179, C3209178,
         C3209177, C3209180
         C3123833, C3123832,                 27th               27 January 1997         50
         C3123831, C3123830,
         C3123829, C3123828,
         C3123827, C3123826,
         C3123825, C3123824
         C3123823, C3123822,                 28th               27 January 1997         50
         C3123821, C3123820,
         C3123819, C3123818,
         C3123817, C3123816,
         C3123815, C3123814


  Victory Plaza Units


    The nine Building Ownership Certificates for the Victory Plaza Units which are held in the
name of Keen Ocean were issued by the Guangzhou Land Bureau on 6 July 2005 and 15 July
2005, and grant to Keen Ocean the right to use the Victory Plaza Units for a period of 40 years
commencing 8 March 2004.




                                              95
                                THE PROPERTIES AND BUSINESS

   The following table sets out the commencement date and the duration of each Building
Ownership Certificate relating to the Victory Plaza Units:


           Building Ownership                                                            Duration
              Certificate No.                 Storey              Commencement Date      (years)

               C3864888                     Basement                 8 March 2004          40
         C3871824, C3871823,                    1st                  8 March 2004          40
               C3871822
               C3872315                        2nd                   8 March 2004          40
               C3872314                        3rd                   8 March 2004          40
               C3872313                        4th                   8 March 2004          40
               C3872312                        5th                   8 March 2004          40
               C3872311                        6th                   8 March 2004          40


Marketing and Leasing Activities


    The Leasing Agents have marketing teams which identify suitable tenants in desired target
groups for the Properties. The Properties are then marketed actively to such prospective tenants
through advertisements in the print media, television advertisements, direct calls, flyers and
property agents. In addition to advertising through more traditional media, White Horse Building
also has its own website which provides a platform for promoting the property and the business
carried out therein.


      Property agents and prospective tenants are also updated regularly with the list of available
office or retail units for rental. Viewings of the premises are conducted with prospective tenants.
Promotional events are tailored for each of the Properties to raise their market profiles. For
example, product fairs have been held at Victory Plaza while festivals and conferences for
garment wholesalers and their industry associations have been conducted at White Horse
Building.


Tenancy Agreements


     The tenancy agreements entered into for each of the Properties are generally for terms
ranging from nine months to four years, depending on factors such as the needs of tenants as well
as how established and reputable a particular property is.


     In the case of the White Horse Units, the typical tenancy agreements provide for annual rent
revision (subject to negotiation) of up to 5.0% per annum in the second year of the lease term, and
up to 8.0% per annum in the third year of the lease term. For the new leases commencing on 1
January 2006, annual rent revision (subject to negotiation) of between 5.0% and 8.0%
commencing from 1 January 2008 have typically been provided.




                                                96
                           THE PROPERTIES AND BUSINESS

      In the case of the Victory Plaza Units, most tenants enjoyed a rental discount for the first two
years of their leases. Initial discounts of 30.0% were granted when the Victory Plaza Units
commenced operations in the second half of 2003 to induce potential tenants to take up space in
the Property. In the second half of 2004, due to commencement of the construction of the two
office towers above the Victory Plaza podium (which is expected to complete in 2007), most of the
tenants were offered a further discount of 20.0% for the period up to the completion of the
construction. As they were long term tenants in the Victory Plaza Units, three of the tenants were
granted this 20.0% discount for an additional three or four-month period following the completion
of such works. These three tenants accounted for 24.8% of the Rental Income of the Victory Plaza
units in FY 2004.

     Rental rates for the Properties are subject to review and renegotiation on renewal of leases.
At the time of entering into a lease, tenants of the Properties generally pay a security deposit in
cash of an amount equal to two or three months’ rent. Security deposits do not bear interest.
Generally, tenants are required to pay their monthly rent in advance.

      The typical tenancy agreement for the White Horse Units provides that if a tenant wishes to
terminate its lease before the expiry of the lease term, the tenant must submit a written application
to the landlord at least one month prior to the proposed termination date, and obtain the consent
of the landlord for such termination. Such consent had, in the past, been granted on a case by
case basis, particularly if the tenant was able to procure a replacement tenant to enter into a new
lease for the same premises on the same terms and conditions (save that the duration of the new
lease would be for the unexpired term of the original lease). In such cases, the departing tenant
had to pay an administrative fee equivalent to 1.5 month’s rent. If the landlord does not consent
to such early termination, the parties will resolve the issue by discussion. In the event that the
landlord continues to withhold consent after such discussion and the tenant still departs, all or a
portion of its security deposit shall be forfeited without interest in accordance with the terms of the
lease and the landlord retains legal right to require settlement of all unpaid amounts. (See the
section headed “Manager’s Discussion and Analysis of Financial Condition and Results of
Operations — Audited Financial Statements of the Properties — Key Items in the Income
Statements” of this Offering Circular for further information on lease transfers in the White Horse
Units.)

     The typical tenancy agreements for the City Development Plaza Units, the Fortune Plaza
Units and the Victory Plaza Units do not expressly provide for any early termination mechanism
by the tenants. As such, a tenant which unilaterally terminates its lease before expiry of the lease
term will be liable for the contract amounts payable for the remaining term of the lease. For all the
Properties, the landlord has the right to terminate a lease upon the occurrence of certain events,
such as non-payment of rent for at least six months cumulatively or breach of covenants by the
tenants.

      Under the typical tenancy agreement for the Properties, provided that a tenant has not
defaulted under its agreement, the tenant has a right of first refusal to renew the tenancy
agreement upon the expiry of the original lease term if the existing tenant is willing to match the
same lease terms (including rental rates) as a prospective new tenant, subject to the tenant giving
the landlord prior notice to the landlord of its intention to renew.



                                                  97
                              THE PROPERTIES AND BUSINESS

Insurance                                                                                                     App B
                                                                                                              B2 (m)

     GZI REIT has insurance for the Properties that the Manager believes is consistent with
industry practice in Guangzhou. These include comprehensive property insurance (including
insurance against fire and flood) and public liability insurance. No significant or unusual excess or
deductible amounts are required under such policies. There are, however, certain types of risks
that are not covered by such insurance policies, including losses resulting from war, nuclear
contamination, earthquakes, acts of terrorism, epidemics and acts of god.

     The Manager believes that there are no significant differences between the extent of
insurance coverage for the Properties and commercial properties in Hong Kong, and that there are
no significant differences between the claims recovery processes in Guangzhou and Hong Kong.

Litigation

     None of GZI REIT, the Manager, the Leasing Agents, Holdco and the BVI Companies is
currently involved in any material litigation nor, to the best of the Manager’s knowledge, is any
material litigation currently threatened against any of the foregoing.

Rental Growth Prospects

    The Manager has commissioned Cushman & Wakefield (HK) Limited, the Independent
Market Research Consultant, to prepare a report on the Guangzhou commercial property market.
Among other things, the Independent Market Research Consultant analysed the 10-year rental
growth prospects for the Properties and concluded as follows:

     —       The open market rental growth rate of the White Horse Units is expected to largely
             follow the growth pattern of the prime retail market of Guangzhou. However, the recent
             rental increases may limit the ability of GZI REIT to raise rents in the future.

     —       In respect of the Fortune Plaza Units, the open market rental growth rate of the office
             portion is expected to perform better than the overall Guangzhou Grade A office market
             because of its prime location within the Tian He CBD while the open market rental
             growth rate of the retail portion is projected to perform on par with the overall prime retail
             market in Guangzhou.

     —       As for the City Development Plaza Units, the open market rent for the office portion will
             follow the growth pattern in the overall Guangzhou Grade A office market whereas the
             open market rent for the retail portion will experience a slower rate of growth than the
             overall prime market owing to its small size and less eye-catching entrances compared
             with large-scale shopping centres in the vicinity.

     —       Similarly, the open market rent for the Victory Plaza Units are expected to largely follow
             the growth pattern of the overall Guangzhou prime retail market save for the next two
             years, where the construction of the two tower blocks over the podium is expected to
             negatively affect the growth rate.

     The Manager has considered and reviewed such growth forecasts and believe that they are
reasonable.



                                                     98
                           THE PROPERTIES AND BUSINESS

Competition                                                                                             App B
                                                                                                        B2 (d)


    The commercial property sector in Guangzhou is a competitive market. The principal
competitive factors include rental rates, quality and location of properties, supply of comparable
commercial space and the changing needs of commercial space users.


     Fortune Plaza, City Development Plaza and Victory Plaza are all located in the Tian He CBD
and face competition from the other commercial properties in the area as well as from new
properties which are still under development. Other Grade A commercial buildings in the Tian He
CBD which compete with Fortune Plaza and City Development Plaza for office-space users
include CITIC Tower (          ), Guangzhou Metro Plaza (          ) and Xin Chuang Ju Building
(          ). Zhong Cheng Plaza (         ) and Guang Cheng Plaza (         ), which are currently
under construction, will also compete with Fortune Plaza and City Development Plaza for tenants
when completed. Within short walking distance of Victory Plaza is Teem Plaza (           ), one of
the largest shopping malls in Guangzhou, and Grandview Plaza (         ). Further competition will
be posed by the underground shopping arcade to be located in the proposed walkway between
Victory Plaza and the metro station along the No. 3 metro line currently under construction.


     While the other office and/or retail buildings in the Tian He CBD compete with Fortune Plaza,
City Development Plaza and Victory Plaza for tenants and shoppers, their presence also enhances
the district’s status as the prime office and retail location in Guangzhou, which ultimately benefits
GZI REIT’s properties in that location in terms of creating greater overall demand for commercial
space and possibly also increasing the value of the relevant Properties.


     In January 2003, the Municipal Government of Guangzhou announced the Review of
Planning of Pearl River New City, in which Pearl River New City in Tian He District was positioned
as the core area for future development within Guangzhou. The review highlighted a new urban
development scheme for the CBD of Guangzhou, namely Guangzhou Central Business District of
the 21st Century. The main focus of this development scheme will be centered around the core
area of Tian He (ie. Tian He Sports Stadium Area) and Pearl River New City.


     Since 2001, with the improved economic environment in Guangzhou, a significant number of
commercial projects are underway and land transactions are increasing. According to the city’s
urban authority, the current land released in Pearl River New City could potentially provide office
space exceeding 5.0 million sq.m. to be developed in phases spanning up to fifteen years.


     According to the “Independent Market Research Report in Relation to the Guangzhou
Commercial Property Market” in Appendix VIII to this Offering Circular, there is a wave of new
Grade A office development projects in the pipeline, totalling approximately 1.6 million sq.m., to be
released between 2005 and 2009. This compares with a total of only 1.1 million sq.m. of office
space completed in the past decade. Excluded from the figure for development projects in the
pipeline are a few development schemes that are currently on-hold (eg. due to financial




                                                 99
                           THE PROPERTIES AND BUSINESS

difficulties); resurrection of these projects may potentially add another 0.3 million sq.m. to the
pipeline. An estimated 88.0% of the total new supply will be located in the Tian He District.
Although this is a large amount of space to be released onto the district in the next few years,
70.0% of the new space will be in the Pearl River New City area of the Tian He District.

      White Horse Building is located in a district with a concentration of properties which are
positioned as centres for garment wholesale and retail trades, e.g. Sky Horse Garment Market and
Hong Mian Garment Market. However, White Horse Building is able to capitalise on its reputation
as one of the garment wholesale and retail centres in the PRC with a well established and
successful operating history.

Risk of Competition with the GZI Group

     GZI is a connected person of GZI REIT as it is the holding company of the Manager and the
Leasing Agents, and is also expected to be a significant holder immediately after the Listing Date.
GZI is actively engaged in, among other things, the provision of property management, leasing,
marketing and tenancy management services to properties developed by the GZI Group or other
properties in which it has an interest.

      As at 30 September 2005, the GZI Group had approximately 600,000 sq.m. of land bank
available for development in the Tian He CBD in Guangzhou, which has been earmarked for
commercial development. The West tower of Mega-Twin Commercial Tower is currently under
development on part of the land reserve. The commercial portions of the West tower fall with the
parameters of the right of the first refusal granted by GZI (see the section headed “Offering
Circular Summary — Key Investment Highlights” in this Offering Circular). With the transfer of the
Properties to GZI REIT, the GZI Group has no other completed Grade A commercial buildings in
its property portfolio.

     Potential conflicts of interest may therefore arise in relation to leasing and marketing
opportunities. Comprehensive measures have been adopted to address concerns about such
potential conflicts of interest between the GZI Group and GZI REIT (see the section headed “The
Manager — Conflicts of Interest” of this Offering Circular). With such measures in place, the
Manager believes that the Leasing Agents are capable of performing, and shall perform, their
duties to GZI REIT under the Tenancy Services Agreements independently of the GZI Group’s
other leasing and marketing businesses, and in the best interests of GZI REIT and Unitholders.

     While GZI has granted to GZI REIT a right of first refusal, conditional on listing of the Units
on the Hong Kong Stock Exchange and subject to certain other conditions, to acquire certain
properties in Guangzhou (see the section headed “Material Agreements and Other Documents
Relating to GZI REIT — Deed of Right of First Refusal” in this Offering Circular”), the Manager
currently has no plans for GZI REIT to acquire any other properties from the GZI Group. The
Manager will make a public announcement if any such plans arise in the future.

     Any acquisition pursuant to the right of first refusal is subject to the satisfaction of the terms
and conditions thereunder and compliance with applicable requirements of the REIT Code at the
relevant time (including, where relevant, the requirement for Unitholders’ approval).



                                                 100
                          THE PROPERTIES AND BUSINESS

                                     WHITE HORSE UNITS

Description

      The White Horse Units are owned by Partat, a company incorporated on 20 September 2001
in the BVI. Partat is a special purpose vehicle whose sole business activity is the ownership and
operation of the White Horse Units.

    The White Horse Building is a multi storey commercial building with a total of eight levels
above ground, a lower ground level and a basement comprising a car park.

      The White Horse Units consist of part of the lower ground level (comprising a
stairway/corridor area and storage areas for equipment) as well as the 2nd to 9th storeys in White
Horse Building. The building has a total of eight levels above ground, a lower ground level and a
basement comprising a car park. The 1st storey (which is on the lower ground level) is owned and
managed by the Guangzhou Xi Jiao Villagers’ Committee (which is unrelated to GZI) and is
separately operated as the Xi Jiao Market, which similarly deals in fashion apparel. The 2nd to 7th
storeys in the White Horse Building form a marketplace for wholesalers and retailers of fashion
apparel and accessories but also include complementary businesses such as fast food outlets and
a bank. A two-storey hall used to host events such as runway fashion shows is also located on the
2nd storey. The 8th and 9th storeys of White Horse Building are currently used as offices and
warehouse facilities, mainly by the tenants in the 2nd to 7th storeys. The White Horse Units
account for 81.4% of the total Gross Floor Area of White Horse Building. 9.2% of the total Gross
Floor Area (comprising the car park) is owned by White Horse JV (a subsidiary of GZI and
therefore a connected person of GZI) and the remaining 9.4% is owned by the Guangzhou Xi Jiao
Villager’s Committee.

      The Manager proposes to renovate the 8th and 9th storeys of the White Horse Units for
wholesale/retail use. Towards this end, it has stopped renewing existing leases and signing new
leases for these two floors. It expects GZI REIT to have vacant possession of these two floors by
1 January 2006. The estimated cost of such renovation works is approximately HK$5.8 million,
which will be funded from an aggregate amount of HK$26.7 million retained from the proceeds of
the Global Offering (see the section headed “Material Agreements and Other Documents Relating
to GZI REIT — The Reorganisation Deed” in this Offering Circular). The renovation is expected to
be completed before May 2006 and is expected to generate additional Rental Income of HK$2.2
million in FY2006 as compared to the Rental Income which could be achieved based on the
existing usage of the two storeys.

       With over 960 tenants in the garment wholesale and retail trades as at 30 September 2005
and a waiting list of persons seeking to rent space in the building, White Horse Building attracts
a wide range of wholesalers/retailers and customers from both the PRC and overseas (including
Russia and the Middle East), and is one of the centres of the garment wholesale and retail trades
in the PRC. The business of the garment wholesalers and retailers in the building is enhanced by
facilities such as well-positioned escalators which facilitate the flow of human traffic, dedicated
cargo lifts for the transportation of bulky goods and a fire monitoring and security system which
ensures the safety of tenants and shoppers.



                                               101
                          THE PROPERTIES AND BUSINESS

     White Horse Building’s location, which is directly opposite the Guangzhou train station and
long distance bus station, as well as its proximity to the Guangzhou Huo Che Zhan underground
metro station on the No. 2 Metro Line adds to its appeal because of the easy availability of long
distance transportation for the bulk shipment of garments and other goods that customers
purchase at White Horse Building. The new Bai Yun International Airport (                     ) in
Guangzhou, which commenced operations in August 2004, has also boosted Guangzhou’s
accessibility by air and White Horse Building is expected to benefit from an increased number of
customers from afar.


      White Horse Building twice underwent addition and alteration works, once between 1995 and
1997 and again between 1998 and 2000. Between 1995 and 1997, the open courtyard of the
building was converted into an events hall used to accommodate a food court and to stage fashion
events. Between 1998 and 2000, the north and west wings of the building were extended outwards
between the 3rd and 7th storeys, and a further two storeys were added to the building to form the
8th and 9th storeys. The two addition and alteration projects added another 15,250 sq.m. to the
building’s Gross Floor Area.


      White Horse Building has been the recipient of numerous awards almost since it first
commenced operations, including the Municipal Model Market Award (            ) in 1994, the
Province Model Market Award (             ) in 1996, the State Market Award (       ) in 1995
and the 10 Largest Garment Wholesale Market Award in 2005. The building is also IS0 9001
certified for the quality of its management systems.


    For each of FY2002, FY2003 and FY2004 as well as the nine months ended 30 September
2005, the White Horse Units enjoyed full occupancy.


Tenant Profile


     The current leases of the tenants in the White Horse Units are generally for terms of one to     App B
                                                                                                      B2 (i)
three years while the new leases commencing on 1 January 2006 will be for terms of four to five
years. Such leases grant the tenants a right of first refusal to enter into a further tenancy
agreement upon the expiry of their original leases. (See the sub-section headed “Tenancy
Agreements” above for other key terms of the tenancy agreements, including early termination
provisions.)


     In line with the positioning of White Horse Building as a garment wholesale and retail market,
businesses and individuals engaged in the garment wholesale and retail trades were by far the
largest contributors to the monthly base rent for September 2005, accounting for more than 98.7%
of the aggregate monthly base rent for September 2005. The office/warehouse tenants and the
complementary businesses in the building accounted for the remaining 1.3% of the monthly base
rent for September 2005.




                                               102
                                  THE PROPERTIES AND BUSINESS

     The table below sets out information on the 10 largest tenants of the White Horse Units in
terms of total monthly base rent for September 2005:

                                                                                           Percentage        Percentage
                                                                             Gross           of total          of total
                                                                            Rentable         Gross             monthly
Tenant                             Business sector        Expiry date        Area(1)      Rentable Area       base rent
                                                                             (sq.m.)            (%)               (%)

      (Xu Xin)                         Garment           31 Dec 2005(2)         216.4             0.4              0.8
                                    wholesale/retail

         (Chen Shuang Xia)             Garment           31 Dec 2005(2)         334.5             0.7              0.7
                                    wholesale/retail

         (Xie Li Na)                   Garment           31 Dec 2005(2)         495.2             1.0              0.7
                                    wholesale/retail

         (Yao Zhan Hao)                Garment           31 Dec 2005(2)         312.4             0.7              0.6
                                    wholesale/retail

         (Wu Huaying)                  Garment           31 Dec 2005(2)         285.0             0.6              0.6
                                    wholesale/retail

                                        Banking         31 Dec 2005             265.2             0.5              0.6
(Bank of Communications
Guangzhou Branch)

Tenant WH1(3)                          Garment           31 Dec 2005(2)         538.7             1.1              0.6
                                    wholesale/retail

Tenant WH2 (3)                         Garment           31 Dec 2005(2)         192.1             0.4              0.5
                                    wholesale/retail

         (Xie Qiu Sheng)               Garment           31 Dec 2005(2)         210.8             0.4              0.5
                                    wholesale/retail

         (Mou Zhi Yi)                  Garment          31 Dec 2005             472.5             1.0              0.5
                                    wholesale/retail


10 largest tenants                                                            3,322.8             6.8              6.1
by total monthly base rent

Other tenants                                                               45,684.4            93.2              93.9

Vacant space                                                                       —               —                —


Total                                                                       49,007.2           100.0            100.0



Notes:

(1)     As at 30 September 2005.

(2)     Renewed till 31 December 2009 or 31 December 2010.

(3)     These tenants have not been identified as they have not consented to the disclosure of their names in this Offering
        Circular.




                                                           103
                                   THE PROPERTIES AND BUSINESS

        None of these tenants is a connected person of GZI REIT.


Expiries and Renewals


     1,307 of the current leases in the White Horse Units will terminate on 31 December 2005.
1,246, or 95.3%, of these expiring leases have been renewed till 31 December 2009 or 31
December 2010.


      The table below sets out, for the periods indicated, details of expiries in respect of tenancies
in the White Horse Units as at 30 September 2005 (without taking into account the new leases for
the White Horse Units commencing 1 January 2006):

                                                                                                               Expiring
                                                                                                              leases as a
                                                                                        Expiring leases       percentage
                                   Total number                 Gross Rentable          as a percentage         of total
                                     of leases                  Area of leases           of total Gross        monthly
Period                                expiring                      expiring             Rentable Area        base rent(1)

                                                  (%)          (sq.m.)          (%)            (%)                (%)


1 October 2005 -
  31 December 2005               1,307 (2)        99.7       48,573.0           99.1           99.1               99.9
FY2006                                0 (3)        0.0                0          0.0            0.0                0.0
                                          (3)
FY2007                                0            0.0                0          0.0            0.0                0.0
                                          (3)
FY2008                                0            0.0                0          0.0            0.0                0.0
FY2009                                1 (3)        0.1           129.8           0.3            0.3               0.07
FY2010 and beyond                     3 (3)        0.2           304.4           0.6            0.6               0.03

Total                            1,311           100.0       49,007.2          100.0          100.0              100.0




Notes:

(1)     Calculated as a percentage of the total monthly base rent of the White Horse Units for September 2005.

(2)     Of these 1,307 leases, 1,246 (95.3%) have been renewed till 31 December 2009 or 31 December 2010.

(3)     Assuming that the right of first refusal to enter into a further tenancy agreement for leases expiring in the earlier
        periods set out in the table is not exercised.




                                                            104
                                   THE PROPERTIES AND BUSINESS

     The table below sets out, for the periods indicated, details of expiries in respect of tenancies
in the White Horse Units as at 30 September 2005 (taking into account the new leases for the
White Horse Units commencing 1 January 2006):

                                                                   Total number of               Gross Rentable Area
Period                                                             leases expiring                of leases expiring

                                                                                  (%)           (sq.m.)            (%)


1 October 2005 -
  31 December 2005                                                  61             4.7          4,082.9             8.3
                                                                         (1)
FY2006                                                               0             0.0                  0           0.0
                                                                         (1)
FY2007                                                               0             0.0                  0           0.0
FY2008                                                               0 (1)         0.0                  0           0.0
                                                                         (1)
FY2009                                                            588             44.8         13,022.0            26.6
                                                                         (1)
FY2010 and beyond                                                 662             50.5         31,902.3            65.1

Total                                                           1,311            100.0         49,007.2          100.0




Note:

(1)     Assuming that the right of first refusal to enter into a further tenancy agreement for leases expiring in the earlier
        periods set out in the table is not exercised.




                                                            105
                                THE PROPERTIES AND BUSINESS

                                           FORTUNE PLAZA UNITS

Description


    The Fortune Plaza Units are owned by Moon King, a company incorporated on 20 September
2001 in the BVI. Moon King is a special purpose company whose sole business activity is the
ownership and operation of the Fortune Plaza Units.

      Having only been completed in the second half of 2003, Fortune Plaza is one of the newest
Grade A commercial buildings in Guangzhou’s Tian He CBD. The building is located on Ti Yu Dong
Road (           ). It consists of two tower blocks above a 6-storey podium and two levels of
underground car parks. The East tower rises from the 8th to 37th storeys above the podium and
the West tower rises from the 8th to 28th storeys above the podium. As a modern commercial
development, Fortune Plaza is equipped with an automated communication system which brings
fixed line and mobile telecommunications and cable facilities and services to tenants in the
building, an automated office system which combines a property management information system,
a digital bulletin board system and a digital touch-screen search facility, as well as a modern fire
monitoring and security system. The large floor-plate of the podium is suitable for the business
space requirements of banks and other financial institutions. A basement car park serves the
tenants of and visitors to Fortune Plaza.

      Fortune Plaza stands directly above the Ti Yu Zhong Xin underground metro station
(              ), which lies at the intersection of the existing No. 1 metro line and a branch of the
No. 3 metro line that is currently under construction, the first section of which is scheduled to open
by the end of 2005. Fortune Plaza is situated within walking distance of all the other commercial
buildings around the Tian He Stadium.


     The Fortune Plaza Units comprise 35 strata units in the West tower, 43 units in the East tower
and five strata units in the podium of Fortune Plaza. The Fortune Plaza Units account for 50.2%
of the building’s total Gross Floor Area of 80,419.1 sq.m., 15.5% of the total Gross Floor Area
(comprising certain units in the podium(1), certain units in the West tower, a clubhouse and the car
park) is owned by GCCD (a subsidiary of GZI and therefore a connected person of GZI REIT) and
the remaining 34.3% is owned by unrelated third parties.


Tenant Profile


     The 10 largest tenants (in terms of monthly base rent for September 2005) in the Fortune
Plaza Units include                            (HSBC Electronic Data Processing (Guangdong)
Limited),                                (Jia De Shi (China) Investment Co., Ltd.) and
                     (Alibaba (China) Technology Co., Ltd.). A majority of the leases of the Fortune
Plaza Units are for terms of between one and three years (the longest of which is for five years)



(1) GCCD has signed a memorandum of understanding with a third party to sell these podium units (which account for 0.6%
    of the total Gross Floor Area of Fortune Plaza).




                                                         106
                                 THE PROPERTIES AND BUSINESS

and grant the tenants a right of first refusal to renew their leases upon the expiry of their original
leases. The typical lease for the Fortune Plaza Units does not expressly provide for any early
termination mechanism by the tenants. (See the sub-section headed “Tenancy Agreements”
above.)


     Given that Fortune Plaza is primarily an office development, the office tenants in the Fortune
Plaza Units account for 97.3% of the aggregate monthly base rent of the Fortune Plaza Units for
September 2005 and the retail tenants account for 2.7% of the aggregate monthly base rent for
September 2005.


     The table below sets out information on the 10 largest tenants of the Fortune Plaza Units in
terms of total monthly base rent for September 2005:

                                                                              Percentage     Percentage
                                                                   Gross        of total      of total
                                                                  Rentable      Gross         monthly
Tenant                            Business sector   Expiry date    Area(1)   Rentable Area   base rent

                                                                  (sq.m.)         (%)           (%)


                                      Banking       31 Jan 2008   8,550.2        21.2           23.8
(HSBC Electronic Data
Processing (Guangdong)
Limited)

                                    E-commerce      31 Aug 2007   2,092.4          5.1           6.3
(Alibaba (China) Technology
Co., Ltd.)

                                     Services       20 Jul 2007   2,000.0          4.9           5.0
            (Nei Meng Gu Yi
Lin Mu Ye Co., Ltd.)

                                     Petroleum      11 Apr 2007   1,188.4          2.9           4.0


(China National Petroleum
Co., Ltd.)

                                     Petroleum      30 Sep 2008     997.7          2.5           3.9
(Jia De Shi (China) Investment
Co., Ltd.)

                                    Real Estate     7 Sep 2007      999.0          2.5           3.5
(Guangzhou Hai Yi Property
Development Co., Ltd.)

                                  Pharmaceutical    31 Mar 2007     997.7          2.5           3.5
(Astra Zeneca Pharmaceutical
Co., Ltd.)




                                                     107
                               THE PROPERTIES AND BUSINESS

                                                                               Percentage     Percentage
                                                                    Gross        of total      of total
                                                                   Rentable      Gross         monthly
Tenant                             Business sector   Expiry date    Area(1)   Rentable Area   base rent

                                                                   (sq.m.)         (%)           (%)


                                      Logistics      9 Aug 2008       999.0         2.5           3.5
(Guo Lu Yun Tong Hua Nan
Airline Services Co., Ltd.)

                                      Services       9 May 2009       997.6         2.5           3.3
(Glory Business Services
Co., Ltd. Guangzhou Branch)

                                      Logistics      30 Sep 2007      997.7         2.5           3.2
(Kuehne & Nagel Limited,
Guangzhou Representative
Office)


10 largest tenants                                                 19,819.7        49.1          60.0
by total monthly base rent

Other tenants                                                      11,216.9        27.8          40.0

Vacant space                                                        9,319.6        23.1            —


Total                                                              40,356.2       100.0         100.0




Note:

(1)     As at 30 September 2005.


     Save for HSBC Electronic Data Processing (Guangdong) Limited, an associate of the
Trustee, none of these tenants is a connected person of GZI REIT. (See Appendix X to this Offering
Circular for a full list of tenancies in the Properties with connected persons.)




                                                      108
                                   THE PROPERTIES AND BUSINESS

Expiries and Renewals


     The table below sets out, for the periods indicated, details of expiries in respect of tenancies
at the Fortune Plaza Units as at 30 September 2005:

                                                                                            Expiring
                                                                                         leases/vacant         Expiring
                                                                                           space as a        leases as a
                                      Total number                 Gross Rentable         percentage        percentage of
                                          of leases                Area of leases        of total Gross     total monthly
Period                                    expiring            expiring/vacant space      Rentable Area       base rent(1)

                                                      (%)      (sq.m.)         (%)             (%)                (%)



1 October 2005 —
  31 December 2005                    2                3.8         350.2         1.1            0.9                1.3
                                          (2)
FY2006                               16               30.2     3,066.5           9.9            7.6               10.4

FY2007                               26 (2)           49.0   14,034.0          45.2            34.8               46.9

FY2008                                7 (2)           13.2   12,092.3          39.0            30.0               36.5
                                          (2)
FY2009                                2                3.8     1,493.6           4.8            3.7                4.9

FY2010 and beyond                    —                  —             —             —            —                  —

Sub-total                            53           100.0      31,036.6         100.0            77.0             100.0

Vacant space                       n.a.               n.a.     9,319.6          n.a.           23.0               n.a.

Total                              n.a.               n.a.   40,356.2           n.a.         100.0                n.a.




Notes:

(1)     Calculated as a percentage of the total monthly base rent of the Fortune Plaza Units for September 2005.

(2)     Assuming that the right of first refusal to enter into a further tenancy agreement for leases expiring in the earlier
        periods set out in the table is not exercised.




                                                             109
                           THE PROPERTIES AND BUSINESS

                               CITY DEVELOPMENT PLAZA UNITS


Description


      The City Development Plaza Units are owned by Full Estates, a company incorporated on 20
September 2001 in the BVI. Full Estates is a special purpose vehicle whose sole business activity
is the ownership and operation of the City Development Plaza Units.


      City Development Plaza is a Grade A commercial building located in the heart of
                                                                    ¸
Guangzhou’s Tian He CBD. The 28-storey building has a glass facade and comprises a five-storey
retail podium with a single office tower rising 23 storeys over the podium. The retail element in the
podium is primarily positioned to serve the needs of office workers in the building and from other
buildings in the vicinity. Contained within the podium are businesses such as beauty salons and
food and beverage outlets. The building has an underground car park that does not form part of
the City Development Plaza Units. City Development Plaza overlooks the Tian He Stadium
(            ), which is the focal point of the Tian He CBD, and is fronted by a civic plaza which sets
the building back from the road in front of it.


     City Development Plaza is within walking distance of all the other commercial buildings
around the Tian He Stadium as well as the Ti Yu Xi Road underground metro station, which lies
at the intersection of the existing No. 1 metro line and the No. 3 metro line that is currently under
construction, the first section of which is scheduled to open by the end of 2005. The accessibility
of public transportation and the building’s central location within the Tian He CBD makes space in
City Development Plaza attractive to businesses for the commuting convenience it offers to office
workers.


     In 1999, City Development Plaza was awarded the National Lu Ban Prize (               ) for
construction excellence, the highest award granted by the Ministry of Construction (      ) and
the China Construction Industry Association (                 ). In 2000, the building was also
awarded the National Prize for Excellence in Property Management (                          ) by
the Ministry of Construction.


      The City Development Plaza Units comprise 165 strata units in City Development Plaza (six
in the podium and 159 in the tower block), which account for 57.3% of the building’s total Gross
Floor Area of 74,049.2 sq.m. The space occupied by GCCD’s offices as well as a clubhouse, a
restaurant and the car park (together accounting for 36.8% of the building’s total Gross Floor Area)
has been retained by GCCD (a subsidiary of GZI and therefore a connected person of GZI REIT).
The remaining 5.9% of the building’s total Gross Floor Area is owned by unrelated third parties.


    The office element of the City Development Plaza Units accounts for 72.3% of the aggregate
Gross Rentable Area of the City Development Plaza Units. For the nine months ended 30
September 2005, the City Development Plaza Units enjoyed an average occupancy rate of 89.9%.




                                                 110
                                  THE PROPERTIES AND BUSINESS

Tenant Profile


      The 10 largest tenants (in terms of monthly base rent for September 2005) in the City
Development Plaza Units include                         (Guangdong Mobile Communications Co.,
Ltd.),                                    (Taikang Life Insurance Co. Ltd. Guangzhou Branch),
                               (Yangcheng Sub-branch of Guangzhou Branch, Shenzhen
Development Bank) and                             (Cosco Guangzhou International Freight Co. Ltd.).
The leases of these tenants range from terms of one year to nine years, and grant the tenants a
right of first refusal to enter into a further tenancy agreement upon the expiry of their original
leases. The typical lease for the City Development Plaza Units does not expressly provide for any
early termination mechanism by the tenants. (See the sub-section headed “Tenancy Agreements”
above.)


      Reflecting City Development Plaza’s configuration as an office building with a supporting
retail element, the office tenants were the most significant contributors to the monthly base rent
of the City Development Plaza Units for September 2005, accounting for 81.1% of the aggregate
monthly base rent for the Property, while the retail tenants accounted for the balance of 18.9%.


     The table below sets out information on the 10 largest tenants of the City Development Plaza
Units in terms of total monthly base rent for September 2005:

                                                                               Percentage     Percentage
                                                                    Gross        of total       of total
                                                                   Rentable      Gross         monthly
Tenant                             Business sector   Expiry date    Area(1)   Rentable Area   base rent
                                                                   (sq.m.)         (%)           (%)

                                   Communications    30 Apr 2008   3,688.7         8.7           12.3
(Guangdong Mobile
Communications Co., Ltd.)

                                       Finance       31 Aug 2006   1,844.3        4.4            5.9
(Efund Management Co. Ltd.)                              and         and          and            and
                                                     16 Oct 2006   1,844.3        4.4            5.8

                                      Services       30 Jun 2010   7,830.0        18.5           9.5
(Guangzhou Wisdom Valley
Development Company
Limited)

                                    Transportation   31 Aug 2006   2,997.1         7.1           8.8
(Cosco Guangzhou
International Freight Co. Ltd.)

                                      Insurance      31 Dec 2007   2,431.9         5.7           6.1
(Taikang Life Insurance
Co. Ltd. Guangzhou Branch)




                                                      111
                               THE PROPERTIES AND BUSINESS

                                                                               Percentage     Percentage
                                                                    Gross        of total      of total
                                                                   Rentable      Gross         monthly
Tenant                             Business sector   Expiry date    Area(1)   Rentable Area   base rent
                                                                   (sq.m.)         (%)           (%)

                                       Banking       31 Oct 2007      694.2         1.6           5.2
(Yangcheng Sub-branch of
Guangzhou Branch, Shenzhen
Development Bank)

                                       Finance       19 Nov 2006    1,844.3         4.3           4.7
(Axa-Minmetals Assurance
Co. Ltd. Guangzhou Branch)

                                   Property agency   31 Dec 2005    1,528.8         3.6           4.6
(Guangzhou City Construction
& Development Xingye
Property Agent Ltd.)

                                       Media         31 Dec 2006      334.6         0.8           0.9
(Guangzhou Ying Hai Wen Hua                              and            and         and           and
Broadcasting Co., Ltd.)                              30 Sep 2007      818.1         1.9           2.2

                                       Finance       31 Dec 2007    1,060.5         2.5           2.9
(Guangzhou Investment
Company Limited)


10 largest tenants                                                 26,916.8        63.5          68.9
by total monthly base rent

Other tenants                                                      11,642.6        27.5          31.1

Vacant space                                                        3,838.0         9.0            —


Total                                                              42,397.4       100.0         100.0




Note:

(1)     As at 30 September 2005.


        Guangzhou City Construction & Development Xingye Property Agent Ltd. and Yue Xiu
Investment Co., Ltd. are both connected persons of GZI REIT. (See Appendix X to this Offering
Circular for a full list of tenancies in the Properties with connected persons.)




                                                      112
                                   THE PROPERTIES AND BUSINESS

Expiries and Renewals

     The following table sets out information on leases at the City Development Plaza Units that
have expired and those that have been renewed by the existing tenants during the periods
indicated:

                                                               Gross                            Total
                                                              Rentable        Number          renewed      Renewal rate
                                          Number of           Area of        of expired        Gross        by number Renewal rate
                                              leases          expired         leases          Rentable       of leases       by expired
                                              expired          leases        renewed            Area            expired     leased area

                                                               (sq.m.)                         (sq.m.)             (%)           (%)


FY2003                                           38           10,773.7          11             4,229.2           29.0           39.3
FY2004                                           37           10,864.3          18             6,410.5           48.6           59.0
Nine months ended
  30 September 2005                              32           10,850.2          13             6,016.5           40.6           55.5
Total/Average                                  107            32,488.2          42            16,656.2           39.3           51.3



     The following table sets out, for the periods indicated, details of expiries in respect of
tenancies at the City Development Plaza Units as at 30 September 2005:

                                                                                                        Expiring
                                                                                                   leases/vacant            Expiring
                                             Total                                                  space as a             leases as a
                                         number                          Gross Rentable           percentage of           percentage of
                                         of leases                       Area of leases             total Gross           total monthly
Period                                   expiring                  expiring/vacant space          Rentable Area            base rent(1)

                                                      (%)          (sq.m.)             (%)                (%)                  (%)


1 October 2005 to
  31 December 2005                  11                16.2         3,626.0              9.4                8.6                 10.3
FY2006                              36 (2)            52.9        13,594.9             35.3               32.1                 38.4
FY2007                              17 (2)            25.0         8,458.9             21.9               19.9                 25.9
FY2008                               3 (2)             4.4         5,049.6             13.1               11.9                 15.9
FY2009                               0 (2)             0.0             0.0              0.0                0.0                  0.0
FY2010 and beyond                    1 (2)             1.5         7,830.0             20.3               18.5                  9.5
Sub-total                          68                100.0        38,559.4           100.0                91.0               100.0
Vacant space                      n.a.                n.a.         3,838.0            n.a.                 9.0                n.a.
Total                             n.a.                 n.a.       42,397.4             n.a.              100.0                 n.a.




Notes:

(1)     Calculate as a percentage of total monthly base rent of the City Development Plaza Units for September 2005.

(2)     Assuming the right of first refusal to enter into a further tenancy agreement for leases expiring in earlier periods set
        out in the table is not exercised.




                                                                   113
                           THE PROPERTIES AND BUSINESS

                                      VICTORY PLAZA UNITS


Description


      The Victory Plaza Units are owned by Keen Ocean, a company incorporated on 20
September 2001 in the BVI. Keen Ocean is a special purpose vehicle whose sole business activity
is the ownership and operation of the Victory Plaza Units.


    Victory Plaza is designed to be an integrated retail and office complex in the heart of
Guangzhou’s Tian He CBD. A six-storey podium was completed in 2003 together with four
underground levels which accommodate an electronic appliance chain store (occupying part of
basement 1) and a car park occupying basements 1 to 4. The Victory Plaza Units consist of the
entire six-storey podium as well as that part of basement 1 which houses the electronic appliance
chain store. The podium is occupied by retail outlets, fast food outlets and restaurants as well as
leisure facilities. Work commenced on two tower blocks over the podium in September 2004. The
two tower blocks do not form part of the Victory Plaza Units. They are expected to be completed
by 2007 and will be for office use.


      Victory Plaza features a six-storey glass atrium over its entrance and a paved pedestrian mall
in front of the building. Victory Plaza is situated at the junction of Tian He Road (       ) and Ti Yu
Xi Road (            ), two busy thoroughfares within the Tian He CBD. Located next to the
Guangzhou Book Centre (                  ) and within close proximity of Teem Plaza (one of the largest
shopping malls in Guangzhou) and Grandview Plaza, Victory Plaza is positioned to take
advantage of the crowds attracted by these other retail centres.


     Situated among the numerous office buildings in the Tian He CBD, Victory Plaza has a
natural and growing market consisting primarily of white-collar workers in the Tian He CBD. When
the two tower blocks at the property are completed, the retail outlets, fast food outlets and
restaurants as well as leisure facilities in Victory Plaza will also cater to office workers there.
Additionally, Victory Plaza is within a short walk of the Ti Yu Xi Road underground metro station
on the No. 1 metro line. When the No. 3 metro line that is currently under construction commences
operations (the first section is scheduled to open by the end of 2005), shoppers travelling to the
Tian He CBD on the No. 1 and No. 3 metro lines will enjoy direct underground access to basement
1 of Victory Plaza from the station. The Manager understands that this proposed walkway between
the metro station and Victory Plaza will house an underground shopping arcade, and anticipates
that shopper traffic through Victory Plaza will increase significantly when the walkway comes into
operation.




                                                 114
                                 THE PROPERTIES AND BUSINESS

Tenant Profile


      The 10 largest tenants (in terms of monthly base rent for September 2005) in the Victory
Plaza Units mainly comprise retail businesses as well as food and beverage businesses. A
significant number of the leases of these tenants are for terms of at least two years (the longest
of which is for 10 years) and grant the tenants a right of first refusal to enter into a further tenancy
agreement upon the expiry of their original leases. The typical lease for the Victory Plaza Units
does not expressly provide for any early termination mechanism by the tenants. (See the
sub-section headed “Tenancy Agreements” above.)


    Tenants in the food and beverage business and the retail business respectively accounted for
approximately 26.1% and 67.7% of the monthly base rent of the Victory Plaza Units for September
2005.


     The table below sets out information on the 10 largest tenants of the Victory Plaza Units in
terms of total monthly base rent for September 2005:

                                                                              Percentage     Percentage
                                                                   Gross        of total       of total
                                                                  Rentable      Gross         monthly
Tenant                            Business sector   Expiry date    Area(1)   Rentable Area   base rent

                                                                  (sq.m.)         (%)           (%)


                                    Department      31 Mar 2010   12,484.6         45.8           42.9
(Guangzhou Xindaxin Co., Ltd.)        store


                                     Electrical     31 May 2011    1,918.0          7.0           12.2
(Guangzhou GOME Electrical          appliances
Appliances Co. Ltd.)


                                      Banking       17 Oct 2008      775.6          2.8            6.3
(China Merchants Bank
Guangzhou Branch)


                                     Food and       9 Dec 2013       840.0          3.1            5.8
(Yum! Restaurants                    beverage
(Guangdong) Co., Ltd.)


                                     Food and       9 Dec 2013     3,017.8         11.1            5.4
(Guangzhou Qiao Mei Fa Zhan          beverage
Company Limited)


      (Chen Hui Yi)                  Food and       30 Apr 2014    2,773.2         10.2            5.2
                                     beverage




                                                     115
                               THE PROPERTIES AND BUSINESS

                                                                               Percentage     Percentage
                                                                    Gross        of total      of total
                                                                   Rentable      Gross         monthly
Tenant                             Business sector   Expiry date    Area(1)   Rentable Area   base rent

                                                                   (sq.m.)         (%)           (%)


        (Zhang Li Fen)                  Retail       17 Oct 2006      378.2           1.4           4.8


        (Zhou Cai Xia)             Retail/Food and   15 Oct 2008       77.0           0.3           0.6
                                      beverage           and            and           and          and
                                                     30 Apr 2014    1,996.7           7.3          3.7


                                      Food and       31 Aug 2009      318.2           1.2           3.2
           ¨
(Shanghai Ha agen-Dazs                beverage
Co., Ltd.)


                                      Food and       17 May 2012    1,585.4           5.8           2.8
(Guangzhou Lao Xiang Diet             beverage
Co. Ltd.)


10 largest tenants                                                 26,164.7          96.0          92.9
by total monthly base rent


Other tenants                                                       1,097.6           4.0           7.1


Vacant space                                                              —              —             —


Total                                                              27,262.3         100.0         100.0




Note:

(1)     As at 30 September 2005.


        None of these tenants is a connected person of GZI REIT.




                                                      116
                                   THE PROPERTIES AND BUSINESS

Expiries and Renewals


     The table below sets out, for the periods indicated, details of expiries in respect of tenancies
at the Victory Plaza Units as at 30 September 2005:

                                                                                             Expiring           Expiring
                                                                                          leases/vacant       leases as a
                                                                                           space as a         percentage
                                    Total number                 Gross Rentable            percentage           of total
                                         of leases                 Area of leases         of total Gross        monthly
Period                                   expiring            expiring/vacant space        Rentable Area       base rent(1)

                                                     (%)      (sq.m.)            (%)            (%)                (%)


1 October 2005 to
  31 December 2005                   0                0.0           0.0           0.0           0.0                 0.0
FY2006                               8 (2)           33.3       776.7             2.8           2.8                 7.8
FY2007                               2 (2)            8.3       183.0             0.7           0.7                 1.5
                                         (2)
FY2008                               5               20.9     1,145.9             4.2           4.2                 8.7
FY2009                               2 (2)            8.3       541.1             2.0           2.0                 4.0
                                         (2)(3)                           (3)                         (3)
FY2010 and beyond                    7               29.2   24,615.6             90.3          90.3               78.0 (3)

Sub-total                          24             100.0     27,262.3            100.0        100.0               100.0
Vacant space                      n.a.               n.a.            —           n.a.            —                 n.a.

Total                             n.a.               n.a.   27,262.3             n.a.        100.0                 n.a.




Notes:

(1)     Calculated as a percentage of total monthly base rent of the Victory Plaza Units for September 2005.

(2)     Assuming that the right of first refusal to enter into a further tenancy agreement for leases expiring in the earlier
        periods set out in the table is not exercised.

(3)     The majority of these leases are with tenants in the food and beverage business, who typically enter into longer lease
        terms due to higher expenditure on renovations of their premises. In addition, one of these leases is with Guangzhou
        Xindaxin Co., Ltd., an anchor tenant which occupies a Gross Rentable Area of 12,484.6 sq.m. under a lease expiring
        in March 2010.




                                                             117
                           THE PROPERTIES AND BUSINESS

Past Transactions of the Properties                                                                      App B
                                                                                                         B2 (g)


     Transactions involving transfers of title to the Properties for the last five years preceding the
Latest Practicable Date are described below.


  White Horse Units


     In 2000, the White Horse Building was owned by GCCD Group. According to the Approval
(2001) No. 1807 issued by the State Development and Planning Commission and the Approval
(2001) No. 584 issued by the Ministry of Commerce (previously known as the Ministry of Foreign
Trade and Economic Cooperation), the lower ground floor as well as the 2nd, 3rd, 4th, 6th, 7th, 8th
and 9th storeys of White Horse Building were transferred from GCCD Group to White Horse JV in
December 2002, and the 5th storey of White Horse Building was transferred from GCCD Group to
Xingcheng on 21 November 2002. On 3 December 2002, White Horse JV obtained the Building
Ownership Certificates for the 2nd, 3rd, 4th, 6th and 7th storeys of White Horse Building.


     On 26 October 2004, the title to the 5th storey of White Horse Building was transferred from
Xingcheng to White Horse JV pursuant to the Approval (2004) No. 198 issued by the Guangzhou
Land Bureau and a Building Ownership Certificate for the 5th storey of White Horse Building was
issued to White Horse JV.


     On 15 July 2005, the Building Ownership Certificates for the lower ground floor as well as the
8th and 9th storeys of White Horse Building were issued to White Horse JV.


     On 19 October 2005, in accordance with the Approval (2005) No. 1392 issued by the
Guangzhou Land Bureau, the title to the lower ground floor as well as the 2nd, 3rd, 4th, 5th, 6th,
7th, 8th and 9th storeys of White Horse Building was transferred from White Horse JV to Partat and
Partat obtained the Building Ownership Certificates in respect of all nine White Horse Units.


  Fortune Plaza Units


    In 2000, the Fortune Plaza was still under construction and was owned by GCCD Group.
According to the Approval (2001) No. 1807 issued by the State Development and Planning
Commission and the Approval (2001) No. 584 issued by the Ministry of Commerce (previously
known as the Ministry of Foreign Trade and Economic Cooperation), the property then still under
development was transferred from GCCD Group to GCCD in December 2002.


     On 10 September 2004, in accordance with the Approval (2004) No. 198 issued by the
Guangzhou Land Bureau, the title in respect of 31 strata units comprised in the Fortune Plaza
Units were transferred from GCCD to Moon King.




                                                 118
                           THE PROPERTIES AND BUSINESS

     On 8 August 2005, pursuant to the Approval (2005) No. 1392 issued by the Guangzhou Land
Bureau, the title in respect of 52 strata units comprised in the Fortune Plaza Units were transferred
from GCCD to Moon King.

    As a result of the transfers on 10 September 2004 and 8 August 2005, Moon King obtained
83 Building Ownership Certificates for the Fortune Plaza Units.

  City Development Plaza Units

   In 2000, the City Development Plaza Units were held by GCCD Group, via 164 Building
Ownership Certificates and one title confirmation document.

     According to the Approval (2001) No. 1807 issued by the State Development and Planning
Commission and the Approval (2001) No. 584 issued by the Ministry of Commerce (previously
known as the Ministry of Foreign Trade and Economic Cooperation), the City Development Plaza
Units were transferred from GCCD Group to GCCD in December 2002.

    Pursuant to the Approval (2004) No.198 issued by the Guangzhou Land Bureau, the City
Development Plaza Units were transferred from GCCD to Full Estates, and 165 Building
Ownership Certificates were issued to Full Estates on 20, 21, 22 and 26 October 2004.

  Victory Plaza Units

     In 2000, the land on which Victory Plaza is located belonged to GCCD Group. According to
the Approval (2001) No. 1807 issued by the State Development and Planning Commission and the
Approval (2001) No. 584 issued by the Ministry of Commerce (previously known as the Ministry of
Foreign Trade and Economic Cooperation), the property then still under development was
transferred from GCCD Group to GCCD in December 2002.


     On 6 July 2005 and 15 July 2005, pursuant to the Approval (2004) No.198 and the Approval
(2005) No. 1392 issued by the Guangzhou Land Bureau, the title to Victory Plaza Units were
transferred from GCCD to Keen Ocean and Keen Ocean obtained nine Building Ownership
Certificates for the Victory Plaza Units.

     All the transactions described above were effected for nil consideration.

Acquisition by GZI of a 95.0% Interest in GCCD in 2002

    In 2000, the Properties were held by GCCD Group, which was established in 1983 and was
a state owned enterprise in the PRC under the supervision of Guangzhou Construction
Commission (                 ). GCCD Group was one of the largest property developers in
Guangzhou and held a substantial number of properties and development projects, including the
Properties. Pursuant to the approval document Ji Wai Zi (2001) No. 1807 dated 25 September
2001 issued by the PRC State Development and Planning Commission (“SDPC”)
(                   ), a 95.0% interest in GCCD Group held by the Guangzhou Municipal



                                                119
                            THE PROPERTIES AND BUSINESS

People’s Government was injected into Yue Xiu. The SDPC also approved Yue Xiu’s disposal of
its interest in the reorganised GCCD Group to GZI. For the purposes of the acquisition by GZI,
GCCD Group underwent an internal reorganisation in order to rationalise the business and
shareholding structure of its various business interests before being injected into Yue Xiu.


      Immediately following such reorganisation, new sino-foreign joint venture companies
(including GCCD) were established. These were owned as to 95.0% by GCCD BVI and the
remaining interest by GCCD Group. (See the charts on pages 122 and 123 in this Offering Circular
for an illustration of the ownership structures of the Properties immediately before and after the
above reorganisation.)


      On 20 December 2002, GZI completed the acquisition of, among other things, a 100.0%
interest in GCCD BVI from Yue Xiu for a total consideration which represented a discount of 40.0%
to the appraised audited net asset value of the assets acquired. On completion of the acquisition,
the total fair value of the Properties of HK$1,576.6 million was recorded in the financial statements
of GZI.


       For ease of reference, the following tables summarise the transactions described above:


White Horse Units

                                                                                Mode of Transfer/
Date               Transferor     Transferee    Relevant Floors/Units         Applicable Document



December        GCCD Group      White Horse    Lower ground floor,      By way of internal reorganisation
  2002                          JV             2nd, 3rd, 4th, 6th,      pursuant to the Approval (2001)
                                               7th, 8th and 9th         No. 1807 issued by the State
                                               storeys                  Development and Planning
                                                                        Commission and the Approval
                                                                        (2001) No. 584 issued by the
                                                                        Ministry of Commerce

21 November     GCCD Group      Xingcheng      5th storey               By way of internal reorganisation
  2002                                                                  pursuant to the Approval (2001)
                                                                        No. 1807 issued by the State
                                                                        Development and Planning
                                                                        Commission and the Approval
                                                                        (2001) No. 584 issued by the
                                                                        Ministry of Commerce

26 October      Xingcheng       White Horse    5th storey               By way of internal reorganisation
  2004                          JV                                      pursuant to the Approval (2004)
                                                                        No. 198 issued by the
                                                                        Guangzhou Land Bureau




                                                 120
                            THE PROPERTIES AND BUSINESS

                                                                                Mode of Transfer/
Date               Transferor     Transferee    Relevant Floors/Units         Applicable Document



19 October       White Horse    Partat         Lower ground floor,      By way of internal reorganisation
  2005           JV                            2nd, 3rd, 4th, 5th,      pursuant to the Approval (2005)
                                               6th, 7th, 8th and 9th    No. 1392 issued by the
                                               storeys                  Guangzhou Land Bureau


Fortune Plaza Units

                                                                                Mode of Transfer/
Date               Transferor     Transferee    Relevant Floors/Units         Applicable Document



December         GCCD Group     GCCD           Fortune Plaza (under     By way of internal reorganisation
  2002                                         development)             pursuant to the Approval (2001)
                                                                        No. 1807 issued by the State
                                                                        Development and Planning
                                                                        Commission and the Approval
                                                                        (2001) No. 584 issued by the
                                                                        Ministry of Commerce

10 September     GCCD           Moon King      31 strata units          By way of internal reorganisation
  2004                                                                  pursuant to the Approval (2004)
                                                                        No. 198 issued by the
                                                                        Guangzhou Land Bureau

8 August 2005    GCCD           Moon King      52 strata units          By way of internal reorganisation
                                                                        pursuant to the Approval (2005)
                                                                        No. 1392 issued by the
                                                                        Guangzhou Land Bureau


City Development Plaza Units

                                                                                Mode of Transfer/
Date               Transferor     Transferee    Relevant Floors/Units         Applicable Document



December         GCCD Group     GCCD           All strata units         By way of internal reorganisation
  2002                                                                  pursuant to the Approval (2001)
                                                                        No. 1807 issued by the State
                                                                        Development and Planning
                                                                        Commission and the Approval
                                                                        (2001) No. 584 issued by the
                                                                        Ministry of Commerce

20, 21, 22 and   GCCD           Full Estates   All strata units         By way of internal reorganisation
  26 October                                                            pursuant to the Approval (2004)
  2004                                                                  No. 198 issued by the
                                                                        Guangzhou Land Bureau




                                                 121
                                   THE PROPERTIES AND BUSINESS

Victory Plaza Units

                                                                                                Mode of Transfer/
Date                      Transferor      Transferee       Relevant Floors/Units           Applicable Document



December            GCCD Group         GCCD               Victory Plaza            By way of internal reorganisation
  2002                                                    (under development)      pursuant to the Approval (2001)
                                                                                   No. 1807 issued by the State
                                                                                   Development and Planning
                                                                                   Commission and the Approval
                                                                                   (2001) No. 584 issued by the
                                                                                   Ministry of Commerce

6 and 15 July       GCCD               Keen Ocean         All strata units         By way of internal reorganisation
  2005                                                                             pursuant to the Approval (2004)
                                                                                   No.198 and the Approval (2005)
                                                                                   No. 1392 issued by the
                                                                                   Guangzhou Land Bureau


     The following diagram illustrates the ownership structures of the Properties immediately
before the transfers thereof to White Horse JV or GCCD (as the case may be)(1):


                                                             Guangzhou Municipal People's Government




                                          GCCD Group(2)                                                     Yue Xiu




                                                      City Development                                        GZI
  White Horse Units             Fortune Plaza                                   Victory Plaza
                                                     Plaza units plus other
 plus other portions of             (under                                         (under
                                                        portions of City
 White Horse Building           development)                                    development)
                                                     Development Plaza




Notes:

(1)    Not all the intermediate holding entities are included in the chart.

(2)    A state owned enterprise in the PRC separate from the Yue Xiu Group and the GZI Group.




                                                            122
                                    THE PROPERTIES AND BUSINESS

     The following diagram illustrates the ownership structures of the Properties immediately
before the transfers thereof to the BVI Companies:


                                                                                                                                      (2)
                                                  Public                                          Yue Xiu              GCCD Group

                                                               (1)                                             (1)
                                                        49.8%                                          50.2%



                                                                              GZI


                                                                                    100.0%


                                                                           GCCD BVI
                                                                                                                                 5.0%
                                                                                    100.0%

  (Guangzhou Hua
  Zhen Technology           Other property     Superinvestor                                 Acon Investment Ltd
Investment Co., Ltd.)
                     (4)
                           investments and        (BVI)                                             (BVI)
       (PRC)                 developments
                                                       95.98%                                          95.0%
             4.02%                              White Horse                                              (3)
                                                      (3)                                         GCCD
                                                    JV



                                                                                              City Development
                                             White Horse Units           Fortune Plaza
                                                                                               Plaza Units plus      Victory Plaza Units
                                             plus other portions        Units plus other
                                                                                              other portions of      plus other portions
                                               of White Horse          portions of Fortune                                             (8)
                                                           (5)                      (6)       City Development        of Victory Plaza
                                                  Building                   Plaza                        (7)
                                                                                                    Plaza




Notes:

(1)   As at the Latest Practicable Date.

(2)   A state owned enterprise in the PRC separate from the Yue Xiu Group and the GZI Group.

(3)   A sino-foreign joint venture company.

(4)   A PRC-incorporated company which is a wholly owned subsidiary of GZI.

(5)   Comprising a car park.

(6)   Comprising certain units in the podium, a clubhouse and a carpark.

(7)   Comprising space used for GCCD’s offices, a clubhouse, a restaurant and a car park.

(8)   Comprising a car park and two tower blocks currently under construction and which are expected to be completed
      in 2007.




                                                                     123
                                  THE PROPERTIES AND BUSINESS

     The following diagram illustrates the ownership structures of the Properties upon completion
of the transfers thereof to the BVI Companies as at the Latest Practicable Date:


                                             Public                             Yue Xiu

                                                 (1)                                            (1)
                                         49.8%                                          50.2%


                                                                   GZI


                                                                     100.0%

                                                               GCCD BVI

                                                                     100.0%



                              Partat                   Moon King         Full Estates            Keen Ocean




                           White Horse            Fortune Plaza      City Development            Victory Plaza
                              Units                   Units             Plaza Units                  Units




Note:

(1)     As at the Latest Practicable Date.




                                                                   124
                                  THE REORGANISATION

Reorganisation of the GZI Group


     GZI REIT is a real estate investment trust established as part of an internal reorganisation of
the GZI Group of part of its real estate portfolio. The reorganisation was effected in the manner
described below.


     GZI REIT was constituted by the Trust Deed entered into on 7 December 2005 between the
Manager and the Trustee. Holdco is a wholly owned subsidiary of the Trustee (acting in its capacity
as trustee of GZI REIT).


    On 7 December 2005, Holdco, the Manager and the Trustee entered into the Reorganisation            RC 8.4(b)
                                                                                                       App B
Deed with GCCD BVI (as vendor) and GZI (as guarantor of GCCD BVI’s obligations under the               B2 (f)

Reorganisation Deed), pursuant to which Holdco agreed to acquire 100.0% of the issued capital
of each of the BVI Companies. The Initial Consideration payable by Holdco under the
Reorganisation Deed for the BVI Company Shares was HK$4,014,180,000 (but is subject to
adjustment as described in the section headed “Material Agreements and Other Agreements
Relating to GZI REIT — Reorganisation Deed” in this Offering Circular).


     The Initial Consideration was calculated based on the combined NAV of the BVI Companies
as at 31 October 2005 of HK$2,972,767,000 plus amounts due to fellow subsidiaries thereof as at
31 October 2005 of HK$994,267,000 as well as HK$47,146,000 to be injected by GZI into the BVI
Companies before the closing of the Global Offering. This was satisfied through the issue of
417,000,000 Units to Dragon Yield and the delivery of the Promissory Note to GZI (see the section
headed “Material Agreements and Other Documents Relating to GZI REIT — Reorganisation
Deed” in this Offering Circular).


    Completion of the transfer of the BVI Company Shares to Holdco took place on 7 December
2005. As at the Latest Practicable Date, all the Units in GZI REIT were indirectly owned by GZI.




                                                125
FINANCIAL INFORMATION AND FORECAST




               126
              SELECTED FINANCIAL AND OPERATING INFORMATION


 The following discussion and the selected financial and operating information set forth below
 should be read in conjunction with the Audited Financial Statements of the Properties and
 Audited Financial Statements of the BVI Companies set forth in Appendices I and II to this
 Offering Circular. The Audited Financial Statements of the Properties and Audited Financial
 Statements of the BVI Companies have been prepared in accordance with HKFRS.


      The financial information of the Properties and the BVI Companies in this Offering Circular
relate to the Properties and BVI Companies under their previous ownership and management. As
the Properties formed part of the business operations of the subsidiaries of GZI and there were no
separate books and records maintained for each of the Properties on a standalone basis, the
Audited Financial Statement of Properties have been prepared for the period from 20 December
2002 (1) to 31 December 2002, each of FY2003 and FY2004, as well as each of the six months
ended 30 June 2004 and 30 June 2005 according to the basis of preparation and assumptions set
out in Note 2 to the Audited Financial Statements of the Properties in Appendix I to this Offering
Circular, which include two particular accounting treatments: (i) interest charges incurred at the
central treasury of GCCD are not reflected in the combined financial statements as there were no
direct bank borrowings for the GCCD Properties; and (ii) income tax expenses were reported to the
relevant tax bureau on an entity basis by GCCD. As such, income tax expenses for the GCCD
Properties are calculated based on the tax rate applicable to these Properties as if they were
collectively a separate tax entity. As the Properties were not operated as a single standalone entity
in the past, the Audited Financial Statements of the Properties may not give a true picture of the
performance of the Properties as if they had been operated on a standalone basis.


     Information contained here may not be an indication of the future operations of GZI REIT. The
method of managing the Properties under GZI REIT has been designed to comply with the REIT
Code and to meet general expectations in respect of a real estate investment trust’s property and
financial management processes. Following the transfer of the Properties to GZI REIT, the
management structure and the cost and capital structures of the Properties as well as the
management philosophy and operational processes of the Manager are expected to differ from
those previously adopted with respect to the Properties. These variations are expected to affect
the future financial results of GZI REIT (see the sections headed “Manager’s Discussion of Future
Operations” and “Profit Forecast” in this Offering Circular).


     The Audited Financial Statements of the BVI Companies have been presented on a combined
basis to represent the combined state of affairs as at 31 October 2005 as well as combined results
and combined cash flows for the ten months ended 31 October 2005. (See Appendix II to this
Offering Circular for the details of the Audited Financial Statements of the BVI Companies.)




(1)   Being the date on which the transfer of the Properties from GCCD Group to GCCD was completed (see the section
      headed “The Properties and Business — Past Transactions of the Properties” in this Offering Circular).




                                                        127
             SELECTED FINANCIAL AND OPERATING INFORMATION

Audited Financial Statements of the Properties


  Combined Income Statements

                                            Period from
                                                                                      Six months ended
                                            20 December
                                                                                           30 June
                                             2002(1) to
                                            31 December                              2004(2)
                                               2002         FY2003      FY2004     (Unaudited)       2005

                                             (HK$’000)     (HK$’000)   (HK$’000)    (HK$’000)    (HK$’000)


  Turnover — Rental Income and
    property management fees                    3,274      129,395     172,080        79,610       92,644 (3)
  Other gains — net                               203        11,731       9,481        4,406         5,863


    Property management fees                       (27)      (1,221)     (5,700)      (1,814)        (3,597)
    Promotional and agency expense               (195)       (5,495)     (5,160)      (1,986)        (3,436)
    Fitting out and maintenance expenses           (14)      (1,474)     (2,116)      (1,077)        (1,204)
    Business tax and flood prevention fee        (184)       (8,632)    (10,715)      (4,972)        (7,056)
    Bad debts                                       —          (430)       (611)        (167)         (443)
    Employment benefit expense                   (440)      (14,757)    (17,488)      (6,199)        (7,153)
    Depreciation expenses                          (41)      (1,664)     (1,285)        (688)          (611)
    Miscellaneous expenses                       (212)       (6,403)     (7,935)      (2,863)        (3,547)

  Direct outgoings                             (1,113)      (40,076)    (51,010)     (19,766)     (27,047)


  Other operating expenses                         (30)      (2,927)     (2,799)      (1,495)        (2,446)


  Operating Income                              2,334        98,123    127,752        62,755       69,014 (3)


  Finance costs (4)                                 —            —           —            —                 —
  Fair value gains on investment
    properties                                      —(5)   246,341        5,107           —(5)   612,044

  Profit before taxation                        2,334      344,464     132,859        62,755     681,058
  Income tax expenses                            (770)     (109,608)    (44,273)     (20,709)    (214,650)


  Profit for the period/year                    1,564      234,856      88,586        42,046     466,408


  Profit for the period/year before fair
    value gains on investment
    properties and related tax impact(6)        1,564        65,742     85,594        42,046       46,239




                                                 128
            SELECTED FINANCIAL AND OPERATING INFORMATION


Notes:

(1)   Being the date on which the transfer of the Properties from GCCD Group to GCCD was completed (see the
      section headed “The Properties and Business — Past Transactions of the Properties” in this Offering Circular).

(2)   The figures for the six months ended 30 June 2004 have only been reviewed and not audited.

(3)   In order to present the Rental Income and Operating Income on a comparable basis and to reflect the historical
      performance of the Properties over the two and one-half years ended 30 June 2005, the non-recurring item in the
      financial statements for the six months ended 30 June 2005 (namely, the accelerated amortisation of deferred
      assets amounting to approximately HK$17.0 million (see the section headed Manager’s Discussion and Analysis
      of Financial Condition and Results of Operation — Audited Financial Statements of the Properties — Key Items
      in the Combined Income Statements — Gross Turnover” in this Offering Circular for an explanation of the nature
      of this item)) has been excluded from the discussion in the section headed “Management’s Discussion and
      Analysis of Financial Condition and Results of Operations” in this Offering Circular, and the adjusted turnover and
      operating income are as follows:

                                                                                                        Six months
                                                                                                           ended
                                                                                                       30 June 2005

                                                                                                         (HK$’000)


      Gross Turnover                                                                                      109,595
      Operating Income                                                                                      85,965



(4)   Interest charges incurred at the central treasury of GCCD are not reflected as a part of the basis of preparation
      of the Audited Financial Statements of the Properties as there were no direct bank borrowings in respect of the
      Fortune Plaza Units, the City Development Plaza Units and the Victory Plaza Units.


      There were no finance costs incurred for the White Horse Units during the relevant period.


(5)   No revaluation of the Properties was carried out during the six months ended 30 June 2004. There was no
      revaluation gain or loss during the period from 20 December 2002 to 31 December 2002.


(6)   Assuming the direct application of enterprise income tax of 33.0% on Operating Income.




                                                        129
              SELECTED FINANCIAL AND OPERATING INFORMATION

Audited Financial Statements of the Properties
  Combined Balance Sheets

                                                                       As at 31 December                       As at
                                                                                                              30 June
                                                             2002             2003            2004             2005
                                                           (HK$’000)       (HK$’000)       (HK$’000)         (HK$’000)

  ASSETS
  Non-current assets
  Property, plant and equipment                                118,128       11,165           10,598             7,169
  Land use rights                                              252,929           —                —              1,230(1)
  Investment properties (2)                                  1,576,633    2,437,384        2,444,859         3,114,286

                                                             1,947,690 2,448,549        2,455,457        3,122,685
                                                         ------------------------------------------------------------
  Current assets
  Deferred assets                                                6,521         9,344          16,641             4,995
  Prepayments, deposits and other receivables                    3,653         4,350           5,400             6,093
  Cash and cash equivalents                                     31,978        41,878          39,695            18,329

                                                                42,152       55,572         61,736          29,417
                                                         ------------------------------------------------------------
  Total assets                                               1,989,842    2,504,121        2,517,193        3,152,102


  LIABILITIES
  Non-current liabilities
  Deferred tax liabilities                                     387,269       467,640         473,536           669,736
  Rental deposits, non-current portion                          23,715        27,170          10,051            15,097

                                                               410,984      494,810        483,587         684,833
                                                         ------------------------------------------------------------
  Current liabilities
  Rental deposits, accruals and other payables                  10,291        18,758          43,841            43,873
  Current tax payable                                            7,721         4,720           6,151             5,550

                                                                18,012       23,478         49,992          49,423
                                                         ------------------------------------------------------------
  Total liabilities                                            428,996       518,288         533,579           734,256

  Net assets                                                 1,560,846    1,985,833        1,983,614        2,417,846
  Financed by:
  Accounts with Subsidiaries of GZI
    - Arising from accumulated profits                           1,564      236,420          325,006          791,414
    - Others                                                 1,559,282    1,749,413        1,658,608        1,626,432

                                                             1,560,846    1,985,833        1,983,614        2,417,846


  Notes:
  (1)   This amount represented pre-paid operating lease payments for the land use rights of the units in the White Horse
        Units used by White Horse Property Management Company as its on-site property management office (see the
        section headed “The Leasing Agents — Property Management Offices” in this Offering Circular) and was
        classified as investment properties when Partat became the beneficial owner of the White Horse Units.
  (2)   Investment property is carried at fair value under the relevant accounting policies. The valuer appointed
        historically (Greater China Appraisal Limited) is different from the one appointed by the Manager for GZI REIT.
        In the past, Greater China Appraisal Limited had primarily relied on the income capitalisation approach in valuing
        the Properties.


                                                         130
            SELECTED FINANCIAL AND OPERATING INFORMATION

Audited Financial Statements of the Properties

  Combined Cash Flow Statements

                                    Period from                                          Six months ended
                                    20 December                                               30 June
                                      2002(1) to
                                    31 December                                       2004(2)
                                        2002          FY2003          FY2004        (Unaudited)       2005

                                     (HK$’000)       (HK$’000)       (HK$’000)       (HK$’000)     (HK$’000)


  Cash flows from operating
    activities
  Net cash inflow from operations         8,966       107,919         128,009          51,042        88,047
  PRC enterprise income tax                  —        (32,238)        (36,946)        (18,153)      (19,051)


  Net cash inflow from operating
    activities                            8,966         75,681         91,063          32,889        68,996
                                    ----------------------------------------------------------------------------

  Cash flows from investing
     activities
  Acquisition of businesses by
     subsidiaries of GZI
     recognised in the accounts
     with subsidiaries of GZI       (1,568,637)              —              —               —             —
  Acquisition of businesses by
     subsidiaries of GZI, net of
     cash acquired                      32,344               —              —               —             —
  Addition of property, plant and
     equipment                               —       (253,028)            (722)          (191)        (3,891)
  Proceeds from sale of property,
     plant and equipment                     —               —              —               —           617
  Addition of investment
     properties                              —          (3,154)         (2,368)            —        (54,526)
  Addition of land use right                 —              —               —              —         (1,230)
  Interest received                          23            270             649            263           844


  Net cash inflow/(outflow) from
    investing activities             (1,536,270)      (255,912)         (2,441)             72       (58,186)
                                    ----------------------------------------------------------------------------

                                    (1,527,304)      (180,231)         88,622          32,961        10,810

  Net advances from/(to)
    subsidiaries of GZI              1,559,282        190,131         (90,805)        (34,210)      (32,176)


  Increase/(decrease) in
    cash and cash equivalents (3)       31,978            9,900         (2,183)        (1,249)      (21,366)




                                                    131
           SELECTED FINANCIAL AND OPERATING INFORMATION

                                     Period from                                            Six months ended
                                    20 December                                                    30 June
                                      2002(1) to
                                    31 December                                         2004(2)
                                        2002            FY2003          FY2004        (Unaudited)         2005

                                      (HK$’000)       (HK$’000)        (HK$’000)       (HK$’000)       (HK$’000)


Balances at beginning of
  year/period
  — Cash and cash
     equivalents (3)                          —           31,978           41,878          41,878         39,695
  — Accounts with
     subsidiaries of GZI(4)                   —      (1,559,282)      (1,749,413)     (1,749,413)     (1,658,608)



Balances at end of year/period
  — Cash and cash
     equivalents (3)                     31,978           41,878           39,695          40,629         18,329
  — Accounts with
     subsidiaries of GZI(4)          (1,559,282)     (1,749,413)      (1,658,608)     (1,715,203)     (1,626,432)



Notes:

(1)   Being the date on which the transfer of the Properties from GCCD Group to GCCD was completed (see the
      section headed “The Properties and Business — Past Transactions of the Properties” in this Offering Circular).

(2)   The figures for the six months ended 30 June 2004 have only been reviewed and not audited.

(3)   Changes in cash and cash equivalents are attributable to the operations of the White Horse Units.

(4)   The treasury and cash disbursement functions of the GCCD Properties were centrally administered by GCCD.
      Cash flows such as receipt of rental income, settlement of expense payable and the acquisitions of assets were
      handled by GCCD centrally and therefore reflected herein.




                                                      132
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS


 The following discussion and the selected financial and operating information set forth below
 should be read in conjunction with the Audited Financial Statements of the Properties and
 Audited Financial Statements of the BVI Companies in Appendices I and II to this Offering
 Circular respectively, which have been prepared in accordance with HKFRS.

 Renminbi amounts herein have been translated into Hong Kong dollars based on the exchange
 rate of RMB1.07 = HK$1.00, which was the exchange rate applied in the Audited Financial
 Statements of the Properties for each of FY2003 and FY2004 as well as each of the six months
 ended 30 June 2004 and 30 June 2005. A different exchange rate of RMB1.04 = HK$1.00 was
 applied in the Audited Financial Statements of the BVI Companies. However, such translations
 should not be construed as representations that such Renminbi amounts have been, could have
 been or could be converted into Hong Kong dollars at that or any other rate.


Introduction


     For the purposes of the Global Offering, the Manager has prepared the Audited Financial
Statements of the Properties to present the results of the operations of the Properties for each of
FY2003 and FY2004 as well as each of the six months ended 30 June 2004 and 30 June 2005.


     As GZI’s acquisition of the Properties (see the section headed “The Properties and Business
— Past Transactions of the Properties” in this Offering Circular) was only completed in December
2002, only 11 days of financial records for 2002 are available to the Manager. While the Audited
Financial Statements of the Properties present the results of the operations of the Properties in
December 2002, these results have not been included in the following discussion because they
cannot be meaningfully discussed.


     Moon King, Full Estates and Keen Ocean became the beneficial owners of the Fortune Plaza
Units, the City Development Plaza Units and the Victory Plaza Units on 1 September 2005. Partat
became the beneficial owner of the White Horse Units on 19 October 2005. (See the section
headed “The Properties and Business — Past Transactions of the Properties” in this Offering
Circular.) Since the financial results of the BVI Companies only represent operations of at most
two months, no meaningful discussion and analysis can be presented herein.


     The method of managing the Properties under GZI REIT has been designed to comply with
the REIT Code and to meet general expectations in respect of a real estate investment trust’s
property and financial management processes. Following the transfer of the Properties to GZI
REIT, the management structure and the cost and capital structures of the Properties as well as
the management philosophy and operational processes of the Manager are expected to differ from
those previously adopted with respect to the Properties. These variations are expected to affect
the future financial results of GZI REIT (see the sections headed “Manager’s Discussion of Future
Operations” and “Profit Forecast” in this Offering Circular).




                                               133
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

     The Audited Financial Statements of the Properties and the Audited Financial Statements of
the BVI Companies as well as the discussion and analysis of financial condition and results of
operations are set out herein for the purpose of providing investors with an indication of the past
performance of the Properties while owned and managed by the GZI Group. As the Properties
were not operated as a single standalone entity in the past, the Audited Financial Statements of
the Properties and the Audited Financial Statements of the BVI Companies may not give a true
picture of the performance of the Properties as if they had been operated on a standalone basis.
In addition, this information should not be relied upon as an indication of the future performance
of the Properties when operated under the Manager.




                                               134
      The Properties

           As at 30 September 2005, the Properties comprised 70,992.5 sq.m. of Gross Rentable Area used as office/warehouse space and
      88,030.6 sq.m. of Gross Rentable Area used for wholesale or retail activities.

      Turnover Trends

           The following table sets out information on the leased Gross Rentable Area, Gross Turnover and Operating Income/(Loss) derived
      from each of the Properties as at and for the years ended 31 December 2003 and 31 December 2004 as well as Gross Turnover per
      square metre for the months ended 31 December 2003 and 2004:
                                                                                                                                                       Gross Turnover
                                                                 Leased Gross                                                                             per sq.m.
                                                                 Rentable Area                                                                      for the month ended
                                                               as at 31 December            Gross Turnover        Operating Income/(Loss)              31 December(4)
          Property                                           2003          2004          FY2003        FY2004       FY2003        FY2004             2003          2004
                                                            (sq.m.)       (sq.m.)       (HK$’000)     (HK$’000)    (HK$’000)     (HK$’000)          (HK$)         (HK$)

          White Horse Units                                46,875.9      48,906.3 (1)    89,754       104,737       69,112         77,500           159.6         178.5
          Fortune Plaza Units                               1,751.9      16,872.0           150 (2)     9,042       (1,653)         1,969            72.1         103.7




135
          City Development Plaza Units                     37,643.8      37,890.1        31,911        33,904       28,128         29,635            77.1          75.3
          Victory Plaza Units                              19,059.7      19,046.4         7,580 (3)    24,397        2,536         18,648           100.5         103.0
          Total                                           105,331.3     122,714.8       129,395       172,080       98,123       127,752




          Notes:
                                                                                                                                                                                              AND RESULTS OF OPERATIONS




          (1)     The increase in the leased Gross Rentable Area was mainly attributable to the enhanced efficiency in usage of the area arising from the reformatting of the
                  floor space subsequent to the expiration and termination of two head leases. The reformatting of the area to smaller leasable units allowed the inclusion
                  of previously unallocated common area on the respective floors to the Gross Rentable Area.

          (2)     The first tenancy in the Fortune Plaza Units only commenced in September 2003. Accordingly, Gross Turnover for 2003 is based on the four months from
                  September 2003 to December 2003.

          (3)     The first tenancy in the Victory Plaza Units only commenced in August 2003. Accordingly, Gross Turnover for 2003 is based on the five months from August
                  2003 to December 2003.

          (4)     In view of the change in leased Gross Rentable Area over the periods set out in the table above and the commencement of certain leases only in the second
                                                                                                                                                                                MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION




                  half of 2003, Gross Turnover per square metre has not been calculated on a semi-annual or annual basis. Instead the Gross Turnover per square metre is
                  computed as the Gross Turnover of the month and divided by the leased Gross Rentable Area as of the end of the month.
           The following table sets out information on the leased Gross Rentable Area, Gross Turnover and Operating Income/(Loss) derived
      from each of the Properties as at and for the six months ended 30 June 2004 and 30 June 2005 as well as Gross Turnover per square
      metre for the months ended 30 June 2004 and 2005:

                                                                                                                                                    Gross Turnover
                                                                Leased Gross              Gross Turnover        Operating Income/(Loss)                per sq.m.
                                                                Rentable Area           for the six months          for the six months               for the month
                                                                as at 30 June             ended 30 June               ended 30 June                 ended 30 June(1)

                                                                                    (Unaudited)                 (Unaudited)
          Property                                           2004         2005          2004          2005          2004          2005             2004          2005

                                                            (sq.m.)      (sq.m.)     (HK$’000)     (HK$’000)     (HK$’000)     (HK$’000)           (HK$)         (HK$)


          White Horse Units                                48,426.4     48,442.5       48,112        65,916        37,623        55,251           165.6         226.8
          Fortune Plaza Units                                6,865.5    28,967.4        1,917        13,334          (348)        7,889             88.7           89.2
          City Development Plaza Units                     38,313.0     38,998.1       17,084        17,499        15,125        14,127             74.6           76.5
          Victory Plaza Units                              17,155.6     26,470.6       12,497        12,846        10,355         8,698             93.6        109.0




136
          Total                                            110,760.5   142,878.6       79,610       109,595        62,755        85,965




          Note:

          (1)     In view of the change in leased Gross Rentable Area over the periods set out in the table above, Gross Turnover per square metre has not been calculated
                                                                                                                                                                                            AND RESULTS OF OPERATIONS




                  on a semi-annual or annual basis. Instead, the Gross Turnover per square metre is computed as the Gross Turnover of the month divided by the leased Gross
                  Rentable Area at the end of the month.
                                                                                                                                                                              MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
      MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATIONS

Occupancy Trends


     The following table sets out information on the average occupancy rates of the Properties for
FY2003, FY2004, the nine months ended 30 September 2005 and each of the six months ended
30 June 2004 and 30 June 2005, as well as the occupancy rates as at 30 September 2005:

                                                      Six                      Six        Nine
                                                    months                  months      months
                                                    ended                     ended      ended            As at
                                                    30 June                 30 June 30 September 30 September
Property                               FY2003        2004      FY2004         2005        2005            2005

                                         (%)          (%)        (%)           (%)         (%)             (%)
White Horse Units
 — Wholesale/retail                     100.0       100.0       100.0         100.0      100.0           100.0
 — Office/warehouse                     100.0       100.0       100.0         100.0      100.0           100.0
Combined                                100.0       100.0       100.0         100.0      100.0           100.0

Fortune Plaza Units
  — Retail                               n.m. (1)      0.0       17.9         100.0        90.5           14.9 (2)
  — Office                               n.m.(1)      10.5       21.3          55.7        63.3           83.5
Combined                                 n.m.(1)       9.5       21.0          60.0        65.9           76.9

City Development Plaza Units
  — Retail                               83.6         86.0       85.8          85.5        85.5           85.5
  — Office                               83.6         91.2       90.8          90.6        91.6           93.0
Combined                                 83.6         89.8       89.4          89.2        89.9           91.0

Victory Plaza Units
  — Retail                               n.m. (3)     87.1       81.8          77.7        85.2          100.0

Weighted average across
  the Properties (4)
  — Wholesale/retail                     n.m.         89.8       88.9          91.2        93.1           94.3
  — Office/warehouse                     n.m.         50.2       55.6          73.2        77.5           88.5
                                         n.m.         72.1       74.0          83.2        86.1           91.7



Notes:

(1)    The first tenancy in the Fortune Plaza Units only commenced in September 2003.

(2)    The occupancy rate as at 30 September 2005 was lower than the average occupancy rate for the nine months ended
       30 September 2005 due to the early termination of a large lease in September 2005. As at 31 October 2005, the
       occupancy rate was 82.0% due to two tenants taking up part of the vacated space.

(3)    The first tenancy in the Victory Plaza Units only commenced in August 2003.

(4)    Weighted based on the Gross Rentable Area of each of the Properties.




                                                        137
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

AUDITED FINANCIAL STATEMENTS OF THE PROPERTIES


Key Items in the Combined Income Statements


Gross Turnover


     As per the accounting policy in relation to the Properties, Rental Income recorded in the
Audited Financial Statements of the Properties is recognised on an accrual basis by averaging out
the impact of rent-free periods, contracted rental escalations and discounts, and such other terms
affecting the monthly cash received from Rental Income under each tenancy agreement. Thus, a
fixed average monthly Rental Income is recognised for the entire lease term of each tenancy
agreement, which effectively amortises the impact of rent-free periods, contracted rental
escalations and discounts, and other relevant lease terms on the Rental Income over the relevant
lease periods. The temporary difference in cash income and accounting income is reflected as
deferred assets, being the Rental Income recognised but not yet received in cash.


     The Fortune Plaza Units, the City Development Plaza Units and the Victory Plaza Units were
transferred to the relevant BVI Companies between 10 September 2004 and 8 August 2005 but at
the agreement of the parties the risks and rewards in relation to the Fortune Plaza Units, the City
Development Plaza Units and the Victory Plaza Units were only passed to the relevant BVI
Companies on 1 September 2005. The relevant parties agreed that the deferred assets originally
recorded in the accounts of the transferor would not be transferred to the transferee of the GCCD
Properties.


      There was no change in accounting policy for the GCCD Properties. However, due to the fact
that the tenancy agreements for the GCCD Properties were originally scheduled to expire beyond
1 September 2005, this post balance sheet event resulted in an accelerated amortisation of the
deferred assets which significantly reduced the Rental Income and Operating Income for the
GCCD Properties by HK$17.0 million (HK$3.0 million for the Fortune Plaza Units, HK$4.5 million
for City Development Plaza Units and HK$9.5 million for the Victory Plaza Units) for the six months
ended 30 June 2005. As there was no such non-recurring event for the two years ended 31
December 2004, in order to present the Rental Income and Operating Income of the GCCD
Properties on a comparable basis, the discussion of Rental Income and Operating Income of the
GCCD Properties for the six months ended 30 June 2005 in this section has excluded this
accelerated amortisation of deferred assets.


     Following the transfer of the Properties, the same accounting policy continued to be in effect.
The Rental Income of the BVI Companies will be recognised after considering rental escalations
or discounts and such other terms affecting the future income.




                                                138
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

  White Horse Units


      Historically, rent and property management fees were paid in an undivided amount by the
tenants in the White Horse Units to White Horse Property Management Company under their
leases. Leases in the White Horse Units were signed by White Horse Property Management
Company and, during the relevant periods, were typically for terms of three years. Such leases
generally provided for annual rental revisions, subject to negotiation with the tenants, of up to
5.0% per annum in the second year of the lease term and up to 8.0% per annum in the third year
of the lease term. Leases with terms of less than three years generally provided for a fixed monthly
rent payable for the entire term of the lease. Rental rates for the White Horse Units are subject to
review and renegotiation on renewal of the leases.


     Gross Turnover in relation to the White Horse Units included property management fees paid
by the tenants to White Horse Property Management Company.


  The GCCD Properties


     Rental Income consisted of rent paid by tenants in each of the GCCD Properties under their
leases. Depending on factors such as the needs of tenants as well as how established and
reputable a particular property is, the terms of such tenancy agreements generally ranged from
one to three years.


     The leases in the Fortune Plaza Units and the City Development Plaza Units did not offer any
rental discounts during the relevant periods. Instead, more than 50.0% of the leases in the City
Development Plaza Units included annual rent escalation provisions of between 5.0% and 8.0%.
Rental rates for these three Properties are subject to review and renegotiation on renewal of the
leases.


     In the case of the Victory Plaza Units, most tenants enjoyed a rental discount for the first two
years of their leases. Initial discounts of 30.0% were granted when the Victory Plaza Units
commenced operations in the second half of 2003 to induce potential tenants to take up space in
the Property. In the second half of 2004, due to commencement of the construction of the two
office towers above the Victory Plaza podium, most of the tenants were offered a further discount
of 20.0% for the period up to the completion of the construction (expected to be end of 2007).
Three long term tenants were granted this 20.0% discount for an additional extension of three or
four months following the completion of such works. These three tenants accounted for 24.8% of
the Rental Income of the Victory Plaza Units in FY2004.




                                                139
  MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                AND RESULTS OF OPERATIONS

Other gains — net


  White Horse Units


    For the White Horse Units, other gains — net consisted of the following items:


    •    Consultancy fees: Consultancy fees comprised fees charged by White Horse Property
         Management Company to third parties as well as to tenants for the provision of
         consultation services in relation to matters such as the operation of a garment market
         in Chengdu, for instance, and the organisation of garment fairs and exhibitions for
         tenants and third parties. The Manager understands that White Horse Property
         Management Company will continue to provide such services. However, GZI REIT will
         not enjoy such income as it does not provide these services;


    •    Labour charges: Labour charges consisted of the income derived by White Horse
         Property Management Company from the provision of additional or overtime labour,
         either at the request of tenants for urgent renovation works at the tenant’s unit or in
         conjunction with the provision of courier and transportation arrangement services for
         customers in the Property. The Manager understands that White Horse Property
         Management Company will continue to provide such services. However, GZI REIT will
         not enjoy such income as it does not provide such services;


    •    Surplus from electricity charges: Surplus from electricity charges comprised the surplus
         of receipts from the tenants in the White Horse Units after payment of the electricity bills
         for the White Horse Units. Tenants were charged on a cost plus basis to cover the
         electricity used for common areas in the Property and for the supply to them of electricity
         from the generators in White Horse Building. Improvements to the electricity
         transmission network capacity and equipment in 2005 increased the supply of electricity
         to White Horse Building. The operations of White Horse Building were not affected by
         any insufficiency or irregularity of electricity supply in the two years and six months
         ended 30 June 2005;


    •    Administrative fees for transfer of leases: Under the standard lease agreement for the
         White Horse Units, tenants in the White Horse Units were allowed to apply for early
         termination of their leases. Such early termination was subject to the landlord’s
         discretion. Consent for such early termination was granted on a case by case basis,
         particularly if the tenant were able to procure a replacement tenant to enter into a new
         lease for the same premises. In such cases, the departing tenant had to pay an
         administrative fee equivalent to 1.5 month’s rent. Each such tenant was then permitted
         to transfer its lease to the replacement tenant by way of cancellation of the existing
         lease and entry into a new lease with the replacement tenant on the same terms and
         conditions (save that the duration of the new lease would only have been for the
         unexpired term of the original lease). Such fees were levied in order to, among other
         things, cover the administrative costs incurred.



                                               140
MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
              AND RESULTS OF OPERATIONS

     The table below sets out the number of leases in the White Horse Units that were so
     transferred in FY2003, FY2004 and each of the six months ended 30 June 2004 and 30
     June 2005:

                                                                        Six months ended
                                                                              30 June

                                              FY2003     FY2004        2004             2005



     Number of leases transferred                 163       143          62              125
     % of average number of leases            18.6%      14.4%         6.9%             9.7%
     Gross Rentable Area under the leases
       transferred (sq.m.)                    6,415       5,671       2,492             4,387
     % of total Gross Rentable Area as at
       end of the period                      13.7%      11.6%         5.1%             9.1%



 •   Income from indoor illuminated billboards: Income from indoor illuminated billboards
     comprised charges paid by tenants for the use of illuminated billboards installed within
     White Horse Building to display advertisements. Contracts for such purpose were
     typically for a duration of two years;


 •   Ad hoc and other miscellaneous income: Ad hoc and other miscellaneous income
     consisted of income derived from the casual letting of the events hall as well as the
     meeting and conference rooms in White Horse Building, organisation of garment
     exhibitions and other events in the events hall, and other miscellaneous income; and


 •   Fair value gain: This reflects the accounting assessment of fair value gain in rental
     deposits under HKFRS.




                                            141
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

    The following table sets out the other gains — net of the White Horse Units for FY2003,
FY2004 and each of the six months ended 30 June 2004 and 30 June 2005:

                                                                              Six months ended
                                                                                     30 June

                                                                           (Unaudited)
                                                    FY2003      FY2004        2004             2005

                                                   (HK$’000)   (HK$’000)   (HK$’000)       (HK$’000)


     Consultancy fees                                1,482        626          346               225
     Labour charges                                      432       17           11                    5
     Surplus from electricity charges                4,495      3,684        1,197               845
     Administrative fees for transfer of leases      1,914      1,685          727             1,973
     Income from illuminated billboards                  444        —            —               225
     Ad hoc and other miscellaneous income           2,106      2,059        1,071             2,111
     Fair value gains of rental deposits                 281         1         310                    1

     Other gains — net                              11,154      8,072        3,662             5,385



  The GCCD Properties


     Other gains — net from the operations of the Fortune Plaza Units, the City Development
Plaza Units and the Victory Plaza Units comprised forfeitures of rental deposits pursuant to early
termination of leases in these Properties and accounting assessment of fair value gain in rental
deposits under HKFRS.


     Forfeited amounts comprised the surplus of deposits over rents receivable from departing
tenants. The following table sets out the income from forfeitures of rental deposits in each of the
Fortune Plaza Units, the City Development Plaza Units and the Victory Plaza Units for FY2003,
FY2004 and each of the six months ended 30 June 2004 and 30 June 2005:

                                                                                Six months ended
                                                                                       30 June

                                                                           (Unaudited)
                                                    FY2003      FY2004        2004             2005

                                                   (HK$’000)   (HK$’000)   (HK$’000)       (HK$’000)


     Fortune Plaza Units                                 —        155            7               —
     City Development Plaza Units                       383       562          98                44
     Victory Plaza Units                                 —        427         392                35

                                                        383     1,144         497                79




                                                  142
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

Direct outgoings


     The direct outgoings of the Properties consisted of charges in respect of (i) property
management fees; (ii) promotional and agency expenses; (iii) fitting out and maintenance
expenses; (iv) depreciation expenses; (v) business tax and flood prevention fee; (vi) bad debts;
and (vii) employment benefit expenses.


  Property management fees


     White Horse Units — As property management services were undertaken by White Horse
Property Management Company, property management fees are not reflected in the Audited
Financial Statements of the Properties.


     GCCD Properties — Property management fees included fees for management of vacant
units in the GCCD Properties paid to Yicheng. The tenants were liable for the property
management fees for the units they occupied.


      Starting from October 2004, Yicheng was also appointed to provide services for liaising with
marketing agents to secure tenants for such vacant units and providing tenancy services to
existing tenants in respect of City Development Units and Victory Plaza Units, for which it was paid
a fee equivalent to 7.0% of actual Rental Income collected.


  Promotional and agency expenses


     White Horse Units — Promotional and agency expenses for the White Horse Units consisted
of the expenses incurred in connection with advertisements for White Horse Building placed in
various media, including the print and broadcast media, and other promotional materials such as
brochures and flyers.


     GCCD Properties — Promotional expenses comprised expenses incurred in relation to the
promotion and marketing of Fortune Plaza, City Development Plaza and Victory Plaza, including
advertisements in the print media and, in the case of Victory Plaza, trade fairs held at the property.
Agency fees were paid to agents who successfully recommended tenants to take up space in the
GCCD Properties. These fees comprised either one-half month’s or one full month’s rent under the
new lease depending on the term of the lease, and was paid regardless of whether the agent was
a company within the GZI Group or an unrelated third party.


  Fitting out and maintenance expenses


     Fitting out and maintenance expenses comprised expenses for fitting out vacant units for new
tenants, where necessary, and the cost of parts replacement, as well as expenses incurred in
cleaning and repairing premises vacated by outgoing tenants and, if necessary, renovating vacant
premises in accordance with the requirements of incoming tenants.



                                                 143
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

  Depreciation expenses


     Depreciation expenses consisted of the depreciation of property, plant and equipment
calculated on a straight line basis over a period of five or ten years, depending on the nature of
the relevant asset.


  Business tax and flood prevention fee


     Business tax of 5.0% and flood prevention fee of 0.09% were levied on the Rental Income
and property management fees derived from the White Horse Units and on Rental Income derived
from each of the GCCD Properties. With respect to the White Horse Units, such taxes were paid
by each of White Horse JV, Xingcheng and White Horse Property Management Company.


  Bad debts


     Bad debts comprised defaulted payments of rent not covered by security deposits and
provisions for bad debts for overdue rent which was potentially non-recoverable. The amount of
bad debts for each of the Fortune Plaza Units and the City Development Plaza Units during the
relevant periods was insignificant (as a percentage of Gross Turnover generated by the relevant
Property). In the case of the Fortune Plaza Units, the ratio was 2.7% of Gross Turnover for the six
months ended 30 June 2005 (there were no bad debts in the other periods under discussion) and,
in the case of the City Development Plaza Units, the ratio was 1.3% of Gross Turnover for FY2003,
1.8% for FY2004, 1.0% for the six months ended 30 June 2004 and 0.5% for the six months ended
30 June 2005. Neither the White Horse Units nor the Victory Plaza Units incurred any bad debts
during the relevant periods.


  Employment benefit expenses


     Employment benefit expenses comprised, among other things, the salaries and bonuses of
the employees of White Horse JV, Xingcheng and White Horse Property Management Company
(which were subject to adjustment from time to time based on the performance of White Horse
Building), other benefits granted to such employees, contributions to certain employee provident
funds, housing supplements for such employees and staff welfare expenses. As Yicheng bore the
relevant staff related expenses in managing the Properties, these expenses are not reflected in the
Audited Financial Statements of the Properties. Other employment benefits expenses were
incurred at the central administration level of GCCD. Such costs have been allocated to the GCCD
Properties and are reflected below in other operating expenses. None of these employment benefit
expenses will be borne by GZI REIT going forward.




                                               144
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

  Miscellaneous expenses


  White Horse Units


     Miscellaneous expenses of the White Horse Properties included general administrative
expenses, consultancy fees paid to consultants such as building surveyors, insurance premiums
and other miscellaneous expenses as well as, in relation to every lease for the White Horse Units,
stamp duty of 0.1% of the aggregate contract sum of the lease but not including any further term
under any option to renew and, in relation to other contracts entered into by White Horse Property
Management Company, stamp duty of between 0.03% and 0.05% of the relevant contract value,
depending on the nature of the contract. In addition, an annual land use fee was paid to the
Ministry of Finance in the PRC based on a rate per square metre of Gross Floor Area as
determined annually by the Ministry of Finance. Approximately HK$79,000 in land use fees (based
on the White Horse Units’ Gross Floor Area of 50,199.3 sq. m.) were paid in each of FY2003 and
FY2004. GZI REIT will not pay such land use fees in the future as White Horse JV had paid a land
grant premium for the Property in June 2005. This land grant premium of approximately HK$53.0
million was capitalised and transferred to the BVI Companies.


     Cleaning and landscaping expenses, expenses relating to fire safety systems at White Horse
Building, security expenses and fuel costs relating to electricity generation were also included in
this category of expenses.


  The GCCD Properties


     Miscellaneous expenses for the GCCD Properties comprised insurance premiums paid for
comprehensive property insurance for the GCCD Properties whenever the relevant Property was
used as security for bank borrowings taken by the GZI Group, expenses for office supplies,
seasonal decorations at the relevant Properties and entertainment and travelling expenses
incurred in the promotion of Fortune Plaza and Victory Plaza (both newly completed developments
in 2003), as well as other miscellaneous or non-recurring expenses. Other operating expenses
also comprised, in relation to every lease for the Fortune Plaza Units, the City Development Plaza
Units or the Victory Plaza Units, stamp duty of 0.1% of the aggregate contract sum of the lease,
but not including any further term under any option to renew.


     Many of the miscellaneous expenses incurred by the White Horse Units were not incurred by
the GCCD Properties as such costs were incurred at the GCCD administrative level and by the
property managers of the GCCD Properties. Such costs have been allocated to the GCCD
Properties and are reflected below in other operating expenses.




                                               145
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

Other operating expenses


      Certain other operating expenses were incurred by the GZI Group (including GCCD) in
relation to the ownership and operation of its property portfolio as a whole (including the Fortune
Plaza Units, the City Development Plaza Units, the Victory Plaza Units and other properties that
will not form part of GZI REIT) and could not be allocated directly to any of these three Properties.
These expenses included, among other things, advertising and promotional expenses as well as
general and administrative expenses that could not be directly attributed to specific properties
within GZI’s portfolio.


      The Manager has allocated these other operating expenses to each of these Properties using
an allocation basis which the Manager considers to be reasonable. To this end, the staff costs of
the leasing department and property development department of GCCD were extracted from
GCCD’s income statements. All operating expenses, excluding the aforementioned staff costs,
were then allocated to the leasing department and property development department based on a
ratio calculated by dividing the staff costs of each department by the total staff costs of both
departments. All operating expenses allocated to the leasing department were further allocated to
the respective Properties based on a ratio calculated by dividing the carrying value of the relevant
Properties by the total carrying value of all investment properties managed by the leasing
department of GCCD for each of the relevant periods.


      Movements in these other operating expenses over the relevant periods were due to the
changes in the allocation basis described in the paragraph immediately above (including, but not
limited to, GCCD’s total expenses not directly attributable to the GCCD Properties, the carrying
value of the relevant Properties as well as the total carrying value of all investment properties
managed by the leasing department of GCCD) and not to changes to the manner in which the
Properties were operated or the actual costs of such operations.


      The movements in other operating expenses have been historically driven by the relative
movements in the carrying fair value of the Fortune Plaza Units, the City Development Units and
the Victory Plaza Units vis-a-vis all investment properties of GCCD as well as the relative ratio of
staff numbers between GCCD’s investment property division and property development division as
well as the overall movements in operating expenses at the GCCD level.


Finance costs


     Interest charges incurred at the central treasury of GCCD are not reflected in the Audited
Financial Statements of the Properties as there were no direct bank borrowings in respect of the
Fortune Plaza Units, the City Development Plaza Units and the Victory Plaza Units.


    There were no finance costs incurred for the White Horse Units over the two years and six
months ended 30 June 2005.



                                                146
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

     Fair value gain on investment properties

      According to the relevant accounting polices, investment properties are initially required to be
stated at cost and are restated at their fair value at each balance sheet date thereafter. Changes
in fair value were recognised in the income statements.

Income tax expenses

     Income tax expenses were reported to the relevant tax bureau on an entity basis by GCCD,
White Horse JV or Xingcheng, where applicable. As such, income tax expenses for the four
Properties were calculated based on the tax rate applicable to them as if they were collectively a
separate tax entity.

      PRC enterprise income taxation was provided for in respect of the profits of the Properties
in the PRC at 33.0% on assessable profit, in accordance with the Income Tax Law of the PRC for
Enterprises with Foreign Investment and Foreign Enterprises. The actual taxation on the
Properties’ profit before taxation, however, differed from the theoretical amount that would have
arisen using the enterprise income tax rate (33.0%) of the PRC due to some tax exempt income
and non-tax deductible expenses as shown below:

                                                                                      Six months ended 30 June

                                                                                      (Unaudited)
                                                          FY2003         FY2004          2004(1)           2005

                                                         (HK$’000)      (HK$’000)      (HK$’000)      (HK$’000)


     Profit before taxation                               344,464        132,859         62,755           681,058

     Tax calculated at PRC enterprise
       income tax rate of 33.0%                           113,673         43,843         20,709           224,749
     Income not subject to taxation                         (4,065)           (84)            —           (10,099)
     Expenses not deductible for taxation
       purpose                                                  —             514             —                —

     Income tax expenses                                  109,608         44,273         20,709           214,650




     Note:

     (1)     The figures for the six months ended 30 June 2004 have only been reviewed and not audited.


     Income not subject to taxation mainly relates to the portion of revaluation gain (business
taxes) not subject to taxation. Expenses not deductible for taxation purpose mainly relate to staff
costs (appropriation of staff welfare reserve) not deductible for taxation.

    The enterprise income tax rate will not be applicable for the BVI Companies going
forward. (See the sections headed “Manager’s Discussion and Analysis of Future
Operations” and “Profit Forecast” in this Offering Circular.)



                                                       147
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

Principal Accounting Policies


     For the principal accounting policies in relation to each of the Properties, please refer to the
Audited Financial Statements of the Properties set out in Appendix I to this Offering Circular.


      Following the transfer of the Properties to GZI REIT, the management structure and the cost
and capital structures of the Properties as well as the management philosophy and operational
processes of the Manager are expected to differ from those previously adopted with respect to the
Properties. These variations are expected to affect the future financial results of GZI REIT (see the
sections headed “Manager’s Discussion and Analysis of Future Operations” and “Profit Forecast”
in this Offering Circular).


Comparison of Results of Operations for the Six Months Ended 30 June 2005 with the Six
Months Ended 30 June 2004


  White Horse Units


     An extract of the income statement of the White Horse Units for each of the six months ended
30 June 2004 and 30 June 2005 is set out below:

                                                                                   Six months ended 30 June

                                                                                  (Unaudited)
                                                                                    2004(1)               2005

                                                                                   (HK$’000)         (HK$’000)


     Gross Turnover                                                                    48,112              65,916
     Other gains — net                                                                   3,662              5,385
     Direct outgoings of the Property                                                 (14,151)            (16,050)
       Promotional and agency expenses                                                    (505)              (383)
       Fitting out and maintenance expenses                                               (864)              (929)
       Depreciation expenses                                                              (688)               (611)
       Business tax and flood prevention fee                                            (3,368)             (4,833)
       Bad debts                                                                              —                  —
       Employment benefit expenses                                                      (6,199)             (7,153)
       Miscellaneous expenses                                                           (2,527)             (2,141)

     Operating Income                                                                  37,623              55,251




     Note:

     (1)     The figures for the six months ended 30 June 2004 have only been reviewed and not audited.




                                                       148
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

     Gross Turnover


      Gross Turnover increased by 37.0%, from HK$48.1 million for the six months ended 30 June
2004 to HK$65.9 million for the six months ended 30 June 2005 mainly due to a rental increase
for the majority leases in the White House Units subsequent to negotiation with the tenants in the
annual review. As a result of the expiration and termination of two head leases covering
approximately 11,000 sq.m., approximately 200 new leases had been contracted with the user
tenants during the third quarter of 2004 at starting rents which were approximately three times
higher than the previous leases. These new leases are set to expire 31 December 2005.


     Other gains — net — Other gains — net increased by 45.9%, from HK$3.7 million for the six
months ended 30 June 2004 to HK$5.4 million for the six months ended 30 June 2005. The growth
was mainly due to the increase in administrative fees for transfers of leases of HK$1.2 million from
125 leases transferred, which represented an increase of 63 leases compared to the six months
ended 30 June 2004. It is considered that the variations in the number of leases transferred is ad
hoc by nature and may not correspond to any particular reason.


     Direct outgoings of the White Horse Units


     Direct outgoings of the White Horse Units increased by 13.4%, from HK$14.2 million for the
six months ended 30 June 2004 to HK$16.1 million for the six months ended 30 June 2005. The
movement was mainly attributable to the increase in staff costs as well as business tax and flood
prevention fee.


     Promotional and agency expenses — Such expenses fell by 20.0%, from HK$0.5 million for
the six months ended 30 June 2004 to HK$0.4 million for the six months ended 30 June 2005.
Lower promotional expenses were incurred in the six months ended 30 June 2005 as White Horse
Property Management Company focused on renewing the tenancy agreements of existing tenants
instead of seeking new tenants.


     Fitting out and maintenance expenses — Fitting out and maintenance expenses remained
stable at approximately HK$0.9 million for both six months ended 30 June 2004 and 2005.


      Depreciation expenses — Depreciation expenses decreased by 14.3%, from HK$0.7 million
for the six months ended 30 June 2004 to HK$0.6 million for the six months ended 30 June 2005
because certain assets were fully depreciated in FY2004.


     Business tax and flood prevention fee — Business tax and flood prevention fee increased by
41.2%, from HK$3.4 million for the six months ended 30 June 2004 to HK$4.8 million for the six
months ended 30 June 2005, in line with the growth in Gross Turnover and property management
fees derived from the White Horse Units.




                                                149
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

    Bad debts — There were no bad debts in the six months ended 30 June 2004 and the six
months ended 30 June 2005.


      Employment benefit expenses — Employment benefit expenses rose by 16.1%, from HK$6.2
million for the six months ended 30 June 2004 to HK$7.2 million for the six months ended 30 June
2005 because of a higher headcount (from approximately 120 in the six months ended 30 June
2004 to approximately 130 in the six months ended 30 June 2005) and also because salaries and
bonuses were adjusted upwards in the six months ended 30 June 2005 to reward employees for
the improved performance of the White Horse Units.


      Miscellaneous expenses — Miscellaneous expenses decreased by 16.0%, from HK$2.5
million for the six months ended 30 June 2004 to HK$2.1 million for the six months ended 30 June
2005. This decrease was primarily due to a fall in expenses for office supplies and lower fuel costs
relating to electricity generation (of HK$0.4 million). The decrease was offset in part by an increase
in cleaning and landscaping expenses in the six months ended 30 June 2005 necessitated by dust
and dirt from public works along a road outside White Horse Buildings, as well as higher
expenditures in the six months ended 30 June 2005 to improve the fire safety and security systems
in the building.


     Operating Income


     As a result of the foregoing factors, Operating Income increased by HK$17.7 million, or
47.1%, from HK$37.6 million for the six months ended 30 June 2004 to HK$55.3 million for the six
months ended 30 June 2005. The Operating Income margin improved from 78.2% for the six
months ended 30 June 2004 to 83.8% for the six months ended 30 June 2005.


     Fair value gain on investment properties


     The revaluation of the White Horse Units as at 30 June 2005 resulted in an increase in fair
value of HK$455.7 million. The significant increase in fair value was based on the fact that the
majority of the tenancy agreements expiring on 31 December 2005 were renewed at much higher
rental rates. There was no revaluation of the White Horse Units for six months ended 30 June
2004.




                                                 150
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

  Fortune Plaza Units


    An extract of the income statement of the Fortune Plaza Units for each of the six months
ended 30 June 2004 and 30 June 2005 is set out below:

                                                                                   Six months ended 30 June

                                                                                  (Unaudited)
                                                                                    2004(1)               2005

                                                                                   (HK$’000)         (HK$’000)


     Gross Turnover                                                                     1,917              13,334
     Other gains — net                                                                        35                 127
     Direct outgoings of the Property                                                  (1,923)             (4,546)
        Property management fees                                                       (1,301)             (1,200)
        Promotional and agency expenses                                                  (457)             (2,071)
        Fitting out and maintenance expenses                                               (65)                  (73)
        Business tax and flood prevention fee                                              (98)              (679)
        Bad debts                                                                             —              (355)
        Miscellaneous expenses                                                                (2)            (168)
     Other operating expenses                                                            (377)             (1,026)

     Operating Income                                                                    (348)              7,889




     Note:

     (1)     The figures for the six months ended 30 June 2004 have only been reviewed and not audited.


     Gross Turnover — Gross Turnover increased by approximately 600.0%, from HK$1.9 million
for the six months ended 30 June 2004 to HK$13.3 million for the six months ended 30 June 2005,
reflecting the continuous increase in the occupancy rates of the Fortune Plaza Units since the
completion of Fortune Plaza, from 9.5% for the six months ended 30 June 2004 to 60.0% for the
six months ended 30 June 2005.


    Other gains — net — Such other gains of approximately HK$35,000 were recorded for the six
months ended 30 June 2004, as compared to HK$0.1 million for the six months ended 30 June
2005.


     Direct outgoings


     Direct outgoings of the Fortune Plaza Units increased by 136.8%, from HK$1.9 million for the
six months ended 30 June 2004 to HK$4.5 million for the six months ended 30 June 2005.




                                                       151
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

      Property management fees — Property management fees decreased by 7.7%, from HK$1.3
million for the six months ended 30 June 2004 to HK$1.2 million for the six months ended 30 June
2005.


      Promotional and agency expenses — Promotional and agency expenses increased by
approximately 320.0%, from HK$0.5 million for the six months ended 30 June 2004 to HK$2.1
million for the six months ended 30 June 2005. The higher spending on promotional and agency
expenses resulted from the higher promotional expenses expended to improve occupancy rates
in the latter period as compared to the earlier period.


     Fitting out and maintenance expenses — Fitting out and maintenance expenses were
negligible in each of the six months ended 30 June 2004 (approximately HK$65,000) and 30 June
2005 (approximately HK$73,000) as Fortune Plaza was constructed only in 2003.


     Business tax and flood prevention fee — Business tax and flood prevention fee in aggregate
represented 5.09% of the Gross Turnover of the Fortune Plaza Units.


     Bad debts — No bad debts were incurred for the six months ended 30 June 2004 but bad
debts of approximately HK$355,000 arose for the six months ended 30 June 2005 as a result of
a provision for potentially non-recoverable overdue rent from one tenant. The lease agreement
with this tenant was terminated in September 2005.


     Miscellaneous expenses — Miscellaneous expenses increased from approximately
HK$2,000 for the six months ended 30 June 2004 to HK$0.2 million over for the six months ended
30 June 2005.


     Operating Income


      As a result of the foregoing factors and other operating expenses which were not directly
attributable to the Fortune Plaza Units, Operating Income improved significantly from a loss of
HK$0.3 million for the six months ended 30 June 2004 to a profit of HK$7.9 million for the six
months ended 30 June 2005.


     Fair value gain on investment properties


     The revaluation of the Fortune Plaza Units as at 30 June 2005 resulted in an increase in fair
value of HK$143.9 million to reflect the prevailing market conditions. There was no revaluation of
the Fortune Plaza Units for the six months ended 30 June 2004.




                                                152
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

  City Development Plaza Units


    An extract of the income statement of the City Development Plaza Units for each of the six
months ended 30 June 2004 and 30 June 2005 is set out below:

                                                                                   Six months ended 30 June

                                                                                  (Unaudited)
                                                                                    2004(1)               2005

                                                                                   (HK$’000)         (HK$’000)


     Gross Turnover                                                                    17,084              17,499
     Other gains — net                                                                    203                    163
     Direct outgoings of the Property                                                  (1,773)             (2,787)
       Property management fees                                                          (192)             (1,454)
       Promotional and agency expenses                                                   (239)               (213)
       Fitting out and maintenance expenses                                                (77)                   —
       Business tax and flood prevention fee                                             (870)               (891)
       Bad debts                                                                         (167)                   (88)
       Miscellaneous Expenses                                                            (228)               (141)
     Other operating expenses                                                            (389)               (748)

     Operating Income                                                                  15,125              14,127




     Note:

     (1)     The figures for the six months ended 30 June 2004 have only been reviewed and not audited.


     Gross Turnover — Gross Turnover increased by 2.3%, from HK$17.1 million for the six
months ended 30 June 2004 to HK$17.5 million for the six months ended 30 June 2005.


     Other gains — net — Such other gains remained constant at HK$0.2 million for each of the
six months ended 30 June 2004 and 30 June 2005.


     Direct outgoings


     Direct outgoings of the City Development Plaza Units increased by 55.6% from HK$1.8
million for the six months ended 30 June 2004 to HK$2.8 million for the six months ended 30 June
2005.




                                                       153
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

     Property management fees — Property management fees increased by approximately 6.8
times, from HK$192,000 for the six months ended 30 June 2004 to HK$1.5 million for the six
months ended 30 June 2005. The main reason for the increase was the appointment of Yicheng
in October 2004 to provide services in liaising with marketing agents to secure tenants for vacant
units and providing tenancy services to existing tenants, for which Yicheng was paid a liaison fee
equivalent to 7.0% of actual Rental Income collected.


    Promotional and agency expenses — Consistent with the stable occupancy rates of the City
Development Plaza Units during the relevant periods, promotional and agency expenses remained
relatively stable at approximately HK$239,000 for the six months ended 30 June 2004 and
approximately HK$213,000 for the six months ended 30 June 2005.


     Fitting out and maintenance expenses — Approximately HK$77,000 was spent on fitting out
and maintenance for the six months ended 30 June 2004 while no such expenditures were
incurred for the six months ended 30 June 2005. Such expenditures have been relatively low for
the City Development Plaza Units because the Property has been well maintained over the years.


     Business tax and flood prevention fee — Business tax and flood prevention fee in aggregate
represented 5.09% of the Gross Turnover of the City Development Plaza Units.


    Bad debts — Bad debts fell by 47.3%, from approximately HK$167,000 for the six months
ended 30 June 2004 to approximately HK$88,000 for the six months ended 30 June 2005. These
amounts represented 1.0% and 0.5% of Gross Turnover for the respective periods.


     Miscellaneous expenses — Miscellaneous expenses were relatively low at HK$0.2 million for
the six months ended 30 June 2004 and HK$0.1 million for the six months ended 30 June 2005.


     Operating Income


     As a result of the foregoing factors and other operating expenses which were not directly
attributable to the City Development Plaza Units, Operating Income decreased by 6.6%, from
HK$15.1 million for the six months ended 30 June 2004 to HK$14.1 million for the six months
ended 30 June 2005. The margin of Operating Income fell from 88.5% for the six months ended
30 June 2004 to 80.7% for the six months ended 30 June 2005.


     Fair value gain on investment properties


     The revaluation of the City Development Plaza Units as at 30 June 2005 resulted in an
increase in fair value of HK$12.4 million. There was no revaluation of the City Development Plaza
Units for six months ended 30 June 2004.




                                                154
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

  Victory Plaza Units


    An extract of the income statement of the Victory Plaza Units for each of the six months
ended 30 June 2004 and 30 June 2005 is set out below:

                                                                                   Six months ended 30 June

                                                                                  (Unaudited)
                                                                                    2004(1)               2005

                                                                                   (HK$’000)         (HK$’000)


     Gross Turnover                                                                    12,497              12,846
     Other gains — net                                                                    506                    188
     Direct outgoings of the Property                                                  (1,919)             (3,664)
       Property management fees                                                          (321)               (943)
       Promotional and agency expenses                                                   (786)               (769)
       Fitting out and maintenance expenses                                                (71)              (202)
       Business tax and flood prevention fee                                             (636)               (654)
       Bad debts                                                                              —                   —
       Miscellaneous expenses                                                            (105)             (1,096)
     Other operating expenses                                                            (729)               (672)

     Operating Income                                                                  10,355               8,698




     Note:

     (1)     The figures for the six months ended 30 June 2004 have only been reviewed and not audited.


     Gross Turnover — Gross Turnover increased by 2.4%, from HK$12.5 million for the six
months ended 30 June 2004 to HK$12.8 million for the six months ended 30 June 2005.


    Other gains — net — Such other gains fell from HK$0.5 million for the six months ended 30
June 2004 to HK$0.2 million for the six months ended 30 June 2005 as the tenant turnover rate,
and hence forfeiture of rental deposits, in the Victory Plaza Units fell as Victory Plaza became
more established.


     Direct outgoings


     Direct outgoings of the Victory Plaza Units increased by 94.7%, from HK$1.9 million for the
six months ended 30 June 2004 to HK$3.7 million for the six months ended 30 June 2005.




                                                       155
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

      Property management fees — Property management fees increased by 200.0%, from HK$0.3
million for the six months ended 30 June 2004 to HK$0.9 million for the six months ended 30 June
2005. The main reason for the increase was the appointment of Yicheng in October 2004 to liaise
with marketing agents to secure tenants for vacant units and to provide tenancy services to
existing tenants in the Victory Plaza Units.


    Promotional and agency expenses — Promotional and agency expenses remained at
approximately HK$0.8 million for both the six months ended 30 June 2004 and 30 June 2005.


    Fitting out and maintenance expenses — Fitting out and maintenance expenses increased by
approximately 181.7%, from approximately HK$71,000 for the six months ended 30 June 2004 to
HK$0.2 million for the six months ended 30 June 2005 due to the fitting out expenses incurred in
preparation for Guangzhou GOME Electrical Appliances Co. Ltd.’s occupancy of basement 1 of the
Property.


     Business tax and flood prevention fee — Business tax and flood prevention fee in aggregate
represented 5.09% of the Gross Turnover of the Victory Plaza Units.


    Bad debts — No bad debts were incurred for the six months ended 30 June 2004 and the six
months ended 30 June 2005.


     Miscellaneous expenses — Miscellaneous expenses increased by approximately 10 times,
from HK$0.1 million for the six months ended 30 June 2004 to HK$1.1 million for the six months
ended 30 June 2005 due to compensation paid to the existing tenant in basement 1 of the Victory
Plaza podium for early termination of its leases so that Guangzhou Gome Electrical Appliances
Co. Ltd. could lease that space as a new tenant.


     Operating Income


     As a result of the foregoing factors and other operating expenses which were not directly
attributable to the Victory Plaza Units, Operating Income declined from HK$10.4 million for the six
months ended 30 June 2004 to HK$8.7 million for the six months ended 30 June 2005.


     Fair value gain on investment properties


    There were no revaluation gains or losses for the Victory Plaza Units for either of the six
months ended 30 June 2004 or 30 June 2005.




                                                156
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

Comparison of Results of Operations for FY2004 with FY2003


  White Horse Units


     An extract of the income statement of the White Horse Units for each of FY2003 and FY2004
is set out below:

                                                                      FY2003          FY2004

                                                                     (HK$’000)       (HK$’000)


     Gross Turnover                                                      89,754        104,737
     Other gains — net                                                   11,154          8,072
     Direct outgoings of the Property                                   (31,796)       (35,309)
       Promotional and agency expenses                                   (1,997)          (644)
       Fitting out and maintenance expenses                              (1,458)         (1,543)
       Depreciation expenses                                             (1,664)         (1,285)
       Business tax and flood prevention fee                             (6,615)         (7,287)
       Bad debts                                                               —               —
       Employment benefit expenses                                      (14,757)       (17,488)
       Miscellaneous expenses                                            (5,305)         (7,062)

     Operating Income                                                    69,112         77,500



    Gross Turnover — Gross Turnover increased by 16.6%, from HK$89.8 million in FY2003 to
HK$104.7 million in FY2004. This increase was mainly due to a rental increment in the majority of
leases in the White Horse Units subsequent to negotiation with the tenants in the annual review.
Another reason for the rise was due to an increase in the Property’s Gross Rentable Area by
approximately 2,030 sq.m. in FY2004 which was attributable to the improved efficiency after
reformatting the floor space. As a result of terminating two head-leases covering approximately
11,000 sq.m., approximately 200 new leases had been contracted with the user tenants around the
third quarter of 2004 at starting rents which were approximately three times higher than the
previous leases. These new leases will expire on 31 December 2005.


     Other gains — net — Such other gains decreased by 27.7%, from HK$11.2 million in FY2003
to HK$8.1 million in FY2004, mainly due to decreases in consultancy fees, labour charges and
administrative fees for transfers of leases (from 163 transfers in FY2003 to 143 transfers in
FY2004).


     Direct outgoings


    Direct outgoings of the White Horse Units increased by 11.0%, from HK$31.8 million in
FY2003 to HK$35.3 million in FY2004.



                                               157
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

      Promotional and agency expenses — Promotional expenses fell by 70.0%, from HK$2.0
million in FY2003 to HK$0.6 million in FY2004. The significant decrease resulted because an
advertising campaign on national television which was undertaken in FY2003 was not repeated in
FY2004.


     Fitting out and maintenance expenses — Fitting out and maintenance expenses remained
stable at HK$1.5 million in both FY2003 and FY2004.


     Depreciation expenses — Charges for depreciation decreased by 23.5%, from HK$1.7 million
for FY2003 to HK$1.3 million for FY2004 as certain assets were fully depreciated in FY2003.


    Business tax and flood prevention fee — Business tax and flood prevention fee increased by
10.6%, from HK$6.6 million for FY2003 to HK$7.3 million for FY2004, in line with the growth in
Gross Turnover derived from the White Horse Units.


     Bad debts — No bad debts were incurred in FY2003 or FY2004.


     Employment benefit expenses — Employment benefit expenses rose by 18.2%, from
HK$14.8 million in FY2003 to HK$17.5 million in FY2004. This increase was mainly due to a
provision for a staff welfare reserve of approximately HK$1.5 million, which was not an annual
recurring item. There was also a higher headcount in FY2004 and salaries and bonuses were
adjusted upwards in that year to reward employees for the improved performance of the White
Horse Units.


     Miscellaneous expenses — Miscellaneous expenses increased by 34.0%, from HK$5.3
million in FY2003 to HK$7.1 million in FY2004. The growth was due to increases of HK$1.0 million
of expenses incurred as a result of organising some events for tenants at White House Building.
In addition, cleaning and landscaping costs and fuel costs increased by approximately HK$0.3
million and HK$0.4 million respectively.


     Operating Income


     As a result of the foregoing factors, Operating Income increased by 12.1%, from HK$69.1
million in FY2003 to HK$77.5 million in FY2004. The margin of Operating Income was maintained
at 77.0% and 74.0% in FY2003 and FY 2004 respectively.


     Fair value gain on investment properties


      The revaluation of the White Horse Units as at 31 December 2004 resulted in an increase in
fair value of HK$53.7 million, compared to a decrease in fair value of HK$3.2 million for FY2003,
reflecting the then prevailing market conditions.



                                                158
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

  Fortune Plaza Units

    An extract of the income statement of the Fortune Plaza Units for each of FY2003 and
FY2004 is set out below:

                                                                      FY2003          FY2004

                                                                     (HK$’000)       (HK$’000)


     Gross Turnover                                                         150          9,042
     Other gains — net                                                         10          255
     Direct outgoings of the Property                                    (1,205)         (6,623)
       Property management fees                                            (188)         (3,046)
       Promotional and agency expenses                                     (775)         (2,972)
       Fitting out and maintenance expenses                                    —           (135)
       Business tax and flood prevention fee                                   (8)        (460)
       Bad debts                                                               —               —
       Miscellaneous expenses                                              (234)            (10)
     Other operating expenses                                              (608)          (705)

     Operating Income                                                    (1,653)         1,969



      Gross Turnover — Gross Turnover increased from HK$0.2 million in FY2003 to HK$9.0
million in FY2004. Gross Turnover in respect of the Fortune Plaza Units was only received from
November 2003 onwards as Fortune Plaza was newly completed in FY2003. Gross Turnover
improved in FY2004 when the Fortune Plaza Units achieved an average occupancy rate of 21.0%.

    Other gains — net — Such other gains rose from approximately HK$10,000 in FY2003 to
HK$0.3 million in FY2004.

     Direct outgoings

    Direct outgoings of the Fortune Plaza Units increased by 450.0%, from HK$1.2 million in
FY2003 to HK$6.6 million in FY2004 as Gross Turnover was only received from November 2003
onwards.

      Property management fees — Property management fees increased by approximately 14
times, from HK$0.2 million in FY2003 to HK$3.0 million in FY2004. The growth in property
management fees was due to the fact that Fortune Plaza only came into operation in the second
half of 2003, and thus no such fees were incurred for the first half of FY2003. Another cause for
the increase was the fact that prior to September 2004, due to the low occupancy rates of the
Fortune Plaza Units in the initial operating period of Fortune Plaza after construction was
completed, Yicheng agreed to levy its fees on a cost plus basis with a low margin. From September
2004 onwards, however, such fees were charged in full in respect of unoccupied premises within
the Fortune Plaza Units based on a rate of HK$12.50 per sq.m. per month for units in the office
tower block and HK$17.50 per sq.m. per month for units in the retail podium.



                                               159
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

     Promotional and agency expenses — Promotional and agency expenses increased by
approximately 275.0%, from HK$0.8 million in FY2003 to HK$3.0 million in FY2004. The increase
resulted from the fact that a large portion of the Fortune Plaza Units was originally earmarked for
sale in FY2003 and only in FY2004 was the decision made to include those portions in the initial
portfolio of GZI REIT. The decision to retain those units necessitated considerably greater
amounts of advertising to secure tenants for the Fortune Plaza Units. Also, no agency fees were
paid in FY2003, while agency fees of HK$0.7 million were paid in FY2004.


     Fitting out and maintenance expenses — As Fortune Plaza was only completed in FY2003,
there were no fitting out and maintenance expenses incurred that year, while a minor amount of
approximately HK$135,000 was incurred for such expenses in FY2004.


     Business tax and flood prevention fee — Business tax and flood prevention fee in aggregate
represented 5.09% of the Gross Turnover of the Fortune Plaza Units.


     Bad debts — There were no bad debts in FY2003 and FY2004.


     Other expenses — Other expenses of approximately HK$234,000 were incurred in FY2003,
mainly for seasonal decorations, while only approximately HK$10,000 was incurred for such
expenses in FY2004.


     Operating Income


      As a result of the foregoing factors and other operating expenses which were not directly
attributable to Fortune Plaza Units, Operating Income improved from a loss of HK$1.7 million in
FY2003 to a profit of HK$2.0 million in FY 2004.


     Fair value gain on investment properties


      The revaluation of the Fortune Plaza Units as at 31 December 2004 resulted in an increase
in fair value of HK$8.4 million, compared to an increase in fair value of HK$205.9 million for
FY2003, reflecting the then prevailing market conditions.




                                                160
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

  City Development Plaza Units


    An extract of the income statement of the City Development Plaza Units for each of FY2003
and FY2004 is set out below:

                                                                      FY2003         FY2004

                                                                     (HK$’000)      (HK$’000)


     Gross Turnover                                                     31,911         33,904
     Other gains — net                                                     476            648
     Direct outgoings of the Property                                    (3,194)        (4,187)
       Property management fees                                           (563)          (991)
       Promotional and agency expenses                                    (358)          (417)
       Fitting out and maintenance expenses                                 (15)           (77)
       Business tax and flood prevention fee                             (1,624)        (1,726)
       Bad debts                                                          (430)           (611)
       Miscellaneous expenses                                             (204)          (365)
     Other operating expenses                                            (1,065)         (730)

     Operating Income                                                   28,128         29,635



     Gross Turnover — Gross Turnover increased by 6.3%, from HK$31.9 million in FY2003 to
HK$33.9 million in FY2004, largely due to the increased occupancy rates of the City Development
Plaza Units from 83.6% in FY2003 to 89.4% in FY2004.


     Other gains — net — Such other gains increased by 20.0%, from HK$0.5 million in FY2003
to HK$0.6 million in FY2004 as a greater number of leases which were terminated early in FY2004.


     Direct outgoings


      Direct outgoings of the City Development Plaza Units increased by 31.3% from HK$3.2
million in FY2003 to HK$4.2 million in FY2004.


      Property management fees — Property management fees rose by 66.7%, from HK$0.6
million in FY2003 to HK$1.0 million in FY2004. The main reason for the increase was the
appointment of Yicheng in October 2004 to provide services for liaising with marketing agents to
secure tenants for vacant units and to provide tenancy services to existing tenants.




                                               161
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

    Promotional and agency expenses — Promotional and agency expenses remained stable at
HK$0.4 million in both FY2004 and FY2005 as City Development Plaza was already a mature
development with stable occupancy rates, and hence did not require extensive promotion.


     Fitting out and maintenance expenses — Fitting out and maintenance expenses increased
from approximately HK$15,000 in FY2003 to approximately HK$77,000 in FY2004.


     Business tax and flood prevention fee — Business tax and flood prevention fee in aggregate
represented 5.09% of the Gross Turnover of the City Development Plaza Units.


    Bad debts — Bad debts increased by 42.1%, from approximately HK$430,000 in FY2003 to
approximately HK$611,000 in FY2004. These amounts represented 1.3% and 1.8% of the Gross
Turnover for the respective periods.


     Miscellaneous expenses — Miscellaneous expenses rose by approximately 100.0%, from
HK$0.2 million in FY2003 to HK$0.4 million in FY2004. The main reason for this significant
increase was the fact that New Year and Christmas celebrations were organised in FY2004
whereas neither occasion was celebrated in FY2003.


     Operating Income


     As a result of the foregoing factors and other operating expenses which were not directly
attributable to the City Development Plaza Units, Operating Income increased by 5.4%, from
HK$28.1 million in FY2003 to HK$29.6 million in FY2004. The margins of Operating Income fell
from 88.1% in FY2003 to 87.4% in FY2004.


     Fair value gain on investment properties


     The revaluation of the City Development Plaza Units as at 31 December 2004 resulted in a
decrease in fair value of HK$119.6 million mainly due to a decrease in estimated Rental Income
from the podium area, including the atrium for exhibition. Previously, the valuer projected sizeable
income to be generated from the atrium which did not materialise in 2004.




                                                162
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

  Victory Plaza Units


     An extract of the income statement of the Victory Plaza Units for each of FY2003 and FY2004
is set out below:

                                                                         FY2003          FY2004

                                                                        (HK$’000)       (HK$’000)


     Gross Turnover                                                         7,580          24,397
     Other gains — net                                                            91          506
     Direct outgoings of the Property                                       (3,881)         (4,891)
       Property management fees                                              (470)          (1,663)
       Promotional and agency expenses                                      (2,365)         (1,127)
       Fitting out and maintenance expenses                                       (1)        (361)
       Business tax and flood prevention fee                                 (386)          (1,242)
       Bad debts                                                                  —               —
       Miscellaneous expenses                                                (659)           (498)
     Other operating expenses                                               (1,254)         (1,364)

     Operating Income                                                       2,536          18,648



     Gross Turnover — Gross Turnover increased by 221.1%, from HK$7.6 million in FY2003 to
HK$24.4 million in FY2004. Gross Turnover in respect of the Victory Plaza Units was only received
from October 2003 onwards as the Victory Plaza podium was newly completed in FY2003. Gross
Turnover improved in FY2004 as the Victory Plaza Units achieved an average occupancy rate of
81.8% in that year.


      Other gains — net — Such other gains rose from approximately HK$91,000 in FY2003 to
HK$0.5 million in FY2004, mainly due to the forfeiture of rental deposits of approximately HK$0.4
million in FY2004 whereas no such income was recorded in FY2003.


     Direct outgoings


    Direct outgoings of the Victory Plaza Units increased by 25.6%, from HK$3.9 million in
FY2003 to HK$4.9 million in FY2004.


      Property management fees — Property management fees increased by 240.0%, from HK$0.5
million in FY2003 to HK$1.7 million in FY2004. The increase in fees for management of vacant
units and liaising with marketing agents resulted because the Victory Plaza podium only came into
operation in the second half of 2003, which meant that no such fees were incurred for the first half
of FY2003. The appointment of Yicheng in October 2004 to liaise with marketing agents and to
provide tenancy services also contributed to the increase in these expenses. Yicheng was paid a
fee equivalent to 7.0% of actual Rental Income collected.



                                                163
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

     Promotional and agency expenses — Promotional and agency expenses fell by 54.2%, from
HK$2.4 million in FY2003 to HK$1.1 million in FY2004 as the occupancy rate of the Victory Plaza
Units improved in FY2004, thus necessitating lower spending on such expenses.


      Fitting out and maintenance expenses — Expenditures for routine repair and maintenance in
FY2003 totalled only approximately HK$1,000 as the Victory Plaza podium was newly completed
that year while HK$0.4 million was incurred in FY2004. The increase in FY2004 resulted primarily
from the conversion of basement 1 of the Victory Plaza podium, which had previously
accommodated a supermarket, for use by Guangzhou Gome Electrical Appliances Co. Ltd., a
retailer of electronic and electrical equipment. The increase was also due in part to the renovation
in FY2004 of the 4th storey of the Victory Plaza podium, which had previously been set up as a
specialty location for retailers of telecommunications equipment, to make it more suitable for
general use.


     Business tax and flood prevention fee — Business tax and flood prevention fee in aggregate
represented 5.09% of the Gross Turnover of the Victory Plaza Units.


     Bad debts — There were no bad debts in FY2003 or FY2004.


     Miscellaneous expenses — Miscellaneous expenses fell by 28.6%, from HK$0.7 million in
FY2003 to HK$0.5 million in FY2004, largely because greater expenses were incurred in FY2003
on a series of celebrations and other events organised to mark the opening of the Victory Plaza
podium.


     Operating Income


     As a result of the foregoing factors and other operating expenses which were not directly
attributable to Victory Plaza Units, Operating Income increased by approximately 644.0%, from
HK$2.5 million in FY2003 to HK$18.6 million in FY2004.


     Fair value gain on investment properties


     The revaluation of the Victory Plaza Units as at 31 December 2004 resulted in an increase
in fair value of HK$62.6 million, compared to an increase in fair value of HK$70.7 million for
FY2003, reflecting the then prevailing market conditions.




                                                164
      MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATIONS

Liquidity and Capital Resources


      The treasury and cash disbursement functions of the GCCD Properties were centrally
administered by GCCD. As such, cash and cash equivalents, bank loans and payables were dealt
with in the current account with subsidiaries of GZI as shown in the Audited Financial Statements
of the Properties set out in the Appendix I to this Offering Circular.


     The principal sources of funding for the original development as well as the subsequent
expansions and renovations of the White Horse Units have historically been internally generated
funds.


Capital Expenditures


      White Horse Building underwent major addition and alteration works on two occasions, once
between 1995 and 1997 and again between 1998 and 2000. Between 1995 and 1997, the open
courtyard of the building was converted into an events hall used to accommodate a food court and
to stage fashion events. In 2000, the north and west wings of the building were extended outwards
between the 3rd and 7th storeys, and a further two storeys were added to the building to form the
8th and 9th storeys. The two addition and alteration projects added another 15,250 sq.m. to the
building’s Gross Floor Area.


       There were no material capital expenditures incurred by the GCCD Properties during the
relevant periods.


       Capital expenditures incurred by the Properties for FY2003 and FY2004 as well as for each
of the six months ended 30 June 2004 and 30 June 2005, which comprise additions of fixed assets,
land use right and investment properties, are set forth in the following table:


                                                                            Six months ended 30 June

                 FY2003                      FY2004                       2004                        2005

              (HK$ million)               (HK$ million)               (HK$ million)               (HK$ million)
                        (1)
                256.2                            3.1                       0.2                       59.6 (2)



Notes:

(1)    This amount was mainly attributable to the construction costs of Fortune Plaza and Victory Plaza amounting to
       HK$247.7 million.

(2)    Of this amount, approximately HK$53.0 million was payment of land grant premium and the relevant deed tax (3.0%)
       for the White Horse Units in June 2005.




                                                          165
   MANAGER’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS

INDEBTEDNESS


Borrowings


     As at 30 June 2005, the Properties had no outstanding borrowings.


Contingent liabilities


     As at 30 June 2005, the Properties had no significant contingent liabilities.


Capital commitments


     As at 30 June 2005, the Properties had no significant capital commitments.


Collateral


     As at 30 June 2005, certain of the Properties with an aggregate carrying value of
approximately HK$887,245,000 were pledged for bank loans obtained by a subsidiary of GZI. The
pledge was subsequently released as a result of partial repayment of the bank loans and
substitution thereof by other assets.


NO MATERIAL ADVERSE CHANGE


    Save as disclosed in this Offering Circular, the Directors confirm that there has been no
material adverse change in the financial or trading position of the Properties since 30 June 2005
and of the BVI Companies since 31 October 2005, the respective dates to which the Audited
Financial Statements of the Properties and the Audited Financial Statements of the BVI
Companies were made up.




                                               166
   MANAGER’S DISCUSSION AND ANALYSIS OF FUTURE OPERATIONS


      The following discussion has been prepared to assist investors’ evaluation of the
 Properties and the factors which may affect its future financial results. Such statements are
 subject to uncertainties and assumptions, and under no circumstances should the inclusion of
 such information herein be regarded as a representation, warranty or prediction with respect to
 the accuracy of the underlying assumptions by GZI Group, the Manager, GZI REIT, the Trustee,
 the Listing Agent, the Underwriters or any other person. Investors are cautioned not to place
 undue reliance on these forward-looking statements that speak only as of the date hereof.


Background


     The Audited Financial Statements of the Properties and the Audited Financial Statements of
the BVI Companies and other historical financial information have been prepared by the Manager
based on the historical operations of the Properties. Following transfer of the Properties to GZI
REIT, the management structure and the cost and capital structure of the Properties are expected
to differ from those previously adopted with respect to the Properties. These variations are
discussed below.


  Total Gross Income


    Total Gross Income in relation to the operation of the Properties in future shall comprise (i)
Rental Income and (ii) other income.


     Rental income


     Rental Income comprises a combination of committed rentals and rentals from renewals and
new lettings. In connection with the White Horse Units, no property management fee income will
be included as White Horse Property Management Company does not form part of GZI REIT. For
the new tenancies commencing 1 January 2006, separate tenancy and property management
agreements have been signed between the tenants, GZI REIT and White Horse Property
Management Company respectively. Therefore, property management fee income to be earned by
White Horse Property Management Company will not form part of the income of GZI REIT. For the
Forecast Period 2005, GZI REIT’s Rental Income from the White Horse Units will be derived via
an adjustment to the consideration payable by Holdco under the Reorganisation Deed (see the
section headed “Material Agreements and Other Documents Relating to GZI REIT —
Reorganisation Deed — Adjustments” in this Offering Circular). Under the current leases for the
White Horse Units, rent and property management fees are paid in an undivided amount by the
tenants in the White Horse Units to White Horse Property Management Company. The majority of
these leases will expire on 31 December 2005. The said adjustment will be an amount retained by
GZI REIT from the proceeds of the Global Offering, representing the Rental Income from the
current leases in the White Horse Units for the Forecast Period 2005.




                                               167
   MANAGER’S DISCUSSION AND ANALYSIS OF FUTURE OPERATIONS

     Other income

      For Forecast Period 2005 and Forecast Year 2006, the Manager assumes that other income
will comprise only of income generated by advertising fees from the White Horse Units indoor
illuminated billboards. Beyond Forecast Year 2006, other income in relation to the Properties may
include, but not limited to, administrative fees for transfers of leases and forfeiture of rental
income. The Manager does not anticipate to earn any surplus from electricity charges in the future.

  Property operating expenses

     Property operating expenses shall comprise (i) the Leasing Agents’ fees; (ii) property-related
taxes and duties; and (iii) other property expenses.

     Leasing Agents’ fees

      For the services of leasing, marketing and tenancy management, Yicheng and White Horse
Property Management Company have entered into the Tenancy Services Agreements with the
Manager and the BVI Companies under which Yicheng is entitled to fee income of 4.0% per annum
of the gross revenue of the Fortune Plaza Units, the City Development Plaza Units and the Victory
Plaza Units while the White Horse Property Management Company is entitled to a fee of 3.0% per
annum of the gross revenue of the White Horse Units. Yicheng and White Horse Property
Management Company have agreed that such fees shall also satisfy the property management
fees which they are entitled to receive from the relevant BVI Companies for any vacant units. The
Leasing Agents are expected to bear all promotional and agency expenses incurred in relation to
the promotion and marketing of the Properties including advertisements in print and broadcast
media, promotional materials as well as promotional and marketing events. Therefore, such
expenses will not be borne by GZI REIT going forward. (See the section headed “Material
Agreements and other Documents Relating to GZI REIT — Tenancy Services Agreements” in this
Offering Circular.)

     The Leasing Agents have also entered into separate agreements with the owners’
committees or the owners of White Horse Building, Fortune Plaza, City Development Plaza and
Victory Plaza to provide property management services for those buildings. In addition, the
Leasing Agents have also entered into agreements with the tenants in the Properties to collect
certain property management fees directly from the tenants. Such property management fees,
which will not form part of the Total Gross Income received by GZI REIT, are applied by the Leasing
Agents (who will be entitled to retain 10.0% of such fees) for payment of all costs and expenses
incurred in the administration, management of the common areas and daily repairs and
maintenance of the Properties. As such, GZI REIT is not liable to pay for any daily repairs and
maintenance of the Properties. (See the descriptions of the various property management
arrangements in the section headed “Material Agreements and other Documents Relating to GZI
REIT” in this Offering Circular.)

     In relation to any vacant units in the Properties, the BVI Companies are themselves liable for
the property management fees. However, the Leasing Agents have agreed under the Tenancy
Services Agreements that the fees which they receive under those agreements shall also satisfy
the property management fees which they are entitled to receive from the relevant BVI Companies
for any vacant units in the Properties.



                                               168
   MANAGER’S DISCUSSION AND ANALYSIS OF FUTURE OPERATIONS

  Property taxes and duties

    Certain taxes and duties shall be incurred in connection with the Properties. These shall
comprise:

     •    urban real estate tax, which will be levied by reference to 70.0% of the original cost of
          the real estate at 1.2% per annum. For the self-constructed buildings, i.e. White Horse
          Building, City Development Plaza and Victory Plaza, the original cost refers to the
          construction cost of the building. For Fortune Plaza, the original cost refers to the
          purchase cost of the semi-completed building and the additional cost incurred to
          complete the construction. According to the relevant Guangzhou tax circular,
          Suidishuifa [2002] No. 235, subject to approval, the cost of land use right can be
          excluded when calculating the tax base for urban real estate tax purposes. Each of the
          BVI Companies is currently liable for urban real estate tax based on the original cost of
          the real estate. After the Listing Date, any fair value adjustments of the Properties in
          accordance with HKFRS will not change the tax base of the buildings for the calculation
          of urban real estate tax purposes.

     •    business tax at 5.0% of Total Gross Income and flood prevention fee of 0.09% of Total
          Gross Income; and

     •    stamp duty on leases, which will be levied at 0.1% of the aggregate Rental Income
          payable over the term of each lease (not including the further term under any option to
          renew). Such stamp duty may be amortised over the terms of the relevant leases.

      Except for urban real estate tax (in respect of which a tax holiday had previously been
granted), the above taxes and duties were also incurred in the past. Foreign enterprises are not
entitled to the tax holiday for urban real estate tax. As such, the BVI Companies were liable to pay
such tax commencing from 1 September 2005 when the risks and rewards of the Properties were
transferred to the BVI Companies.

  Other property expenses

    Other property expenses comprise contributions to the owners’ building funds, depreciation,
bad debts, insurance and annual valuation costs and other expenses for each of the Properties.

      Contributions to owners’ building funds — Expenditures incurred for major renovation and
maintenance works are expensed as contributions to owners’ building funds for the GCCD
Properties. Where the owners’ committee of a building determines that certain renovation works
should be undertaken and paid out of the owners’ building fund, approval from at least two-thirds
of the owners of the building by Gross Floor Area will need to be obtained. Each owner is entitled
to one vote for each square meter of Gross Floor Area it owns. Once approval is obtained to incur
such expenditure, all the owners of the building are required to contribute to the proposed outlay
an amount proportionate to their respective shares of the building. GZI REIT holds 50.2% and
57.3% of the total Gross Floor Area of Fortune Plaza and City Development Plaza respectively.
Given the GCCD undertakings to Moon King and Full Estates described in the sections headed



                                                169
   MANAGER’S DISCUSSION AND ANALYSIS OF FUTURE OPERATIONS

“Material Agreements and other Documents Relating to GZI REIT — GCCD’s Appointment of Moon
King as its Representative and its Irrevocable Undertaking to Moon King” and “Material
Agreements and Other Documents Relating to GZI REIT — GCCD’s Appointment of Full Estates
as its Representative and its Irrevocable Undertaking to Full Estates” in this Offering Circular, GZI
REIT will be able to exercise a two-thirds majority vote at the owners’ committee meetings of
Fortune Plaza and 65.1% of the votes at the owners’ committee meetings of City Development
Plaza Units, just marginally short of 67.0%. GZI REIT owns 100.0% of the Victory Plaza podium
and, when the two tower blocks are completed, GZI REIT’s share of Victory Plaza will be
approximately 19.5% of the total Gross Floor Area.

     No formal contributions to owners building funds were made in the past. For Fortune Plaza
and Victory Plaza, whose constructions were completed in 2003, no requirement on major
renovation works had been required in the past. Furthermore, the warranty period provided by the
contractors on the major equipment do not expire until the first half of 2006. For City Development
Plaza, GCCD had historically borne most of the expenditure as the majority owner of City
Development Plaza. Going forward, such expenditure will be borne by the respective owners
proportionate to their respective shares of the building.

     For such contributions, since no tenants could claim ownership of any common areas and
shared facilities, contributions to owners’ building funds will be treated as expenses on GZI REIT’s
income statement when they arise.

     As there is no owners’ building fund for White Horse Building, GZI REIT will not have to make
any contributions in respect of the White Horse Units. For maintenance costs in respect of major
renovation works, these will be borne proportionately by the respective owners of the building. The
Manager anticipates capital expenditure of HK$26.7 million for the White Horse Units for the
Forecast Period 2005 and Forecast Year 2006. Such capital expenditure includes improvement
and replacement of the ventilation system, electrical appliances, fire emergency equipment and
smoke detectors as well as maintenance capital expenditure and certain building improvements.
As a result, the Manager estimates that any subsequent maintenance costs will be minimal for the
White Horse Units.

    Depreciation — Equipment, plant and machinery at the Properties, where they exist, shall be
depreciated on a straight line basis over the remaining useful life of such equipment, plant and
machinery.

     Bad debts — Defaulted or doubtful payments of rent not covered by security deposits shall
be treated as bad debt expense.

     Insurance — Going forward, GZI REIT will pay for insurance coverage for the Properties.
Specifically, pursuant to the terms of the Loan Facility, the Manager has obtained property all-risk,
rental loss and third party liability insurance policies for the Properties.

      Annual valuation costs — Historically, annual valuation costs were incurred by GZI in valuing
its property portfolio (including the Properties). Going forward, such costs will also be incurred by
GZI REIT to comply with the requirements of the REIT Code and HKFRS.



                                                170
   MANAGER’S DISCUSSION AND ANALYSIS OF FUTURE OPERATIONS

      Others — Historically, there were other property-related expenses comprising directly and
indirectly attributable costs and expenses allocated by GZI. These included expenses such as
employee benefit expenses and miscellaneous expenses (see the section headed “Manager’s
Discussion and Analysis of Financial Condition and Results of Operations — Miscellaneous
expenses” in this Offering Circular) as well as fitting out and maintenance expenses. Apart from
fitting out expenses (which shall be borne by GZI REIT), these expenses will not be applicable to
GZI REIT going forward. Instead, such expenses will be borne either by the Manager or the
Leasing Agents, as appropriate.


  Trust expenses


     GZI REIT will incur additional expenses which were historically not applicable when the
Properties were owned and managed under GZI and GCCD. These expenses include the
Manager’s fees, the Trustee’s fees and certain other expenses (see the section headed “Offering
Circular Summary — Certain Fees” in this Offering Circular).


  Finance costs


      On 7 December 2005, the BVI Companies and the Lending Banks entered into the Facility
Agreement. The Manager intends to draw down US$165.0 million (HK$1,287.0 million) on the
Listing Date to fund part of the payment on the Promissory Note. The Manager intends to utilise
other debt financing facilities or structured debt products to refinance the Loan Facility. As such,
the Manager believes that borrowing in US dollars will increase its flexibility in terms of refinancing
options.


    With such borrowings, the gearing of GZI REIT on the Listing Date will be approximately
32.1% based on the Appraised Value of the Properties.


      Under the Loan Facility, interest will be payable quarterly at a rate of 1.35% per annum above
the three-month US dollar LIBOR rate and principal will be payable in one lump sum at the end of
the three-year period commencing from the drawdown date. In providing this Loan Facility, the
Lending Banks levied an upfront fee of 1.5% of the principal amount of the Loan Facility and a
commitment fee of 0.25% per annum of the committed but undrawn amount of the Loan Facility
under the two month availability period of the Loan Facility.


      The BVI Companies entered into US$/RMB non-deliverable swap facilities with the Lending
Banks (as swap providers) to swap the floating rate US dollar Loan Facility into a synthetic
Renminbi liability (at the then prevailing US$/RMB exchange rate) with a series of fixed rate cash
flows denominated in Renminbi, payable in US dollars and with a principal exchange at maturity
also settled in US dollars for an aggregate notional principal amount of US$165.0 million, for a
minimum tenor of three years. Pursuant to these arrangements, the interest rate under the Loan
Facility has been fixed at approximately 3.2% per annum and at a US$/RMB exchange rate of
1/8.08 for the entire three-year tenure of the loan under the Loan Facility.



                                                 171
   MANAGER’S DISCUSSION AND ANALYSIS OF FUTURE OPERATIONS

  Interest income


     Interest may also be earned on Holdco’s offshore Hong Kong dollar bank account at the
prevailing rate and on security deposits held within the PRC.


  Taxation


      Withholding tax will be levied on each BVI Company with reference to 10.0% of its Total
Gross Income less business tax incurred by the BVI Company. The Manager also expects that
interest income from security deposits held in the PRC will be subject to a 10.0% tax (see the risk
factor headed “The full rate of withholding tax of 20.0% for foreign enterprises may be applied
and/or the BVI Companies could be deemed as having permanent establishments in the PRC and
be subject to income tax in the PRC based on their deemed profits, either of which could have a
material adverse effect on GZI REIT’s income” and the section headed “Profit Forecast —
Sensitivity Analyses” in this Offering Circular).


  Capital expenditures


     Capital expenditures for major renovations and maintenance works will be capitalised in the
case of the White Horse Units as no owners’ committee has been established for the Property. For
the Fortune Plaza Units, the City Development Plaza Units and the Victory Plaza Units, any
expenditure incurred for major renovation and maintenance works will be expensed as
contributions to owners’ building funds, as described earlier in this section.


  Indebtedness


      On 7 December 2005, the BVI Companies and the Lending Banks entered into the Facility
Agreement. It is assumed that US$165.0 million (HK$1,287.0 million) will be drawn down on the
Listing Date as Loan Proceeds to make payment on the Promissory Note. The initial gearing GZI
REIT is approximately 32.1% (based on the Appraised Value of the Properties as at 30 September
2005, as determined by the Independent Property Valuer) whereas the limit prescribed under the
REIT Code is 45.0%. It is the Manager’s strategy to maintain the gearing at between 30.0% to
40.0%. (See the sub-section headed “Finance Costs” above and the section headed “Material
Agreements and Other Documents Relating to GZI REIT — Facility Agreement” in this Offering
Circular.)


Accounting Policies Applicable to GZI REIT


     The accounting policies which will be adopted by GZI REIT will be the same set of the
accounting policies adopted in preparing the Audited Financial Statements of the Properties and
the Audited Financial Statements of the BVI Companies as set out in Note 3 of Appendix I and in
Note 2 to Appendix II to this Offering Circular.



                                               172
                                     PROFIT FORECAST


 Statements contained in this section that are not historical facts may be forward looking
 statements. Such statements are based on the principal assumptions set out herein and are
 subject to certain risks and uncertainties which could cause actual results to differ materially
 from those forecast. While the Manager considers such assumptions to be reasonable, under
 no circumstances should the inclusion of such information herein be regarded as a
 representation, warranty or prediction with respect to the accuracy of the underlying
 assumptions by the GZI Group, the Manager, GZI REIT, the Trustee, the Listing Agent, the
 Underwriters or any person involved in the Global Offering, nor that these results will be
 achieved or are likely to be achieved (see the section headed “Risk Factors” in this Offering
 Circular). None of the GZI Group, the Manager, the Trustee, the Listing Agent or the
 Underwriters guarantees the performance of GZI REIT or the payment of any (or any particular)
 return on the Units. Investors in the Units are cautioned not to place undue reliance on these
 forward looking statements which are made only as at the date of this Offering Circular.


     The profit forecast, for which the Manager is responsible, has been approved by the Board.         App B
                                                                                                        B18
The profit forecast has been prepared on the bases and assumptions set out below and in
accordance with HKFRS, and is consistent in all material respects with those accounting policies
adopted in the Audited Financial Statements of the Properties and the Audited Financial
Statements of the BVI Companies as set out in the Appendices I and II to this Offering Circular.


     The forecast income statements of GZI REIT herein have been prepared on a consolidated
basis, reflecting the forecast consolidated income statements of GZI REIT, comprising Holdco and
the BVI Companies, for the Forecast Period 2005 and the Forecast Year 2006.


     Investors are cautioned that the profit forecast is prepared for the period from 21 December
2005 (the expected Listing Date) to 31 December 2006. The Audited Financial Statements of the
Properties in Appendix I to this Offering Circular only cover the period from 20 December 2002 to
31 December 2002, FY2003, FY2004 and six months ended 30 June 2005. The Audited Financial
Statements of the BVI Companies in Appendix II to this Offering Circular only cover the period from
1 January 2005 to 30 October 2005.


      To the extent that the Manager has not identified events that have occurred or may occur in
respect of the Properties or the BVI Companies during the period from 1 November 2005 to 21
December 2005, the impact of such events on the future results of GZI REIT have not been taken
into account in this profit forecast.


     Investors should note that the extent of any changes in the valuation of the Properties in the
future will be established by reference to the market at the end of each Financial Year. The
Manager has not made any assumption as to property valuation movements in arriving at the
forecast net profit after tax of GZI REIT for the Forecast Period 2005 or the Forecast Year 2006.
Should the valuation of the Properties as at 31 December 2005 or 31 December 2006 (as the case
may be) drop below/rise above the market values of the Properties as at Completion (when valued
as at the end of the Forecast Period 2005) or as at 31 December 2006 (when valued at the end
of the Forecast Year 2006), the resulting gain or deficit less the effect of the related goodwill (if
any) would be charged/credited to the income statement. If the valuation of the Properties drops



                                                173
                                      PROFIT FORECAST

below/rises above the carrying values of the Properties, the resulting gain or deficit will be charged
against/credited to the income statement. At the same time, any deficit of the value of the
Properties might indicate that the goodwill recorded in the books of GZI REIT is impaired and as
such, an impairment charge against the income statement may result.


       Investors should also note that the format and individual line items in GZI REIT’s future
financial reports and statements may differ from those used for the purposes of this profit forecast
and such line items should not be viewed as individual forecasts but form part of the bases and
assumptions used in arriving at the net profit after tax of HK$1.6 million for the Forecast Period
2005 and HK$201.0 million for the Forecast Year 2006. For the Forecast Period 2005, the profit
forecast assumes that the Listing Date will be 21 December 2005 and will vary if the Listing Date
is different. The profit forecast, for which the Directors are solely responsible, has been reviewed
by the Reporting Accountants, the Listing Agent and the Independent Property Valuer. For the
conclusions of their review, investors should refer to the letters from the Reporting Accountants,
the report of the Listing Agent and the letter from the Independent Property Valuer set out in
Appendices IV (Part B), IV (Part C) and V to this Offering Circular respectively, and the principal
bases and assumptions set out below.


      Investors should also note that GZI REIT was only established on 7 December 2005 and only
acquired the BVI Company Shares on 7 December 2005. As such, GZI REIT does not have
historical performance against which the profit forecast herein can be compared. The Audited
Financial Statements of the Properties and the Audited Financial Statements of the BVI
Companies set out in Appendices I and II to this Offering Circular respectively, as well as the
discussion thereof in the section headed “Manager’s Discussion and Analysis of Financial
Condition and Results of Operations” in this Offering Circular, relate to the historical performance
of the individual Properties while owned by and managed under GZI. The management structure
and the cost and capital structures of the Properties when owned by and managed under GZI REIT
as well as the management philosophy and operational processes of the Manager are expected
to differ from those previously adopted with respect to the Properties.


     Moreover, the property management fee structures, certain taxes and certain other expenses
previously applicable to the Properties are no longer applicable, and different property
management fee structures and taxes now apply to the Properties while they are owned by GZI
REIT. Also, GZI REIT incurs expenses at the trust level (such as the Manager’s fees, the Trustee’s
fees and annual listing fees), which expenses were not incurred while the Properties were owned
by and managed under the GZI Group. (See the section headed “Manager’s Discussion and
Analysis of Future Operations” in this Offering Circular)


     Having regard to the various factors noted above, investors should exercise caution in relying
on this profit forecast generally and, in particular, (i) investors should exercise the highest caution
in making any comparison, whether as to individual line items or overall financial performance, as
between the Manager’s projected income statement appearing below and any historic financial
results (whether in the Audited Financial Statements of the Properties as set out in Appendix I to
this Offering Circular or in the Audited Financial Statements of the BVI Companies as set out in
Appendix II to this Offering Circular), and (ii) investors should not treat any individual line item in
the Manager’s projected income statement as a forecast in its own right.



                                                 174
                                         PROFIT FORECAST

Profit Forecast for the Forecast Period 2005 and the Forecast Year 2006


      The Manager forecasts that, in the absence of unforeseen circumstances and on the principal
bases and assumptions set out below, the net profit after tax of GZI REIT (reflecting the
consolidated income statements of GZI REIT, comprising those of Holdco and the BVI Companies)
will be not less than HK$1.6 million for the Forecast Period 2005 and not less than HK$201.0
million for the Forecast Year 2006.

                                                 Audited combined income          Forecast consolidated
                                                statements of the Properties       results of GZI REIT
                                                                               Period from
                                                                6 months       the Listing
                                                 Year ended       ended          Date to       Year ending
                                                31 December      30 June       31 December    31 December
                                                   2004(1)        2005(1)         2005            2006
                                                  (HK$’000)     (HK$’000)       (HK$’000)       (HK$’000)

Rental Income                                     172,080         92,644          6,694         363,702
Other income                                        9,481          5,863             10             337
Total Gross Income                                181,561         98,507          6,704         364,039

Leasing Agents’ fees                               (10,860)       (7,033)          (235)         (12,125)
Property related taxes                             (10,782)       (7,100)          (640)         (28,678)
Other property expenses                            (32,167)      (15,360)          (269)          (7,045)
Total property operating expenses                  (53,809)      (29,493)        (1,144)         (47,848)

Net property income                               127,752         69,014          5,560         316,191

Withholding tax                                         —               —          (637)         (34,705)
Manager’s fees                                          —               —          (538)         (21,935)
Trustee’s fees                                          —               —           (37)          (1,245)
Other trust expenses                                    —               —        (1,212)          (7,904)
Total non-property expenses                             —               —        (2,424)         (65,789)

Fair value gains on investment properties (2)        5,107       612,044             —                   —

Net profit before finance costs,
  interest income and tax                         132,859        681,058          3,136         250,402

Interest income                                         —               —            —             2,743
Finance costs                                           —               —        (1,542)         (52,138)

Net profit before tax                             132,859        681,058          1,594         201,007

Income tax expenses                                (44,273)     (214,650)            —                   —

Net profit after tax                               88,586        466,408          1,594         201,007
Net profit after tax before fair value
  gains on investment properties
  and related tax impact (3)                       85,594         46,239          1,594         201,007




                                                    175
                                                PROFIT FORECAST

                                                                                              Year ending
                                                                                         31 December 2006

                                                                               Based on                       Based on
                                                                               Maximum                        Minimum
                                                                             Offer Price of                 Offer Price of
                                                                               HK$3.075                       HK$2.850


Total Distributable Income (HK$’000)                                                201,007                       201,007
No. of Units in issue                                                       1,000,000,000                 1,000,000,000
Distributions per Unit (4) (HK$)                                                       0.201                         0.201
Distribution yield (4)                                                                6.54%                         7.05%


Notes:

(1)     Historical numbers are extracted and reclassified from the Audited Financial Statements of the Properties set out in
        Appendix I to this Offering Circular.

(2)     In accordance with HKAS 40 “Investment Property”, future changes in the valuation of the Properties will be reflected
        in GZI REIT’s consolidated income statement. However the extent of any changes in the valuation of the Properties
        in the future will be established by reference to the market at that time. The Manager has not made any assumption
        as to property valuation movements in arriving at the forecast consolidated net profit after tax for the period from the
        Listing Date to 31 December 2006. (See the sub-section headed “Sensitivity Analysis” below for certain illustrations
        of the potential sensitivity of the Manager’s profit forecast to movements in the fair value of the Properties.)

(3)     Assuming the direct application of enterprise income tax of 33.0% on Operating Income.

(4)     The distribution per Unit is equal to the Total Distributable Income divided by the total number of Units in issue. Given
        the short period comprised in the Forecast Period 2005, the Manager believes that the distribution per Unit and yield
        figures would not be representative of the future performance of GZI REIT. As a result, the distribution yields
        disclosed above do not include distributions in respect of the Forecast Period 2005.


Bases and Assumptions

     The profit forecast for the Forecast Period 2005 and Forecast Year 2006 has been made on
the principal bases and assumptions set out below. The Manager considers these bases and
assumptions to be appropriate and reasonable at the time of the issue of this Offering Circular.
Investors should carefully consider these bases and assumptions when making an assessment of
the future performance of GZI REIT based on the profit forecast presented herein.

      Total Gross Income

     Total Gross Income comprises Rental Income and other income earned from the Properties.
A summary of the assumptions used to compile the forecast Total Gross Income for the purposes
of the Manager’s projected income statement is set out below:

        Rental Income

   The Rental Income included in the projected income statement comprises a combination of
committed rentals and rentals assumed from renewals and new lettings.



                                                              176
                                      PROFIT FORECAST

      Committed rental refers to rental from (i) leases in the Properties which were in place as at
1 September 2005 and which will not expire prior to 31 December 2005; and (ii) renewals or new
leases for which binding commitments were in place as at 1 September 2005 and for terms which
will not expire prior to 31 December 2006. For any leases which were in place as at 1 September
2005 but which will expire prior to 31 December 2006, rental up to the expiry date has been taken
into account as committed rental. For the Forecast Period 2005 and Forecast Year 2006, over
98.5% and 91.7% of the respective projected Rental Income comprises committed rentals. The
White Horse Units contribute 69.4% of the committed rental for Forecast Year 2006 based on new
leases commencing on 1 January 2006 with rentals rates which are on average 50.0% to 100.0%
higher than current leases.

      For other leases which will expire prior to 31 December 2006 (and for which renewals have
not yet been committed), the Manager has conducted a tenant-by-tenant analysis and assessed
the likelihood of renewal of each such lease based on the historical operational performance of the
relevant property units and the Manager’s ongoing dialogue with tenants. For leases which, in the
Manager’s judgment are likely to be renewed, no rent free period has been assumed. For leases
which the Manager considers not likely to be renewed, an average vacancy period of one to three
months (inclusive of rent free periods) has been assumed.

     For units in the Properties which were vacant as at 1 September 2005, the Manager has
assumed, in general, a further vacancy period of at least three months (inclusive of a rent free
periods) before such units are leased at rental rates which are assumed to be comparable to the
rental rates of adjacent units. The Manager has analysed the particulars of the vacant units and
considered their locations, Rental Income levels of comparable units and the likelihood of new
leases being entered into in relation to those units.

      As of 30 September 2005, the White Horse Units enjoyed a 100.0% occupancy rate. The
reputation of the White Horse brand was built up over the past few years as a garment wholesale
and retail trade centre. With its close proximity to nearby transportation hubs, there has historically
been waiting lists of persons seeking to rent space in the building. As a result, the White Horse
Units had enjoyed a consistent 100.0% average occupancy over the past three years. Although
99.7% of the leases (1,307 out of a total 1,311) in the White Horse Units will expire on 31
December 2005, 1,246 or 95.3% of these leases have been renewed with terms of four or five
years at an average increase of 50.0% to 100.0% in rental rates. For the remaining leases
(approximately 5.0%) that are yet to be renewed, the Manager has assumed renewal on 1 January
2006 at a rental rate increase of at least 50.0% over the rental rate of the existing leases, in line
with the other new tenancy agreements. The average increase of 50.0% to 100.0% in rental rates
is primarily attributable to the fact that with 99.7% of the leases in the White Horse Units expiring
on 31 December 2005, the Manager has taken the opportunity to bring the existing rental rates to
the market level.

     Given the planned renovation of 8th and 9th storeys for wholesale/retail usage, the Manager
has taken into consideration a four-month renovation period (from 1 January to 30 April 2006) and
assumed that the units on the 8th and 9th storeys will be rented out immediately starting from 1
May 2006. No rent free period is assumed in accordance with the normal practice of White Horse
Building and it is expected that the tenants will be signed up during the four-month renovation



                                                 177
                                       PROFIT FORECAST

period. Rental rates assumed are in line with the achievable market rate for the White Horse Units.
Due to the renovation period, the average occupancy rate of the White Horse Units for the
Forecast Period 2005 and Forecast Year 2006 shall be 100.0% and 98.0% respectively and the
occupancy rate as at 31 December 2006 is expected to be 100.0%.


      As at 30 September 2005, the Fortune Plaza Units’ occupancy rate was 76.9%. 0.9% and
7.6% of the leases are due to expire during the Forecast Period 2005 and the Forecast Year 2006
respectively. Fortune Plaza is a relatively new Grade A office building and the Manager expects the
average occupancy rate of the Fortune Plaza Units to gradually increase to 81.5% and 96.5% for
the Forecast Period 2005 and Forecast Year 2006 respectively. As of 31 October 2005, additional
committed leases accounting for another 5.1% of Gross Rentable Area have already been secured
for the Fortune Plaza Units. For the Forecast Period 2005 and the Forecast Year 2006, the
Manager intends to increase marketing efforts to improve the occupancy rate at the Fortune Plaza
Units.


     As of 30 September 2005, the City Development Plaza Units’ occupancy rate was 91.0%.
8.6% and 32.1% of leases are due to expire during the Forecast Period 2005 and the Forecast
Year 2006 respectively. The Manager’s projected income statement indicates that the average
occupancy rate will be 92.5% and 91.9% for the Forecast Period 2005 and Forecast Year 2006
respectively.


      As of 30 September 2005, the Victory Plaza Units enjoyed a 100.0% occupancy rate. There
are no leases due to expire during the Forecast Period 2005 and less than 2.8% of the leases are
due to expire during the Forecast Year 2006. The Manager expects that the space from these
expiring leases will be taken up by the largest tenant in the Victory Plaza Units immediately when
such space becomes available. This tenant has informed the Manager that it intends to increase
its rented space in Victory Plaza and, has in the past, taken up space from expired leases.
Therefore, the Manager has assumed that the average occupancy rate for the Victory Plaza Units
will remain at 100.0% during the Forecast Period 2005 and will be 99.4% for the Forecast Year
2006.


     The table below sets out the occupancy rates of the Properties resulting from the Manager’s
projections in the profit forecast:

                           Average for nine     Average for       Average for
                           months ended 30    Forecast Period    Forecast Year         As at
Property                    September 2005           2005            2006        31 December 2006

                                 (%)                 (%)              (%)               (%)
White Horse Units               100.0             100.0              98.0              100.0
Fortune Plaza Units              65.9                81.5            96.5               94.7
City Development Plaza
  Units                          89.9                92.5            91.9               92.3
Victory Plaza Units              85.2             100.0              99.4               97.2




                                               178
                                    PROFIT FORECAST

      For any assumed renewal or new letting, the Manager assessed the rent prospectively
achievable under each such renewal or new letting, taking into account matters such as the
location of the unit within the relevant Property and the achievable market rent (which the Manager
has determined based on rental rates transacted for units recently leased out in the Properties or
units recently leased out in comparable properties nearby, with adjustments made to reflect the
specific attributes of individual units). A rental increase on existing rent of between nil and 5.0%
has been assumed for each assumed renewal or new letting in the Fortune Plaza Units, the City
Development Plaza Units and the Victory Plaza Units. Notwithstanding the ongoing construction
above the podium of Victory Plaza (as described in the section headed “The Properties and
Business — Victory Plaza Units” in this Offering Circular), the Manager has not assumed further
discounts on the rental rates of the Victory Plaza Units as it is already below the market rental
rates of comparable properties nearby.

     Other income

     Other income represents advertising income from White Horse Units’ indoor billboards. The
Manager has assumed that advertising income will remain at approximately the same level going
forward as compared to recent historical performance.

  Property operating expenses

     Leasing agents’ fees

      For the services of leasing, marketing and tenancy management, Yicheng is entitled to a fee
of 4.0% per annum of the gross revenue of each of the Fortune Plaza Units, the City Development
Plaza Units and the Victory Plaza Units while White Horse Property Management Company is
entitled to a fee of 3.0% per annum of the gross revenue of the White Horse Units.

     (See the section headed “Material Agreements and Other Documents Relating to GZI REIT
— Tenancy Services Agreements” in this Offering Circular for further details of the Leasing Agents’
fees.)

     Property related taxes and duties

    Taxes and duties comprise urban real estate tax, business tax and flood prevention fee and
stamp duty on leases.

     It has been assumed that:

     •    urban real estate tax will be levied by reference to 70.0% of the original cost of the real
          estate at 1.2% per annum. For the self-constructed buildings, i.e. White Horse Building,
          City Development Plaza and Victory Plaza, the original cost refers to the construction
          cost of the building. For Fortune Plaza, the original cost refers to the purchase cost of
          the semi-completed building and the additional cost incurred to complete the
          construction. According to the relevant Guangzhou tax circular, Suidishuifa [2002] No.
          235, subject to approval, the cost of land use right can be excluded when calculating the



                                                179
                                    PROFIT FORECAST

          tax base for urban real estate tax purposes. Each of Moon King, Full Estates and Keen
          Ocean is currently liable for urban real estate tax based on the original cost of the real
          estate and an application is currently being made for Partat to be subject to the same
          tax treatment as the other BVI Companies. After the Listing Date, any fair value
          adjustments of the Properties in accordance with HKFRS will not change the tax base
          of the buildings for the calculation of urban real estate tax purposes.


     •    business tax will remain at 5.0% of Total Gross Income and flood prevention fee will
          remain at 0.09% of Total Gross Income; and


     •    stamp duty on leases will be levied at 0.1% of the aggregate Rental Income payable
          over the term of each lease (not including the further term under any option to renew).
          Such stamp duty has been amortised over the terms of the relevant leases for the
          purpose of the forecast.


      Except for urban real estate tax (in respect of which a tax holiday had previously been
granted), the above taxes and duties were also incurred in the past. Foreign enterprises are not
entitled to the tax holiday for urban real estate tax. As such, the BVI companies are liable to pay
for such tax.


     Other property expenses


    Other property expenses comprise contributions to the owners’ building funds, depreciation,
bad debts, insurance, annual property valuation costs and other expenses for each of the
Properties.


      Contributions to the owners’ building funds include estimated contributions proportionate to
the portions of Fortune Plaza, City Development Plaza and Victory Plaza held by the respective
BVI Companies based on the Manager’s estimation of renovation and maintenance works
anticipated to be carried out at these properties during the Forecast Period 2005 and Forecast
Year 2006. GZI REIT holds 50.2% and 57.3% of Fortune Plaza and City Development Plaza
respectively. GZI REIT owns 100.0% of the Victory Plaza podium and, when the East and West
tower blocks are completed in 2007, GZI REIT’s share of Victory Plaza will be 19.5%. For the
Forecast Year 2006, contributions to these owners’ building funds are forecast to be HK$961,000.
No such contributions have been forecast for the Forecast Period 2005.


     Depreciation of the equipment, plant and machinery for the White Horse Units has been
included in the profit forecast on a straight-line basis over the remaining useful life of such
equipment, plant and machinery.


      Based on historical trends, bad debts for the Forecast Period 2005 and Forecast Year 2006
has been assumed, for the White Horse Units, to be 0.5% of the Rental Income for the said periods
and, for the GCCD Properties, to be 1.0% of the Rental Income of each of the GCCD Properties
for the said periods.



                                               180
                                      PROFIT FORECAST

     Accounting policies require an individual assessment of insurance and annual valuation
costs to be made for each of the Properties for the Forecast Period 2005 and Forecast Year 2006.


  Non-property expenses


     Withholding tax


      It has been assumed that withholding tax will be levied on each BVI Company by reference
to a rate of 10.0% of its Total Gross Income, net of business tax incurred by the relevant BVI
Company. It has also been assumed that the interest income from cash and bank balances held
in the PRC will be subject to a 10.0% withholding tax.


     Manager’s fees


     Pursuant to the Trust Deed, the Manager will receive:


     •    a base fee of 0.3% per annum of the value of the Deposited Property; and                        D11(b)



     •    a service fee of 3.0% per annum of Net Property Income.


      It has been assumed that GZI REIT’s property portfolio remains unchanged and, accordingly,
that the Manager will not be receiving acquisition fees or divestment fees during the Forecast
Period 2005 and the Forecast Year 2006.


     (See the section headed “The Manager — Fees, Costs and Expenses of the Manager” in this
Offering Circular for further details of the Manager’s fees.)


     Trustee’s fees


    Pursuant to the Trust Deed, the Trustee is entitled to an inception fee of not more than
HK$200,000 (as agreed between the Manager and the Trustee) and an ongoing fee of 0.03% per
annum of the value of the Deposited Property, subject to a minimum amount of HK$50,000 per
month.


     (See the section headed “The Trust Deed — Trustee’s Fee” in this Offering Circular for further
details of the Trustee’s fees.)


     Other trust expenses


      Other trust expenses comprise GZI REIT’s recurring operating expenses such as annual
listing fees, the SFC’s fees, the Unit Registrar’s fees, audit and tax advisory fees, legal fees, costs
associated with the preparation and distribution of reports to Unitholders, investor communication
costs and other miscellaneous expenses.



                                                 181
                                    PROFIT FORECAST

  Other trust income and expenses


     Interest income


     Holdco’s Hong Kong dollar account is assumed to earn interest income at an average of
2.15% per annum based on a monthly deposit rate quoted by an international bank. Security
deposits deposited at the BVI Companies’ Renminbi account are assumed to earn interest income
at an average of 1.71% per annum based on a three-month deposit rate quoted by a local bank.


     Finance costs


      On 7 December 2005, the BVI Companies and the Lending Banks entered into the Facility            App B
                                                                                                       B2 (j) & B2 (r)
Agreement. It is assumed that US$165.0 million (HK$1,287.0 million) will be drawn down on the
Listing Date as Loan Proceeds to make payment on the Promissory Note (see the sections headed
“Use of Proceeds”, “The Reorganisation — The Reorganisation Deed — Initial Consideration” and
“Material Agreements and Other Documents Relating to GZI REIT — Facility Agreement” in this
Offering Circular for further details).


    With such borrowings, the gearing of GZI REIT on the Listing Date will be approximately
32.1%, based on the gross amount of the loan proceeds divided by the Appraised value of the
Properties as at 30 September 2005, as determined by the Independent Property Valuer.


      Under the Loan Facility, interest will be payable quarterly at a rate of 1.35% per annum above
the three-month US dollar LIBOR rate, and principal will be payable in one lump sum at the end
of the three-year period commencing from the drawdown date. In providing this Loan Facility, the
Lending Banks levied an upfront fee of 1.5% of the principal amount of the Loan Facility and a
committment fee of 0.25% per annum of the committed but undrawn amount of the Loan Facility
under the two month availability period of the Loan Facility.


      The BVI Companies entered into US$/RMB non-deliverable swap facilities with the Lending
Banks (as swap providers) to swap the floating rate US dollar Loan Facility into a synthetic
Renminbi liability (at the then prevailing US$/RMB exchange rates) with a series of fixed rate cash
flows denominated in Renminbi, payable in US dollars and with a principal exchange at maturity
also settled in US dollars for an aggregate notional principal amount of US$165.0 million, for a
minimum tenor of three years. Pursuant to these arrangements, the interest rate under the Loan
Facility have been fixed at approximately 3.2% per annum and at a US$/RMB exchange rate of
1/8.08 for the entire three-year tenure of the loan under the Loan facility.


      For the Forecast Period 2005 and Forecast Year 2006, finance costs in relation to the Loan
Facility include interest expenses, upfront fees and other costs such as legal fees. However, for
the purposes of the Manager’s profit forecast, the Manager has assumed interest expenses on the
Loan Facility based on a fixed rate of 3.5% per annum. The upfront fees and other costs are
amortised over the three-year tenure of the loan under the Loan Facility.



                                                182
                                      PROFIT FORECAST

  Goodwill/impairment of goodwill charged

    Goodwill is the difference between the final consideration payable under the Reorganisation
Deed and the fair values of the assets and liabilities of the BVI Companies.

      If the final consideration is greater than the fair values of the assets and liabilities of the BVI
Companies, the goodwill will be recorded in the balance sheet of the BVI Companies. Goodwill
arising from acquisition is tested annually for impairment and carried at cost less accumulated
impairment losses. If the final consideration is less than the fair values of the assets and liabilities
of the BVI Companies, a negative goodwill will arise and credited to the income statement of the
BVI Companies.

  Accounting policies applicable to GZI REIT

     The accounting policies which will be adopted by GZI REIT will be the same set of the
accounting policies adopted in preparing the Audited Financial Statements of the Properties and
the Audited Financial Statements of the BVI Companies as set out in Note 3 of Appendix I and Note
2 of Appendix II to this Offering Circular.

  Liquidity and capital resources

     Net cash received from operations, security deposits and interest income will be GZI REIT’s
primary source of liquidity for funding distributions, servicing of debt and payment of non-property
expenses.

     Any future funding may be raised through issue of new Units or additional borrowings
(subject to the 45.0% gearing limit under the REIT Code) or a combination of both.

     The Manager is of the opinion that taking into account the financial resources available to GZI
REIT, including internally generated funds, the available banking facilities and the estimated net
proceeds of the offering of the Units, GZI REIT will have sufficient working capital to satisfy its
operational requirements for the 12 calendar months following the Listing Date.

  Capital expenditure

      For the Forecast Period 2005 and Forecast Year 2006, the Manager anticipates capital                  App B
                                                                                                            B2 (h)
expenditure of HK$26.7 million for the White Horse Units. Such capital expenditure includes
HK$10.3 million of planned fixed assets related capital expenditure and HK$16.4 million of
planned investment properties related capital expenditure. The fixed assets related capital
expenditure includes improving or replacing the ventilation system, electrical appliances, fire
emergency equipment and smoke detectors in the White Horse Units, which will be subject to
depreciation under HKFRS. Such capital expenditure, which includes maintenance capital
expenditure and certain building improvements, has been projected based on the Manager’s
review of the capital expenditure requirements of the White Horse Units as well as the life cycle
of the plant and equipment therein. Investment properties-related capital expenditure include the
renovation of the 8th and 9th storeys of the White Horse Units for wholesale/retail use (which



                                                  183
                                     PROFIT FORECAST

renovation is estimated to cost approximately HK$5.8 million) and other capital expenditures of
similar nature, which are not subject to depreciation under HKFRS. This amount of HK$26.7
million will be funded by cash retained from the proceeds of the Global Offering. (See the section
headed “Material Agreements and Other Documents Relating to GZI REIT — Reorganisation
Deed” in this Offering Circular.)

      Expenditure for major renovation of and maintenance works for the GCCD Properties will be
satisfied by their respective owners’ building funds which are contributed by all the owners of the
three properties according to the percentage ownership of each owner by area. As these
expenditure relates to common areas and shared facilities which no tenants could claim
ownership, these expenditures are treated as expenses on the income statement when they arise.
The item “contribution to the owners’ building fund” in the profit forecast reflects the proportional
amount of GZI REIT’s contribution to the funds. GZI REIT’s shares of Fortune Plaza and City
Development Plaza are 50.2% and 57.3% respectively. GZI REIT owns 100.0% of the Victory
Plaza podium.

  Indebtedness

      The Manager has assumed that the BVI Companies will incur borrowings under the Loan
Facility to fund part of the acquisition costs of the Properties. On 7 December 2005, GZI REIT and
the Lending Banks entered into the Facility Agreement. It is assumed that US$165.0 million
(HK$1,287.0 million) will be drawn down on the Listing Date as Loan Proceeds to make payment
on the Promissory Note. The initial gearing of REIT is approximately 32.1% (based on the
Appraised Value of the Properties as at 30 September 2005, as determined by the Independent
Property Valuer) whereas the limit prescribed under the REIT Code is 45.0%. It is the Manager’s
strategy to maintain the gearing at between 30.0% to 40.0%. (See the section headed “Material
Agreements and Other Document Relating to GZI REIT — Facility Agreement” in this Offering
Circular for further details in relation to the Loan Facility.)

  Fair value of investment properties and derivatives

      Movements in the valuation of investment properties and financial instruments will be
reflected in GZI REIT’s income statement. However, the extent of any changes in the valuation of
investment properties and financial instruments in the future will be established by reference to the
market condition at that time. The Manager has not made any assumption as to movements in
such valuations in arriving at the consolidated net profit after tax for the forecast period. (See the
risk factor headed “Distributions to Unitholders will be subject to cash flow” in this Offering
Circular.)

  Other assumptions

     Other assumptions made in preparing the profit forecast include:

     •    GZI REIT’s property portfolio, comprising the Properties, will remain unchanged;

     •    no distribution reinvestment scheme will be put in place;



                                                 184
                                     PROFIT FORECAST

     •    no further equity capital will be raised by GZI REIT during the Forecast Period 2005 and
          Forecast Year 2006;

     •    all leases are enforceable and will be performed in accordance with their terms as
          amended from time to time;

     •    there will be no material change in existing political, legal, fiscal, market or economic
          conditions in the PRC;

     •    there will be no changes in legislation, regulations or rules in the PRC, BVI, or any other
          country or territory which materially affect the business of GZI REIT;

     •    the portion of the expenses of the Global Offering that will be charged against
          Unitholders’ equity of GZI REIT will be netted off from the proceeds of the Global
          Offering and deducted from the final consideration to be paid to GZI under the
          Reorganisation Deed. All remaining expenses of the Global Offering will be borne by
          GZI;

     •    the proceeds of the Global Offering will be used towards payment of the Promissory
          Note and no interest income will be earned by GZI REIT from the proceeds of the Global
          Offering; and

     •    the Renminbi/HK dollar exchange rate used throughout the forecast period is assumed
          to remain constant at RMB1.04 = HK$1.00.

Sensitivity Analysis

      The profit forecasts and projected distributions included in this Offering Circular are based on
a number of assumptions that have been outlined above. The profit forecasts and projected
distributions are also subject to a number of risks as outlined in the section headed “Risk Factors”
in this Offering Circular.

      Investors should be aware that future events cannot be predicted with any certainty and
deviations from the figures forecast or projected in this Offering Circular are to be expected. To
assist investors in assessing the possible impact of some but not all of these assumptions on the
distribution yield, certain information is set out below demonstrating the sensitivity of distribution
yield to changes in certain assumptions. It should also be noted that distribution yield as discussed
below assumes that the Manager will distribute to Unitholders 100.0% of GZI REIT’s forecast net
profit after tax of not less than HK$201.0 million for FY2006. (See also the section headed
“Distribution Policy” in this Offering Circular.) Accordingly, the sensitivity illustrations are based
exclusively on movements in net profit resulting from the circumstances considered.

     The sensitivity analysis is intended to be for reference only and variations in actual
performance could exceed the ranges shown. Investors should be aware that the sensitivity
analysis is not intended to be exhaustive and is limited in scope in that not all principal
assumptions or other assumptions which are relevant to the figures forecast or projected in this



                                                 185
                                            PROFIT FORECAST

Offering Circular have been examined or reviewed in this sensitivity analysis. The sensitivity
analysis is in each case restricted to the relevant individual line item in the income statement.
Changes and variations against projections may be caused by, or may result from, circumstances
which further impact upon other line items. Movements in other variables may offset or compound
the effect of a change in any variable beyond the extent shown. No attempt is made to identify the
cause of any potential variation against projections, or to identify or quantify any consequential or
related changes or variations in other line items. Investors should further note that the sensitivity
analyses below only consider the potential impact of certain specific factors on the profit forecast
for the Forecast Year 2006.


(1)   Movements in fair value of the Properties

                                                                                    Distribution yield for FY2006

                                                                                     Maximum            Minimum
                                                                                   Offer Price of     Offer Price of
                                                                                     HK$3.075           HK$2.850

For FY2006
Current assumption (1)                                                                 6.54%              7.05%
2.5% decrease in the fair value of the Properties                                      3.21%              3.46%
5.0% decrease in the fair value of the Properties (2)                                     —(2)              —(2)




Notes:

(1)   The Manager has not made any assumption as to movements in such valuations in arriving at the consolidated net
      profit after tax for the Forecast Year 2006 under its current assumption.

(2)   A 5.0% decrease in the value of the Properties may reduce the Total Distributable Income to nil, which means that
      a distribution may not be made.


      Where net profit is reduced in consequence of non-cash items such as property revaluation
losses, cash flow for the period in question may potentially exceed Total Distributable Income.
Investors should note that the Manager may (but is not obliged to) distribute any excess cash
arising from non-cash expenditures such as those arising from a decline in the fair value of the
Properties (in which case more than 100.0% of GZI REIT’s Total Distributable Income could be
distributed). (See the section headed “Distribution Policy” in this Offering Circular for further
information.)




                                                          186
                                            PROFIT FORECAST

(2)   Taxation rates

                                                                                       Distribution yield for FY2006

                                                                                       Maximum             Minimum
                                                                                     Offer Price of     Offer Price of
                                                                                       HK$3.075            HK$2.850

For FY2006
Current assumption (Withholding tax at 10.0%) (1)                                          6.54%            7.05%
                            (1)
Withholding tax at 20.0%                                                                   5.41%            5.84%
Permanent establishment at deemed profit rate of 20.0% (2)                                 6.88%            7.42%
                                                                (2)
Permanent establishment at deemed profit rate of 40.0%                                     6.10%            6.58%



Notes:

(1)   Analysis on withholding tax is calculated based on a rate of 10.0% (based on the tax circular Guofa [2000] No. 37,
      issued by the PRC State Council) and a rate of 20.0% (Article 19 of the Foreign Enterprise Income Tax (“FEIT”) Law).

      The distribution yield based on withholding tax at 10.0% is calculated as follows:


            (Profit before tax - Total Gross Income x (1 - business tax of 5.0%) x 10.0%)/1,000,000,000 Units/Maximum
            Offer Price or Minimum Offer Price


      The distribution yield based on withholding tax at 20.0% is calculated as follows:


            (Profit before tax - Total Gross Income x (1 - business tax of 5.0%) x 20.0%)/1,000,000,000 Units/Maximum
            Offer Price or Minimum Offer Price


(2)   In the event that the BVI Companies are deemed to have created a permanent establishment (taxable presence) in
      the PRC, the BVI Companies will be subject to the foreign enterprise income tax based on:


      Deemed profit multiplied by the standard foreign enterprise income tax rate of 33.0%, where deemed profit is the
      Total Gross Income of the entity multiplied by the deemed profit rate of between 20.0% and 40.0%. For the purpose
      of the above analysis, the Manager has presented two cases using the deemed profit rates of 20.0% and 40.0%


      The distribution yield based on a permanent establishment at a deemed profit rate of 20.0% is calculated as follows:


            (Profit before tax - Total Gross Income x 20.0% x 33.0%)/1,000,000,000 Units/Maximum Offer Price or
            Minimum Offer Price


      The distribution yield based on a permanent establishment at a deemed profit rate of 40.0% is calculated as follows:


            (Profit before tax - Total Gross Income x 40.0% x 33.0%)/1,000,000,000 Units/Maximum Offer Price or
            Minimum Offer Price


The analysis above does not consider the impact of changes in business and property-level taxes
such as urban real estate tax, business and flood prevention tax and stamp duty on leases. (See
the section headed “Taxation” in this Offering Circular for further information.)



                                                          187
                 UNAUDITED PRO FORMA BALANCE SHEETS OF GZI REIT

     The following table sets out the unaudited pro forma balance sheets of GZI REIT as at the
date of the establishment of GZI REIT assuming that the acquisition of the BVI Companies by
Holdco and the issuance of the Units in the Global Offering take place on the same day, and
adjusted for the US$165.0 million to be drawn down on the Loan Facility. The table is prepared
based on the unaudited pro forma balance sheets of GZI REIT in Appendix III to this Offering
Circular and should be read in conjunction with the basis of preparation, the pro forma adjustments
and the letter from the Reporting Accountants therein, as well as the section headed “The
Reorganisation” in this Offering Circular.

                                                                                      Based on           Based on
                                                                                      Maximum            Minimum
                                                                                    Offer Price of     Offer Price of
                                                                                      HK$3.075           HK$2.850

                                                                                    (HK$ million)      (HK$ million)


Assets
Investment Properties (1)                                                              4,005.0            4,005.0
Property, plant and equipment                                                               3.0                3.0
Other assets (2)                                                                            6.0                6.0
                              (3)
Cash and cash equivalents                                                                  88.0               88.0
           (4)
Goodwill                                                                                   78.0                 —


Liabilities
Rental deposits, accruals and other payables                                              (62.0)             (62.0)
Amount drawn down under the Loan Facility(5)                                          (1,265.0)          (1,265.0)

                                                                                       2,853.0            2,775.0

Unitholders’ equity
Issued capital(6)                                                                      2,930.0            2,798.0
                    (4)
Retained earnings                                                                            —                51.0
Global Offering expenses (7)                                                              (77.0)             (74.0)

                                                                                       2,853.0            2,775.0




Notes:

(1)   Investment properties are stated at market valuation based on the valuations performed by the Independent Property
      Valuer as at 30 September 2005. The Directors of the Manager and GZI consider that there is no material change
      in the fair value of the Properties in the period from 1 October 2005 to 31 October 2005.

(2)   Other assets include deferred assets, trade receivables, other receivables and prepayments.

(3)   Cash and cash equivalents represent cash and bank deposits of HK$12,653,000 acquired from the BVI Companies,
      additional cash of HK$47,146,000 injected by GZI into the BVI Companies before the Global Offering in accordance
      with the Reorganisation Deed (in order to reach a cash balance of HK$59,799,000 to match the amount of all current
      and non-current liabilities, including rental deposits for all tenancies as of 31 October 2005 but excluding bank




                                                         188
             UNAUDITED PRO FORMA BALANCE SHEETS OF GZI REIT

      loans), cash of HK$26,700,000 retained from the proceeds of the Global Offering for proposed renovation works at
      the White Horse Units and cash of HK$2,085,600 (also retained from the proceeds of the Global Offering) for the
      Rental Income attributable to Partat for the period from the Listing Date to 31 December 2005 (both dates inclusive),
      as provided for in the Reorganisation Deed.

(4)   Goodwill is the excess of the final consideration payable under the Reorganisation Deed (as described in the section
      headed “Material Agreements and Other Documents Relating to GZI REIT — Reorganisation Deed” in this Offering
      Circular) over the aggregate fair values of the assets and liabilities assumed in the acquisition of the BVI Companies.

      Based on the Maximum Offer Price, the market value of the Properties as at 30 September 2005 (as determined by
      the Independent Property Valuer) and the amounts of assets and liabilities listed in the table above, there will be an
      estimated goodwill of HK$78.0 million.

      Retained earnings represent the excess of the aggregate fair values of the assets and liabilities assumed in the
      acquisition of the BVI Company Shares (i.e. the Initial Consideration) over the final consideration payable under the
      Reorganisation Deed.

      Based on the Minimum Offer Price, the market value of the Properties as at 30 September 2005 (as determined by
      the Independent Property Valuer) and the amounts of assets and liabilities listed in the table above, the excess of
      the aggregate fair values of the assets and liabilities assumed in the acquisition of the BVI Company Shares over
      the final consideration payable under the Reorganisation Deed amounted to HK$51.0 million, which is recognised
      in retained earnings.

(5)   This refers to the amount of HK$1,287.0 million drawn down under the Loan Facility on the Listing Date, net of
      capitalised debt related expenses of HK$21.6 million in respect of the Loan Facility.

(6)   This represents the issued capital arising from the issuance of 417,000,000 Units (amounting to HK$1,137,234,060)
      to GZI as partial consideration for the transfer of the BVI Company Shares to Holdco and the offering of 583,000,000
      Units (amounting to HK$1,792,725,000 based on the Maximum Offer Price and HK$1,661,550,000 based on the
      Minimum Offer Price) under the Global Offering.

(7)   This represents the expenses of the Global Offering (which includes, among other things, underwriting fees and
      commissions, professional fees and expenses as well as printing fees) of HK$77,158,000 based on the Maximum
      Offer Price and HK$73,879,000 based on the Minimum Offer Price.


     At the Maximum Offer Price and the Minimum Offer Price, the NTA per Unit remains at                                        App B
                                                                                                                                B10
HK$2.775, based on the assumptions set out above and on the 1,000,000,000 Units expected to
be in issue immediately following completion of the Global Offering.


     Excluding goodwill, the NTA per Unit is expected to be HK$2.775. The Maximum Offer Price
of HK$3.075 and the Minimum Offer Price of HK$2.850 respectively represent a premium of 10.8%
and 2.7% to the NTA per Unit. Based on the Maximum Offer Price of HK$3.075, the final
consideration will be adjusted to HK$4,089,416,000 taking into account an assumed adjustment
of HK$75,236,000 under the Reorganisation Deed while based on the Minimum Offer Price of
HK$2.850, the final consideration will be adjusted to HK$3,961,520,000 taking into account an
assumed adjustment of HK$52,660,000.




                                                           189
                            STATEMENT OF DISTRIBUTIONS


 The forward looking statements in this section are based on the assumptions set out in the
 section headed “Profit Forecast — Bases and Assumptions” in this Offering Circular and are
 subject to certain risks and uncertainties which could cause actual results to differ materially
 from those forecast. While the Manager considers such assumptions to be reasonable, under
 no circumstances should the inclusion of such information herein be regarded as a
 representation, warranty or prediction with respect to the accuracy of the underlying
 assumptions by the GZI Group, the Manager, GZI REIT, the Trustee, the Underwriters or any
 person involved in the Global Offering, nor that these results will be achieved or are likely to be
 achieved (see the section headed “Risk Factors” in this Offering Circular). Investors in the Units
 are cautioned not to place undue reliance on these forward looking statements which are made
 only as at the date of this Offering Circular.


     None of GZI REIT, the Manager, the Trustee or any of the Joint Global Coordinators
guarantees the performance of GZI REIT or the payment of any (or any particular) return on the
Units. See also the risk factor headed “Distributions to Unitholders will be subject to cash flow” in
this Offering Circular.


     GZI REIT’s distribution for the period from the Listing Date to 31 December 2005 will be paid
together with its distribution for the period from 1 January 2006 to 30 June 2006 on or before 30
November 2006.


Forecast Year 2006


     Unitholders will be paid, in the absence of unforeseen circumstances, total distributions per      App B
                                                                                                        B19
Unit of not less than HK$0.201 in respect of the Forecast Year 2006, representing a distribution
yield of 6.54% based on the Maximum Offer Price (excluding other transaction costs) and 7.05%
based on the Minimum Offer Price (excluding other transaction costs).


Units Purchased at Market Price


     The market price of the Units may fluctuate. The yield obtained by investors who purchase
Units in the secondary market at a market price that differs from the Maximum Offer Price or the
Minimum Offer Price (excluding, in each case, other transaction costs), calculated using such
secondary market purchase price, will accordingly differ from the distribution yields stated above.




                                                190
STRUCTURE, MANAGEMENT AND AGREEMENTS




                 191
                      STRUCTURE AND ORGANISATION OF GZI REIT

    The following diagram illustrates the primary structural and contractual relationships
between, among others, the Manager, the Trustee and the Leasing Agents:


                                                                Unitholders

             GZI                                 -     Public in Hong Kong
                                                 -     Institutional investors
                                                 -     GZI (holding through Dragon Yield)
                                                                 (1)
                                                 -     Yue Xiu

                                         Investment in GZI REIT               Distributions

                          100.0%        Management
                                         services                                       Trustee fees         Trustee
                  Manager
               (GZI REIT Asset                                                                               (HSBC
                                                                  GZI REIT                                 Institutional
             Management Limited)                                                                         Trust Services
                                         Management                                    Holds assets of   (Asia) Limited)
                                            fees                                        GZI REIT on
          Advisory           Advisory                                                    trust for the
            fees             services                                                   Unitholders
                                                                       100.0%
               Property Adviser
             (Jones Lang LaSalle                            GZI REIT (Holding) (4)
                   Limited)                               2005 Company Limited
                                                               (Hong Kong)

                      Leasing,
  Leasing Agents      marketing
   (Guangzhou        and tenancy
   White Horse       management
     Property          services                100.0%                  100.0%                 100.0%            100.0%
   Management
     Co. Ltd.
              (2)
                                            Partat              Moon King              Full Estates      Keen Ocean
 and Guangzhou                           Investment              Limited               Investment          Limited
 Yicheng Property                          Limited                (BVI)                  Limited            (BVI)
   Management         Leasing,              (BVI)                                         (BVI)
          (3)
      Ltd. )          marketing
                     and tenancy
                     management
                        fees

                                                                                          City
                                         White Horse           Fortune Plaza                             Victory Plaza
                                                                                      Development
                                            Units                  Units                                     Units
                                                                                       Plaza Units




Notes:

(1)   To the extent that Yue Xiu and its subsidiaries (other than the members of the GZI Group) receive Units by way of
      distribution in their capacity as GZI Qualifying Shareholders.

(2)   White Horse Property Management Company, which is 96.8% owned by GZI (with the remaining 3.21% owned by
      GCCD Group), will provide leasing, marketing and tenancy management services to Partat in respect of the White
      Horse Units and will receive a fee from Partat.

(3)   Yicheng, which is 85.7% owned by GZI (with the remaining 14.3% owned by GCCD Group), will provide leasing,
      marketing and tenancy management services to Moon King, Full Estates and Keen Ocean for the Fortune Plaza
      Units, the City Development Plaza Units and the Victory Plaza Units respectively, and will receive a fee from each
      of these BVI Companies.

(4)   Currently known as King Profit Holdings Limited, which is in the process of changing its name to GZI REIT (Holding)
      2005 Company Limited. The change of name is currently expected to be effected by 31 December 2005.




                                                            192
                                         THE MANAGER

Overview


      GZI REIT must be organised and managed in a manner which is consistent with the
provisions and requirements of the REIT Code, subject as described in the section headed
“Modifications, Waivers and Authorisation Conditions” in this Offering Circular. The Manager is
independent of the Trustee and possesses the skill and resources to discharge its functions in
relation to GZI REIT effectively and responsibly. In discharging such functions, the Manager is
required to observe high standards of corporate governance. For details of the corporate
governance policies and procedures of the Manager, see the section headed “Corporate
Governance” in this Offering Circular.


The Manager of GZI REIT


     The Manager has responsibility for managing the assets of GZI REIT for the benefit of the
Unitholders. The Manager will set the strategic direction and risk management policies of GZI
REIT and manage such assets in accordance with the stated investment strategy of GZI REIT and
in accordance with compliance procedures set forth herein. The Manager is licensed by the SFC
to conduct the regulated activity of asset management, as required by the SFC. See also the
section headed “Strategy” in this Offering Circular.


Ownership Structure of the Manager                                                                  App 2
                                                                                                    B4 (a)


     The Manager is a wholly owned subsidiary of GZI, which is part of the Yue Xiu conglomerate.
Yue Xiu is the flagship trading and investment vehicle of the Guangzhou Municipal People’s
Government in Hong Kong and the conglomerate has interests in a wide range of businesses and
industries, including property investment and development, toll roads and bridges, newsprint,
cement and ready mix concrete, high technology businesses, dry cell battery manufacturing,
financial, stock broking and insurance services as well as hotel operations.


     GZI, Yue Xiu’s principal subsidiary, is listed on both the Hong Kong Stock Exchange and
Singapore Exchange Securities Trading Limited. It is actively engaged in the development of
commercial and residential properties primarily in Guangzhou and is also engaged in the provision
of property management, lease management and marketing services to properties developed by
the GZI Group or properties in which it has an interest.




                                              193
                                              THE MANAGER

Organisational Structure of the Manager


        The Manager has separated its operational management functions into the following
functional divisions: (i) asset management; (ii) development and project management;
(iii) investment management; (iv) financial management; (v) investor relations; and (vi) corporate
services, as shown in the organisational structure below:



                                                  Board of Directors




                                                  Executive Director
                                Finance and                                                      Remuneration and
                                                     and Chief              Disclosures
           Audit Committee       Investment                                                        Nomination
                                                  Executive Officer         Committee
                                 Committee                                                         Committee
                                                   Mr Liu Yong Jie


                                                                     Deputy Chief
                                   Deputy Chief                    Executive Officer
                                  Executive Officer                 and Compliance
                                  Mr Cai Xiao Ping                     Manager
                                                                   Mr Lau Jin Tin, Don



                                                                Financial
            Asset       Development and                      Management and
                                            Investment                              Investor            Corporate
         Management          Project                          Chief Financial
                                           Management                              Relations             Services
         Mr Cheng Jiu     Management                              Officer
                                          Mr Cai Xiao Ping                        Mr Alex Shiu        Mr Yu Tat Fung
             Zhou       Mr Ip Wing Wah                       Ms Ko Yung Lai,
                                                                  Jackie


     •     Asset management team — This team is primarily responsible for the operational
           aspects of the Properties, including strategic asset planning, marketing and
           development, leasing, property and tenancy management and oversight of the Leasing
           Agents.


     •     Development and project management team — This team is primarily responsible for
           overseeing the property maintenance and the asset improvement aspects of the
           Properties and conducting property due diligence on properties proposed to be acquired
           by GZI REIT. It also plays a supporting role in formulating the asset enhancement
           strategies and plans of GZI REIT.


     •     Investment management team — This team is primarily responsible for formulating and
           implementing the Manager’s investment management plans (including acquisition and
           divestment strategies, financing strategies and overall management policies of GZI
           REIT). It is also responsible for human resources management, procurement,
           administrative support and for developing a research platform to support the investment
           management function.




                                                      194
                                            THE MANAGER

       •    Financial management and compliance team — This team is primarily responsible for
            accounting, financial management and compliance as well as information technology.


       •    Investor relations team — This team is primarily responsible for communicating and
            liaising with Unitholders and other key stakeholders of GZI REIT as well as media and
            investor relations. It is responsible for the preparation and production of annual and
            half-yearly reports as well as roadshows, website and other marketing and promotional
            channels and materials for GZI REIT.


       •    Corporate services team — This team is primarily responsible for supporting the
            Manager’s core asset management and investment management functions through the
            provision of ancillary back office services such as legal and corporate secretarial
            support.


The Board


     The Board is responsible for the overall governance of the Manager, including establishing
goals for management and monitoring the achievement of these goals. The Board has established
a framework for the management of GZI REIT, including a system of internal controls and business
risk management processes.


       The Board comprises six Directors, three of whom are independent non-executive Directors.
The Chief Executive Officer is also a member of the Board. The Chairman and executive Director
(Mr Liang Ning Guang), the Chief Executive Officer and executive Director (Mr Liu Yong Jie) as
well as a Deputy Chief Executive Officer and compliance manager (Mr Don Lau) are currently
licensed by the SFC as Responsible Officers for the purposes of the SFO.


    (For further information on the Board and its committees, see the section headed “Corporate
Governance” in this Offering Circular.)


Directors


       The Directors are:

Name                                          Age         Position

Mr LIANG Ning Guang (           )              51         Chairman and Executive Director
Mr LIU Yong Jie (      )                       48         Chief Executive Officer and Executive Director
Mr LIANG You Pan (          )                  50         Non-Executive Director
Mr CHAN Chi On, Derek (             )          42         Independent Non-Executive Director
Mr LEE Kwan Hung, Eddie (               )      40         Independent Non-Executive Director
Mr CHAN Chi Fai, Brian (            )          50         Independent Non-Executive Director




                                                    195
                                      THE MANAGER

     Information on the business and working experience of the Directors is set out below:

Chairman

  Mr LIANG Ning Guang                                                                               App 2
                                                                                                    B4 (a)


     Mr Liang is the Chairman and an Executive Director of the Manager as well as one of the
Manager’s Responsible Officers. Mr Liang is also currently the Vice Chairman of Yue Xiu, an
Executive Director of GZI Transport Limited (a Hong Kong listed company) and a director of Yue
Xiu Securities Co. Ltd. Mr Liang was formerly an Executive Director and Deputy General Manager
of GZI but has resigned in order to dedicate more time to the Manager.

    Prior to joining Yue Xiu in 1989, Mr Liang was a Deputy Commissioner of the Guangzhou
Municipal Taxation Bureau.

     Mr Liang graduated from the Television University (Guangzhou) in the PRC with a major in
finance and holds a master’s degree in business administration from the Murdoch University of
Australia. He is a Senior Accountant and a member of the Chinese Institute of Certified Public
Accountants and is a Responsible Officer licensed under the SFO to carry on regulated activities
types 1, 4, 6 and 9.

Executive Director

  Mr LIU Yong Jie


     Mr Liu is an Executive Director and Chief Executive Officer of the Manager as well as one of
the Manager’s Responsible Officers. He is concurrently Deputy General Manager of Yue Xiu but
is expected to spend 100.0% of his time in the management of GZI REIT.


     Before joining Yue Xiu, Mr Liu was a Director and Deputy General Manager of GCCD, and
was responsible for strategic planning in property development, property management and
promotional campaigns, asset acquisition and asset enhancement. Mr Liu has more than 11 years
of experience in property investment and management. Prior to joining the property department of
GCCD, Mr Liu was an assistant to the director of, and a research fellow in economic studies in,
the Economic Research Centre in Guangzhou.

     Mr Liu graduated from the University of Hubei (formerly known as Wuhan Teachers’ College)
in the PRC with a major in science; and obtained an Executive Master degree of Business
Administration from Honolulu University.


Non-executive Director

  Mr LIANG You Pan

    Mr Liang is a non-executive Director of the Manager. He is currently also the Deputy General
Manager of GZI.



                                              196
                                       THE MANAGER

     Prior to joining GZI in 1998, Mr Liang was the Workshop Director of Guangzhou Wen Chong
Shipyard Company Limited, which is a subsidiary of China State Shipbuilding Company. Between
1991 and 1998, Mr Liang was a unit head in the administrative supervisory division of the
Guangzhou Municipality. Mr Liang has a wide range of experience in PRC corporate governance
practices, particularly in the area of internal controls.

    Mr Liang graduated in 1986 from Guangzhou Economics Management Cadre’s Institute in the
PRC with a diploma in corporate governance.

Independent Non-executive Directors

  Mr CHAN Chi On, Derek

    Mr Chan is an independent non-executive Director of the Manager and is currently also the
Managing Director of Tai Fook Capital Limited.

     Mr Chan is an executive director of Tai Fook Securities Group Limited, a company listed on
the Hong Kong Stock Exchange, and is in charge of its corporate finance division. He graduated
from the Hong Kong University of Science & Technology with a master’s degree in business
administration in 1994. Between 1989 and 1996, he had worked for the Hong Kong Stock
Exchange. He is an adjunct professor in the School of Accounting and Finance of the Hong Kong
Polytechnic University. Mr Chan has over 15 years of experience in the financial services industry.

     Mr Chan is currently also a director of the following companies: Billion Venture Limited,
Broadtrade Investments Limited, Champion Worldwide Development Limited, Cityscope Limited,
Fergurson Hotel Holdings Limited, Golden Union Development Limited, Hotel Nikko Hong Kong
Limited, King Choi Company Limited, Lipro Prosper Limited, Queensway Hotel Holdings Limited,
Queensway Hotel Limited, Silver Regent Limited, Smart Express Investment Limited, Success
International Investment Limited, Tai Fook Capital Limited, Tai Fook Management Consultancy
Limited, Wiseson Investments Ltd, Besteam Limited, Chishore Enterprise Inc., Early Days
Investments Limited, Fergurson Investment Corp., Fitmond Limited, GST Holdings Limited, Lucky
Trio Ltd, New Unity Holdings Ltd, Tai Fook (BVI) Limited, Tai Fook Investment Consultancy
(Shanghai) Company Limited, Tai Fook Securities Group Limited and Top Castle Group Limited.

       Mr Chan believes that his directorships in the other companies listed above do not affect his
abilities to perform his duties as an independent non-executive Director of the Manager.

  Mr LEE Kwan Hung, Eddie

      Mr Eddie Lee is a Partner and the Chief Representative of Woo, Kwan, Lee & Lo’s Beijing
office.

     Mr Lee received his LL.B (Honours) degree and Postgraduate Certificate in Laws from the
University of Hong Kong in 1988 and 1989 respectively. He was then admitted as a solicitor in
Hong Kong in 1991 and the United Kingdom in 1997. Mr Lee joined Woo, Kwan, Lee & Lo in 1989
and handled a number of listing projects in Hong Kong. In 1992, Mr Lee joined the Hong Kong
Stock Exchange as a Manager in the Listing Division and was promoted to be a Senior Manager
in 1993.



                                                197
                                       THE MANAGER

     Mr Lee is currently also a director of the following companies: Mirabell International Holdings
Limited, GST Holdings Limited, Innomaxx Biotechnology Group Ltd, Oriental Ruby Limited,
Walcom Bio-Chemicals (Holdings) Limited, Warrina Limited and Polink International Limited.


       Mr Lee believes that his directorships in the other companies listed above do not affect his
abilities to perform his duties as an independent non-executive Director of the Manager.


  Mr CHAN Chi Fai, Brian


     Mr Chan is an independent non-executive Director of the Manager and is currently also the
Chief Financial Officer of the Parkview Group, which comprises two listed companies and a group
of other companies with total assets exceeding HK$10.0 billion.


     Mr Chan has been heavily involved in the overall development of the Hong Kong Parkview
Group since he joined the group in 1990. With projects and investment properties in Hong Kong,
the PRC, Singapore and United Kingdom, Hong Kong Parkview Group is engaged in property
development, hospitality, trading, ferry operation and shipbuilding.


      Prior to joining the Parkview Group, Mr Chan worked in the banking sector from 1978 to 1989,
the first seven years of which was with a reputable international bank. The last position Mr Chan
held before leaving his banking career was as Group Financial Controller of IBI Asia (Holdings)
Limited. During his 11 years in banking, Mr Chan was involved in international banking operations,
mergers and acquisitions as well as financial and risk management.


      Mr Chan has a higher diploma in business studies from the Hong Kong Polytechnic as well
as professional accounting qualifications in Hong Kong. Mr Chan is currently also a director of the
following companies: Bingo Trading Limited, Chyau Fwu (Shenzhen) Development Company
Limited, Classic Assets Limited, Corwood Enterprises Inc., Dragon Spirit Limited, Fantasy Island
Development Company Limited, FBM Marine International Limited, Gallaria Furnishings
International Limited, Gembrook Developments Limited, Hertford Assets Limited, Hong Kong
Parkview (China) Limited, Hong Kong Parkview (Finance) Limited, Hong Kong Parkview Estates
Security Limited, Hong Kong Parkview Estates Management Limited, Hong Kong Parkview
International Limited, Hong Kong Parkview International Management Limited, Hong Kong
Parkview Treasury Limited, Jet Propelled Limited, Jiangsu Parkview Hotels & Resorts Limited,
Keen Logistics Limited, Korean International Motors Limited, Market Asset Consultants Limited,
Master Charm Holdings Limited, MV 2208 Limited, Naviera Universal Espanola, S.L., Newmeadow
Limited, Panama Limited, Parkview Ferry Holdings Limited, Parkview Hotel Services Limited,
Parkview International Trading Limited, Parkview Management Services Limited, Parkview Marine
Holdings Limited, Parkview Property Development Limited, Parkview Treasury Limited, Perfect
Lane Limited, Pollex Limited, Primeline International (Holdings) Inc., Primeline Energy Holding
Inc., Primeline Energy China Limited, Primeline Energy Operations International Limited, Target
Profits Limited, Total Force Investments Limited and Universal Boss Limited.


       Mr Chan believes that his directorships in the other companies listed above do not affect his
abilities to perform his duties as an independent non-executive Director of the Manager.



                                                198
                                         THE MANAGER

Independence of Directors                                                                                 App B
                                                                                                          B2 (p)


     In assessing the independence of a non-executive Director, the Board will take into account
the following factors, none of which is necessarily conclusive. Independence is more likely to be
questioned if the Director:

     (i)    holds more than 1.0% of the total issued Units or more than 1.0% of the total issued
            share capital of the Manager or GZI. Any candidate for appointment as an independent
            non-executive Director who holds an interest of more than 1.0% must satisfy the Board,
            prior to such appointment, that the candidate is independent. A candidate holding an
            interest of 5.0% or more will normally not be considered to be independent. When
            calculating the 1.0% limit, the Board must take into account the total number of Units or
            shares (as the case may be) held legally or beneficially by the Director, together with the
            total number of Units which may be issued to the Director or his nominee upon the
            exercise of any outstanding options, convertible securities and other rights (whether
            contractual or otherwise) to call for the issue of Units;

     (ii)   has received an interest in Units as a gift, or by means of other financial assistance,
            from a connected person or GZI REIT itself (however, subject to paragraph (i) above).
            The Director will still be considered independent if he receives Units as part of his
            Director’s fee or pursuant to any option schemes established by the Manager or GZI);

     (iii) is a director, partner or principal of a professional adviser which currently provides (or
           has, within one year immediately prior to the date of his proposed appointment,
           provided) services, or is an employee of such professional adviser who is or has been
           involved in providing such services during the same period, to GZI REIT or any
           connected person of GZI REIT or the Manager or any person who was a significant
           holder or, where there was no such significant holder, any person who was the Chief
           Executive Officer or a Director (other than an independent non-executive Director) of
           the Manager or of any connected person of the Manager within one year immediately
           prior to the date of the proposed appointment, or any of their associates;

     (iv) has a material interest in any principal business activity of, or is involved in any material
          business dealings with, GZI REIT or with any connected person of GZI REIT, the
          Manager or GZI;

     (v)    is on the Board specifically to protect the interests of an entity whose interests are not
            the same as those of the Unitholders as a whole;

     (vi) is or was connected with a Director or the Chief Executive Officer of the Manager or with
          a significant holder (as defined in the REIT Code) of GZI REIT, within two years
          immediately prior to the date of his proposed appointment;

     (vii) is, or has at any time during the two years immediately prior to the date of his proposed
           appointment been, an executive or Director (other than an independent non-executive
           Director) of the Manager or of any connected person of GZI REIT;



                                                  199
                                        THE MANAGER

     (viii) is financially dependent on GZI REIT or any connected person of GZI REIT; or


     (ix) is closely related to either Yue Xiu and/or GZI.


     For the purpose of this section, any reference to the Manager shall include the Manager’s
direct and indirect holding companies and substantial shareholders.


     The factors set out in this section are included for guidance only and are not intended to be
exhaustive. The Board may take account of any factors relevant to a particular case in assessing
independence.


     Investors should refer to the full details of the assessment of the independence of
non-executive Directors set out in the corporate governance policy of the Manager (a copy of
which is available for inspection in accordance with Appendix XI to this Offering Circular).


Senior Executives                                                                                         App 2
                                                                                                          B4 (a)


     Information on the business and working experience of the senior executives of the Manager
is set out below:


  Mr LIU Yong Jie (          )


    Mr Liu Yong Jie is the Chief Executive Officer and one of the Responsible Officers of the
Manager. Information on his business and working experience have been set out in the subsection
headed “Directors” above.


  Mr LAU Jin Tin, Don (           )


       Mr Lau is a Deputy Chief Executive Officer and one of the Responsible Officers of the
Manager. He assists the Chief Executive Officer of the Manager to ensure that GZI REIT is
operated in accordance with the stated investment strategy of GZI REIT. Mr Lau also serves as the
Compliance Manager of the Manager and is responsible for ensuring that the compliance manual
adopted by the Manager, the REIT Code, the Trust Deed and the Listing Rules are adhered to.
Additionally, he is responsible for managing GZI REIT’s borrowings, cash flow, assets and
liabilities and other financial matters. He will be invited to participate in the Manager’s Finance and
Investment Committee to review and make recommendations on any financial matters as well as
acquisitions and disposals of assets.


      Prior to joining Yue Xiu in 1995, he was an executive officer of NatWest Markets for over 10
years and participated in various capital market and corporate finance transactions, including
origination, advice and execution of a wide range of PRC project financing activities.


     Mr Lau is concurrently the Deputy General Manager of the Finance and Accounts Department
of both Yue Xiu and GZI. During the past 10 years with Yue Xiu and GZI, his main responsibilities



                                                 200
                                        THE MANAGER

included the active structuring, sourcing and management of equity and debt capital to finance the
properties and other projects held by the two groups of companies. Mr Lau’s experience also
included managing the risk exposures of the Yue Xiu group and the GZI Group as well as hedging
their asset and liability portfolios.


     Mr Lau obtained a masters degree in applied finance from the Macquarie University in
Australia and is an Associate of the Chartered Institute of Bankers.


  Mr CAI Xiao Ping (          )


    Mr Cai is a Deputy Chief Executive Officer of the Manager, and also heads its investment
management team.


     Mr Cai joined GCCD in 1993 and, prior to joining the Manager, was the Deputy General
Accountant of GCCD Group and a director of GCCD. He had previously assumed a number of
roles in the GCCD Group, such as General Manager of the Finance and Accounting Department.


     Prior to joining GCCD, Mr Cai worked in the 4th Harbour Engineering Bureau of the Ministry
of Communications from 1969 to 1993 where he had been a section member, Head of Finance
Section and Manager of Finance Department. During his employment with the bureau, he had
been in charge of the financial and accounting management of numerous major projects
undertaken by the bureau, which were some of the key national projects of the Ministry of
Communications.


     Mr Cai has over 20 years of experience in finance management as well as investment,
development and operation of real estate and property management, specialising in restructuring,
mergers and acquisitions, planning and use of capital, analysis and decision making in relation to
major corporate business, finance organisation and implementation, credit plans and cash
application, and exploring new financial resources and preservation and appreciation of
guaranteed assets.


    Mr Cai is a Senior Accountant and the Vice Chairman of the Real Estate Development
Accounting Committee of the Construction Accounting Society of China and a member of the
Guangzhou Senior Accountant Review Committee.


  Mr CHENG Jiu Zhou (             )


     Mr Cheng heads the asset management team of the Manager. He joined the GCCD group of
companies in 1997 and worked in Guangzhou Grandcity Development Ltd. and Guangzhou
Investment Property Holdings Limited.


     In the past nine years, Mr Cheng has conducted extensive market research in the property
industry, covering property appraisal, investment strategy planning, feasibility study, the marketing
of the property industry, lease management and cost analysis. He has extensive management



                                                201
                                         THE MANAGER

experience in the property market. He has also published a book about the property market and
delivered 20 papers in various magazines. Mr Cheng has conducted feasibility studies and
investment strategy planning for more than 20 real estate development projects such as Tianhe
Grandcity Business Plaza, Huiya Garden, Galaxy City, Fortune Plaza and Victory Plaza.


     Mr Cheng obtained a Bachelor of Arts in Law from Hubei University in the PRC in 1993 and
a Master of Arts in Economics from Jinan University in the PRC in 1996. He is currently a member
of the China Institute of Registered Appraisers.


  Mr IP Wing Wah (          )


     Mr Ip heads the Manager’s development and project management team and has over 20
years of experience in the building industry. He has worked for contractors where his main duty
was to manage the staff and to ensure timely completion of building projects for clients such as
government departments and private developers.


      Mr Ip has also worked for a few property developers where his main duty was to work closely
with the design teams, architects, engineers, quantity surveyors and solicitors to develop and build
various properties. Projects he worked on were mainly residential, commercial and industrial
developments.


     Mr Ip obtained an Endorsement Certificate in Building Studies from Hong Kong Polytechnic
in 1986 and is a member of Chartered Institute of Building as well as a member of the Hong Kong
Institute of Construction Managers.


  Ms KO Yung Lai, Jackie (           )


     Ms Ko is the Chief Financial Officer of the Manager and is concurrently the Director and
Financial Controller of Yue Xiu Securities Co. Ltd. She is expected to spend the majority of her
time in the management of GZI REIT.


     She has been the Deputy General Manager of the Finance and Accounts Department of GZI.


     During her nine years with the Yue Xiu group, she has been mainly responsible for
overseeing the group’s financial management functions and enhancement of management
accounting systems that support strategic and operational requirements of the group.


      Ms Ko is licensed by the SFC as a Responsible Officer of Yue Xiu Securities Co. Ltd. for
regulated activities of both dealing and advising on securities under the SFO. She is registered
with the Hong Kong Stock Exchange as a dealing director and is also a member of the Hong Kong
Securities Institute.




                                                202
                                       THE MANAGER

     Prior to joining the Yue Xiu group in 1997, Ms Ko worked for Arthur Andersen & Co., Certified
Public Accountants for several years in their Hong Kong and Sydney offices.


     She is a fellow member of both the Hong Kong Institute of Certified Public Accountants
(formerly known as the Hong Kong Society of Accountants) and the Chartered Institute of
Management Accountants (United Kingdom) and has obtained a Professional Diploma in
Management Accountancy from the Hong Kong Polytechnic University.


  Mr Alex SHIU (         )


     Mr Shiu, who heads the Manager’s investor relations team, received his Bachelor in Business
Administration from the Chinese University of Hong Kong (International Business Management)
and further obtained a post graduate degree from Huate Etudes Commerciales of Paris (Finance)
pursuant to a French Government scholarship. He has worked in the field of corporate finance for
over 10 years, and is currently a Director and Responsible Officer for Corporate Finance of Yue
Xiu Securities Co. Ltd. His experience covers a wide range of industry including property
development in the PRC, and has previously worked at multinational corporations. Mr Shiu has
been in charge of investor relations services at GZI since 2004.


  Mr YU Tat Fung (           )


     Mr Yu Tat Fung is the company secretary of the Manager. He is also the legal counsel of GZI
and, from October 2004, the company secretary of both GZI and GZI Transport Limited. Mr Yu
obtained a bachelor’s degree in Social Sciences from the University of Hong Kong in 1981. He
attained the Solicitors Final Examination in England in 1983. He was admitted as a solicitor of the
Supreme Court of Hong Kong in 1986. He was also admitted to the Bar of the Province of British
Columbia in Canada in 1995. Prior to joining GZI in 1997, he was engaged in private practice with
an emphasis on corporate and commercial law.


Compensation of Directors


     The Directors who are also the Manager’s employees receive compensation in the form of
salaries, allowances and benefits in kind, including the Manager’s contribution to the pension
plans for its Directors. The non-executive Director and the independent non-executive Directors
receive fees from the Manager. The Manager has entered into service contracts with its executive
Directors. The fees and compensation of the Directors are borne by the Manager and not by GZI
REIT.




                                               203
                                         THE MANAGER

Fees, Costs and Expenses of the Manager

    The Manager’s remuneration shall, at the maximum, comprise:

    (i)    In each Financial Year, a base fee of 0.3% per annum of the value of the Deposited
           Property payable semi-annually in arrears on the first Business Day following the end
           of the relevant six month period and calculated as at the last day of each six-month
           period, during that Financial year as follows:

                                                   0.3% x VDP s
                                      SAF =    (         2
                                                                  )
           where:

           SAF = semi-annual fees

           VDP s = the value of the Deposited Property as per the published audited annual
           financial statements of GZI REIT for the immediately preceding Financial Year, provided
           that the value of VDPs for the first Financial Year shall be the value of consolidated gross
           assets of GZI REIT as disclosed in this Offering Circular.

           The base fee calculated in accordance with the formula above is subject to adjustment
           as follows:

           adjustment = 0.3% x VDPE - SSAF

           where:

           VDP E = the value of Deposited Property as per published audited annual financial
           statements of GZI REIT for the Financial Year; and

           SSAF = the sum of the semi-annual base fees actually received by the Manager in
           respect of the relevant Financial Year.

           Where the above adjustment is positive, GZI REIT shall pay the difference to the
           Manager following publication of the audited annual financial statements of GZI REIT.
           Where the above adjustment is negative, the Manager shall pay the difference to GZI
           REIT following publication of audited annual financial statements of GZI REIT for the
           relevant Financial Year.

    (ii)   In each Financial Year, a service fee of 3.0% per annum of Net Property Income as
           shown in the last published audited annual financial statements of GZI REIT, which shall
           accrue on a daily basis and be calculated as at the last day of a calendar month, and
           be payable monthly in arrears, subject to adjustment as follows:

           adjustment = 3.0% x NPI - EMP



                                                   204
                                       THE MANAGER

          where:


          NPI = net property income as per audited financial statements for the relevant Financial
          Year; and


          EMP = sum of all monthly payments of service fee received by the Manager in that year.


          Where the above adjustment is positive, GZI REIT shall pay the difference to the
          Manager following publication of audited financial statements for the relevant Financial
          Year. Where the above adjustment is negative, the Manager shall pay the difference to
          GZI REIT following publication of audited financial statements for the relevant Financial
          Year.


     (iii) A transaction fee of 1.0% of the consideration for the acquisition of any real estate
           (which, for the avoidance of doubt, shall not include any taxes, withholdings, out-of-
           pocket expenses or deductions incurred by GZI REIT in connection with any such
           acquisition) to form part of Deposited Property (except where the vendor of such real
           estate is the Manager or any of its connected persons, which would include where
           property is acquired under the right of first refusal granted by GZI to GZI REIT as
           described in the section headed “Material Agreements and Other Documents Relating
           to GZI REIT — Deed of Right of First Refusal” in this Offering Circular), which shall be
           paid as soon as practicable after the relevant acquisition.


     (iv) A transaction fee of 0.5% of the gross sale price (which, for the avoidance of doubt, shall
          not include any taxes, withholdings, out-of-pocket expenses or deductions incurred by
          GZI REIT in connection with any such sale) of the disposal of any part of Deposited
          Property comprising of real estate (except where the purchaser of such real estate is the
          Manager or any of its connected persons), which shall be paid as soon as practicable
          after the relevant sale of real estate.


     The base fee and the service fee payable to the Manager for the first Financial Year shall be
pro-rated according to the number of days between the Listing Date and 31 December 2005.


     Any increase in the base fee, service fee, acquisition fee and disposal fee over the
percentages set out above or any change to the structure of the Manager’s remuneration will
require Unitholders’ approval by Special Resolution.


Manager’s Powers and Duties


     The Trust Deed provides that the Manager is responsible for, and has the power to manage
and operate GZI REIT, which includes managing and investing the Deposited Property. The
Manager may (to the extent permitted by applicable regulatory requirements) delegate to any
person as it thinks fit specific aspects (but not the whole) of the management and the
administration of GZI REIT’s investments and any of the rights, trusts and discretions granted to



                                                205
                                        THE MANAGER

the Manager by the Trust Deed. Notwithstanding the foregoing, the Manager shall be fully liable
for all losses, liabilities, damages, costs and expenses suffered or incurred by GZI REIT as a result
of the appointment of any such delegate or agent as if the relevant act or omission had been
performed by the Manager itself.


     The Manager shall, among other things, by itself or through its delegates:


     •    manage GZI REIT and the Deposited Property in accordance with the Trust Deed in the
          sole interests of Unitholders;


     •    fulfil its duties under applicable law;


     •    ensure that in managing GZI REIT, it has sufficient oversight of the daily operations and
          financial conditions of GZI REIT and the Deposited Property, and shall remain to be the
          key decision-maker of all material matters relating to the management of GZI REIT; and


     •    ensure that the financial and economic aspects of the Deposited Property are
          professionally managed in the sole interests of Unitholders in accordance with the Trust
          Deed.


Manager’s Right to Reimbursement


     The Manager is, to the extent permitted by the REIT Code, entitled to apply, or to be
reimbursed from, the assets of GZI REIT (at such times and over such periods as the Trustee and
the Manager may determine in any particular case) for all liabilities, as agreed with the Trustee,
that may be properly suffered or incurred by the Manager in the performance of its obligations or
the exercise of its powers under, among other things, the Trust Deed.


Limitation of Manager’s Liability


      The Manager shall not be under any liability except such liability as may be assumed by it
under the Trust Deed, nor shall the Manager be liable for any act or omission of the Trustee, the
Unit Registrar or the Approved Valuer. In the absence of fraud, negligence, wilful default or breach
of, among other things, the Trust Deed, the REIT Code, applicable laws and regulations by the
Manager (including its directors, employees, agents and delegates), it shall not incur any liability
by reason of any error of judgment or any matter or thing done or suffered or omitted to be done
by it in good faith under the Trust Deed.


Manager’s Right of Indemnity


     The Manager and any director, employee and servant of the Manager shall be indemnified
out of, and shall be entitled for the purpose of indemnity to have recourse to, the Deposited
Property or any part thereof against any actions, costs, claims, damages, expenses or demands
to which it may be put as Manager and as director, employee and servant of the Manager save



                                                    206
                                        THE MANAGER

where such action, cost, claim, damage, expense or demand is occasioned by the fraud,
negligence, wilful default or breach of, among other things, the Trust Deed, the REIT Code and any
applicable law by the Manager and any director, employee, servant, agent or delegate of the
Manager.


      In particular, the Trustee shall, on demand, indemnify in full and hold harmless the Manager
out of, and shall be entitled for the purpose of indemnity to have recourse to, the Deposited
Property or any part thereof, from and against all and any claims (whether or not successful,
compromised or settled), actions, liabilities, demands, proceedings or judgments which may be
instituted, made, threatened, alleged, asserted or established in any jurisdiction against or
otherwise involving the Manager and from all losses, costs, damages, charges or expenses which
the Manager may suffer or incur from time to time in any case arising out of, based upon or in
connection with, whether directly or indirectly, any underwriting agreements in respect of an issue
of Units (including the Global Offering) entered into by the Manager (in its capacity as manager of
GZI REIT), provided that any such claims or expenses are not occasioned by fraud, negligence,
wilful default or breach of, among other things, the Trust Deed, the REIT Code or the applicable
law by the Manager or any director, employee, servant, agent or delegate of the Manager.


Retirement or Removal of the Manager


     The Manager may retire as manager of GZI REIT at any time after giving 90 days’ written
notice, or any other period of notice as agreed to by the Trustee, to the Trustee provided that, and
subject to:


     •    the Manager selecting a new manager duly qualified under the REIT Code, licensed
          under the SFO and acceptable to the Trustee, the SFC and the Hong Kong Stock
          Exchange; and


     •    the requirement in the REIT Code that such retirement will not adversely affect the
          interests of the Unitholders in any material respect.


     The Manager shall be subject to removal by prior notice in writing given by the Trustee in any
of the following events:


     —    if the Manager fails, or neglects after reasonable notice from the Trustee, to carry out
          or satisfy any material obligation imposed on the Manager by this Deed provided that
          such removal shall not adversely affect the interests of the Unitholders in any material
          respect pursuant to this paragraph and that 30 days’ prior written notice is given to the
          Manager by the Trustee;


     —    if for good and sufficient reason(s), the Trustee is of the opinion, and so states in writing
          such reason and opinion, that a change of Manager is desirable in the interests of the
          Unitholders;



                                                 207
                                THE MANAGER

—   if the Unitholders representing at least 75.0% in value of the Units issued and
    outstanding (excluding those held or deemed to be held by the Manager, as well as by
    any Unitholder who may have an interest in retaining the Manager) deliver to the Trustee
    a written request, or a Special Resolution is passed, to dismiss the Manager;


—   if the Manager goes into liquidation becomes bankrupt or if a receiver is appointed over
    any of its assets or a judicial manager is appointed in respect of the Manager (or any
    such analogous process occurs or any analogous person is appointed in respect of the
    Manager);


—   if the Manager ceases to carry on business;


—   if the SFC revokes the Manager’s licence to conduct the regulated activity of asset
    management in respect of GZI REIT; or


—   if the Manager is required by law or the REIT Code to retire.




                                        208
                                  THE LEASING AGENTS

The Leasing Agents


     Yicheng was incorporated in the PRC in 1997 and is 85.7% owned by GZI, with the remaining
14.3% owned by GCCD Group, a state owned enterprise in the PRC separate from the Yue Xiu
Group and the GZI Group. As at 30 September 2005, Yicheng managed more than 470,000 sq.m.
of commercial space in Guangzhou and was ISO9001:2000 certified in 2003.


     White Horse Property Management Company was incorporated in the PRC in 1998 to provide
dedicated leasing, marketing, tenancy management and property management services to White
Horse Building and has been exclusively managing the property since 1998. It is 96.8% owned by
GZI with the remaining 3.2% owned by GCCD Group. White Horse Property Management
Company was ISO9001:2000 certified in 2001.


     Yicheng and White Horse Property Management Company have entered into separate
agreements with the owners’ committees or owners of Fortune Plaza, City Development Plaza,
Victory Plaza, or as the case may be, White Horse Building under which each of Yicheng and
White Horse Property Management Company agreed to provide certain property management
services in relation to the common property at the relevant building(s). Pursuant to these
agreements, Yicheng and White Horse Property Management Company entered into agreements
with the tenants in the buildings to collect certain property management fees directly from the
tenants. In the past, tenants in the White Horse Units paid both their rent and property
management fees to White Horse Property Management Company in an undivided amount. Going
forward, tenants in the White Horse Units will pay their rents directly to Partat and their property
management fees to White Horse Property Management Company. As such, property
management fees will not form part of the property income received by the BVI Companies. In
relation to vacant units in the Properties, the BVI Companies are themselves liable for the property
management fees. However, Yicheng and White Horse Property Management Company have
agreed under the Tenancy Services Agreements that the fees which they receive under those
agreements shall also satisfy the property management fees which they are entitled to receive
from the relevant BVI Companies for any vacant units (see the section headed “Material
Agreements and Other Documents Relating to GZI REIT — Tenancy Services Agreement” in this
Offering Circular).


      Yicheng and White Horse Property Management Company are entitled under PRC law to
retain 10.0% of the property management fees as their own remuneration and are required to
apply the rest of the fees for payment of all costs and expenses incurred in the administration,
maintenance and management of the common areas in the buildings. Any surpluses after
satisfaction of such expenses are to be held by Yicheng and White Horse Property Management
Company on trust and may be applied for the renovation, alteration, rebuilding, replacement,
addition, alteration and improvement of the common areas in the buildings if the owners thereof
(including the relevant Special Purpose Vehicles through which GZI REIT holds its properties) so
agree.




                                                209
                                 THE LEASING AGENTS

      The Manager and each of Full Estates, Moon King and Keen Ocean have also entered into
a tenancy services agreement with Yicheng while the Manager and Partat have entered into a
tenancy services agreement with White Horse Property Management Company, under which each
of Yicheng and White Horse Property Management Company will provide, among others, the
following services:


     •    leasing services, including advising on achievable rental rates based on current market
          assessment, reporting with recommendations on appropriate rental levels and lease
          incentive(s) relating to renewal of the existing tenancy agreements, initiating lease
          renewals and negotiation of terms with tenants to conclude such renewals, as well as
          preparing letters of offer, or invitation to renewal, to tenants, and ensuring proper
          execution of tenancy agreements;


     •    marketing services, including acting as a marketing agent for the marketing and letting
          out of the Properties, recommending and finalising marketing programs with the
          Manager, contracting for advertising and promotional programs and providing regular
          updates on the marketing programs as required; and


     •    lease management services, including reviewing and advising on tenants’ expansion
          requirements, administering collection of deposits, rent and other sums due from
          tenants, evaluating the assessment or re-assessment of government rates and taxes
          (including urban real estate tax) for the Properties, preparing the annual budget and
          three years’ budget forecast for each Property, as well as advising tenants on the
          procedures for setting up operations.


     The leasing and marketing services described above will be provided to GZI REIT on an
exclusive basis (see the section headed “Material Agreements and Other Documents Relating to
GZI REIT — Tenancy Services Agreements” in this Offering Circular). However, the Tenancy
Services Agreements do not preclude GZI REIT from also obtaining such services from other
service providers.


Property Management Offices


     In accordance with PRC regulations, White Horse Property Management Company (as the
property manager of White Horse Building) had on-site premises of 70.4 sq.m. for its use in
connection with its property management functions. White Horse Property Management Company
enjoys the use of these premises free of rent.


     Similarly, Yicheng (as the property manager of City Development Plaza) has on-site premises
of 97.0 sq.m. for its use in connection with its property management functions. Yicheng pays a
nominal monthly rent of HK$5 per square metre for these premises.


     The space occupied by Yicheng in Fortune Plaza and Victory Plaza do not form part of the
Fortune Plaza Units or the Victory Plaza Units.



                                              210
                                    THE LEASING AGENTS

Senior Executive of the Leasing Agents

     Information on the business and working experience of the senior executives of Yicheng is
set out below:

  Mr MO Qing Hua (          )

     Mr Mo is the General Manager of Yicheng and is responsible for overseeing and directing the
day to day operations of Fortune Plaza, City Development Plaza and Victory Plaza.

     Mr Mo has been with the GCCD group since 1993 and has held various senior positions in
the property management department of the group. With more than 10 years of experience in
property management, he has managed a wide range of commercial and residential properties,
including White Horse Building and City Development Plaza. Mr Mo also actively contributed to the
commencement of operations in Victory Plaza.

     Mr Mo holds a degree in enterprise management from the Guangdong Business College.

  Ms WANG Hai Ying (            )

     Ms Wang is a Deputy General Manager of Yicheng. She has previously served as Deputy
General Manager of Guangzhou Urban Construction Development & Property Management Co.
Ltd and Guangzhou Urban Construction Development Investment Consulting Co. Ltd. Ms Wang
has extensive managerial experience in the field of property management. She is also a director
of Guangdong Property Management Association and Guangzhou Municipal Property
Management Association.

     Ms Wang graduated in 1997 from Guangdong Province Cadre’s Institute with a degree in
economic management. In 1999, she obtained a certificate from the Ministry of Construction after
having undergone training for the National Property Management Enterprises Manager.

  Mr XIE Si Xin (       )

      Mr Xie is a Deputy General Manager of Yicheng. He has over 15 years of experience in
property investment planning and business solicitation. Mr Xie holds a Bachelor’s Degree in
Economic Studies from Huazhong University of Science and Technology and a Master of Arts in
World Economic Studies from Sun Yat-Sen University, both in the PRC. Mr Xie also holds the
following certificates: Real Estate Economist (intermediate level), China Certified Real Estate
Appraiser and Real Estate Brokerage Qualification, as well as an engagement certificate as a
specialist in the project bidding and tendering team of Guangzhou Urban Construction
Development Group.

     Mr Xie has worked for the GCCD group since 1992 where he has been involved in market
surveys, feasibility studies, valuations and planning for various projects and in the operations and
management of numerous commercial buildings (such as part of White Horse Building, Fortune
Plaza, City Development Plaza, Victory Plaza, Guangzhou Dong Zhan Commercial Building and
Hong Fa Plaza). He has also held various managerial positions within the GCCD group.



                                                211
                                   THE LEASING AGENTS

    Information on the business and working experience of the senior executives of White Horse
Property Management Company is set out below:


  Mr ZHANG Yu (        )


     Mr Zhang Yu is the General Manager of White Horse Property Management Company and is
responsible for overseeing and directing the operations of the company. He is also responsible for
planning and maintaining White Horse Building’s competitive edge through targeted promotional
events, developing and evaluating strategic business plans, marketing and mass communications,
as well as property service operations.


      Mr Zhang joined the GCCD group in 2003 and acted as the Deputy General Manager of White
Horse Property Management Company in 2004. Prior to that, he held various senior positions with
Beijing Centre for Defence Technology and Shenzhen Hua Wei Ji Shu Co. Ltd..


     Mr Zhang holds a bachelor’s degree in enterprise management and a doctorate in economics
from Renmin University of China. He is also Vice Chairman of the Guangdong Garment Industry
Association and a mechanical and electrical engineer.


  Mr XU Shu Sui (          )


     Mr Xu is currently a Deputy General Manager of White Horse Property Management
Company. Mr Xu graduated from South China University of Technology. He is an equipment
administration engineer, one of the property management specialists of Guangzhou State Land
and Housing Administration Bureau, a visiting instructor for the training sessions of Guangzhou
Municipal Property Management Association and a bidding appraisal specialist for property
management projects in the Guangzhou Tendering Center. Mr Xu has also been involved in
compiling books in property management, such as Practice Guidance on Office Building Property
Management and Practice Guidance on Mansion Property Management. He participated in the
nationwide training program for managers of property management companies, and holds a
working permit certificate.


     Mr Xu has over 10 years of experience in the management of large commercial buildings, and
property management. He joined GCCD Group in 1985 and held the positions of Deputy General
Manager for Guangzhou City Construction Development & Property Management Company and
the General Manager for Guangzhou Zhiwei Real Estate Company.


  Mr LIU Yi Sheng (            )


     Mr Liu was appointed Deputy General Manager of White Horse Property Management
Company in August 2005. Prior to joining White Horse Property Management Company, he served
as the deputy general manager of Guangzhou’s largest property company, Guangzhou City
Property Management Group, for over six years. Over the same period, he was also president of
a PRC-Hong Kong cooperative property company and chairman of a large cleaning services
company.



                                               212
                                   THE LEASING AGENTS

    He has also published on property management issues, including a book, Property
Management Practice, and a research thesis, A Study of Labor Quality in Property Management
Establishments.


     Mr Liu holds a postgraduate diploma in linguistics.


Conflicts of Interests


      As both the Leasing Agents are members of the GZI Group and GZI is actively engaged in
the development of commercial and residential properties primarily in Guangzhou as well as in the
provision of leasing, marketing, tenancy management and property management services to
properties developed by the GZI Group or other properties in which it has an interest, potential
conflicts of interest may arise in relation to leasing and marketing opportunities. In order to
address such potential conflict of interests between GZI and GZI REIT, the following arrangements
are being put into place:


  Segregation of certain operational functions


     The GZI Group is undergoing an internal restructuring which will result in the Leasing Agents
only being solely responsible for providing leasing and marketing services to GZI REIT’s
properties and another company within the GZI Group (the “GZI Property Manager”) being solely
responsible for providing such services to properties not belonging to GZI REIT.


  “Chinese Walls”                                                                                       App B
                                                                                                        B2(k)


     “Chinese Wall” procedures are being put in place to ensure that there is segregation of
information between the Leasing Agents and the GZI Property Manager. These will include having
separate operating premises and IT systems, and separate reporting lines, for each of the Leasing
Agents and the GZI Property Manager.


  Contractual protection


     Contractual provisions have been included in each of the Tenancy Services Agreements
entered into between the Manager and Partat, Moon King, Full Estates or, as the case may be,
Keen Ocean, and the relevant Leasing Agent to provide that:


     (i)    the Leasing Agents will at all times act in the best interests of GZI REIT and exercise a
            reasonable standard of care, skill, prudence and diligence under the circumstances then
            prevailing that a reputable leasing agent would use in providing similar services for
            comparable commercial properties in Guangzhou;


     (ii)   the Leasing Agents will adhere to the organisational charts and reporting lines agreed
            with the Manager and will act in accordance with the directions of the Manager;



                                                 213
                                   THE LEASING AGENTS

     (iii) the Leasing Agents will implement the annual business plan and budget approved by the
           Manager every year and use its best endeavours to achieve the revenue targets in such
           approved annual business plan and budget; and

     (iv) if leasing or marketing opportunities in relation to any of the Properties become
          available to the Leasing Agents which the Leasing Agents, acting reasonably and in
          good faith, consider are or are likely to be in competition with the GZI Property Manager,
          the Leasing Agents will either:


          •     refer all such business proposals to the Manager for vetting and confirmation
                before the relevant Leasing Agent proceeds with such proposals or opportunities;
                or

          •     sub-contract to a third party leasing agent independent of the GZI Group, to devise
                and implement the relevant business proposal.

     GZI, being the parent company of the Leasing Agents, has provided an undertaking to GZI
REIT that it will procure that the Leasing Agents will comply with the relevant provisions set out in
the Tenancy Management Agreements in this regard.


  Transitional procedures

     The GZI Group will have a transitional period of six months from 7 December 2005 (the date
of the Tenancy Services Agreements) to complete the restructuring described above. The
transitional period is required because:


     •    significant staff movement and re-allocation will be involved in the restructuring.
          Accordingly, a large number of employment contracts will have to be re-executed (and
          potentially re-negotiated) with those affected personnel; and

     •    it is also anticipated that various statutory employment-related provident funds would
          have to be re-allocated as a result of the significant staff movement, which will require
          substantial time to process.

      It is also expected that as part of the restructuring, the business licence position for Yicheng
and White Horse Property Management Company will need to be re-assessed to ensure that each
of the Leasing Agents and the GZI Property Manager continues to hold all necessary licences for
their respective property management functions, and where needed, further licensing applications
may need to be made to the relevant PRC authorities.


     As from the Listing Date, the “Chinese Wall” procedures will be put in place in relation to
reporting lines/structures and operational information segregation. As soon as practicable
thereafter, the personnel and IT systems of the Leasing Agents and the GZI Property Manager will
also be physically segregated (i.e. separate office premises and systems). It is anticipated that
such physical segregation will be achieved within two months after the Listing Date.



                                                 214
                                 THE LEASING AGENTS

      Notwithstanding that the Leasing Agents are both subsidiaries of GZI, which is also involved
in the business of owning and investing in commercial properties in Guangzhou, the Leasing
Agents have confirmed to the Manager that they are capable of performing, and shall perform,
their duties to GZI REIT independently of GZI’s related businesses and in the best interest of GZI
and the Unitholders.




                                               215
                               CORPORATE GOVERNANCE

     With the objective of establishing and maintaining high standards of corporate governance,
certain policies and procedures have been put in place to promote the operation of GZI REIT in
a transparent manner and with built-in checks and balances. Set out below is a summary of the
key components of the corporate governance policies that have been adopted and are followed by
the Manager and GZI REIT. Subject to the Trust Deed, the corporate governance policies may be
amended from time to time without Unitholders’ approval.


Authorisation Structure                                                                                 App B
                                                                                                        B4(a)(ii)


     GZI REIT is a unit trust authorised by the SFC under section 104 of the SFO and regulated
by the provisions of the REIT Code. The Manager has been authorised by the SFC under section
116 of the SFO to conduct the regulated activity of asset management. The Manager has three
persons who are approved as Responsible Officers pursuant to the requirements of section 125
of the SFO and Rule 5.4 of the REIT Code, and Mr Liang Ning Guang and Mr Liu Yong Jie are
executive Directors of the Manager pursuant to the requirements of section 125 of the SFO.


     The Trustee is registered as a trust company under section 77 of the Trustee Ordinance and
is qualified to act as a trustee for authorised collective investment schemes under the SFO and the
REIT Code.


Roles of the Trustee and Manager


      The Trustee is responsible under the Trust Deed for, among other things, the safe custody of      App B
                                                                                                        B4(a)
the assets of GZI REIT held by it on behalf of Unitholders. The Manager’s role under the Trust          B4(b)

Deed is to manage GZI REIT in accordance with the Trust Deed and, in particular, to ensure that
the financial and economic aspects of GZI REIT’s assets are professionally managed in the sole
interests of the Unitholders.


Functions of the Board


     The Board currently comprises six members, three of whom are independent non-executive
Directors.


      The Board principally oversees the day to day management of the Manager’s affairs and the
conduct of its business and is responsible for the overall governance of the Manager. The Board
function is largely separate from, and independent of, the executive management function. The
Board leads and guides the Manager’s corporate strategy and direction. Day to day management
functions and certain supervisory functions have been delegated to relevant committees of the
Board and a schedule of matters specifically reserved to the Board has been formally adopted.
The Board exercises its general powers within the limits defined by the Articles of Association, with
a view to ensuring that management discharges its duties and is compensated appropriately, and
that sound internal control policies and risk management systems are maintained. The Board will
also review major financial decisions and the performance of the Manager. In accordance with the
RElT Code, the Manager is required to act in the best interests of the Unitholders, to whom it owes
a fiduciary duty.



                                                216
                              CORPORATE GOVERNANCE

Roles of the Key Board Members


     The roles of the key members of the Board are as follows:


     •    Chairman — responsible for the overall leadership of the Board and the Manager
          generally.


     •    Chief Executive Officer — responsible for the day to day operations of the Manager and
          supervises the Manager’s management team to ensure that GZI REIT is operated in
          accordance with its stated strategies, policies and regulations.


     •    Independent non-executive Directors — govern the Manager through the Board and
          their participation in Board committees.


     See the section headed “The Manager — The Board” in this Offering Circular for further
details of the composition of the Board.


Board Composition


     The composition of the Board is determined using the following principles:


     •    the Board should comprise Directors with a broad range of commercial experience,
          including expertise in funds management and the property industry; and


     •    at least one-third of the Board (and, in any event, not less than three Directors) should
          comprise independent non-executive Directors. (See the section headed “The Manager
          — Independence of Directors” in this Offering Circular for the factors that will be taken
          into account in assessing the independence of a non-executive Director.)


     The composition will be reviewed regularly to ensure that the Board has the appropriate mix
of expertise and experience.


Board Committees


      The Board has the power to delegate to committees consisting of such numbers of its body
as it thinks fit. Various committees have been established to assist the Board in discharging its
responsibilities. The committees of the Board have been set up with clear terms of reference to
review specific issues or items and to then submit their findings and recommendations to the full
Board for consideration and endorsement. Unless the decision making power has been vested in
the relevant committee by the Board, the ultimate responsibility for making final decisions rests
with the full Board and not the committees.




                                               217
                               CORPORATE GOVERNANCE

     The committees of the Board are as follows:


  Finance and Investment Committee


      The Finance and Investment Committee comprises four Directors, including the Chairman,
the Chief Executive Officer and at least one independent non-executive Director. It is responsible
for, among other matters, evaluating and making recommendations on proposed acquisitions and
disposals of assets, approve budgets and review actual expenses on all key expenditures and
reviewing the quarterly financial performance, forecasts and annual financial plan of the Manager
and GZI REIT. The Finance and Investment Committee also reviews and recommends changes to
financial authorities, policies or procedures in areas such as accounting, taxes, treasury,
distribution payout, investment appraisal, management and statutory reporting.


  Audit Committee


    The Audit Committee comprises independent non-executive Directors only (at least one of
whom must have appropriate professional qualifications or accounting or related financial
management expertise) and has at least three members. Among other matters, it reviews the
completeness, accuracy and fairness of GZI REIT’s financial statements and considers the scope,
approach and nature of internal and external audit reviews, and is responsible for the overall risk
management. The Audit Committee appoints external auditors, reviews their reports and guides
management to take appropriate actions to remedy faults or deficiencies identified in internal
control. The Audit Committee is also responsible for reviewing and monitoring connected party
transactions (see the section headed “Connected Party Transactions” in this Offering Circular).


  Remuneration and Nomination Committee


     The Remuneration and Nomination Committee comprises the Chief Executive Officer and at
least three other Directors, one of whom must be an independent non-executive director. Among
other matters, it reviews the terms and conditions of employment of all staff and Directors (other
than the members of the Remuneration Committee, whose remuneration is determined by the
Board) and recommends the manpower deployment plan (including the succession plan for the
management of the Manager and the Board), remuneration and retirement policies and packages.
It ensures that no Director is involved in deciding his own remuneration. It is also responsible for
reviewing the structure, size and composition of the Board and its committees on an ongoing basis
and for nominating, and providing recommendations on, persons for appointment, re-appointment
or removal as Directors. If a member of the Remuneration and Nomination Committee is subject
to re-appointment or removal, then such Director will abstain from participating in such
discussions.




                                                218
                               CORPORATE GOVERNANCE

  Disclosures Committee


      The Disclosures Committee comprises the Chief Executive Officer and at least one
independent non-executive Director. Among other matters, it is responsible for reviewing matters
relating to the regular, urgent and forward looking disclosure of information to Unitholders and
public announcements and circulars. The Disclosures Committee also oversees compliance with
applicable legal requirements (including those relating to GZI REIT’s connected party
transactions) and the continuity, accuracy, clarity, completeness and currency of information
disseminated by the Manager and GZI REIT to the public and applicable regulatory agencies.


Board Meetings


      Board meetings will normally be held at least four times a year at approximately quarterly
intervals. To ensure that Directors will be given sufficient time to consider the issues to be tabled
at the various Board meetings, details of the venue, time and length of the meeting are required
to be given at least 10 clear days in advance of the meeting (except if there are exceptional
circumstances or if the majority of Directors agree to a shorter period of notice).


      No Board meeting, or any adjourned Board meeting, will be quorate unless a simple majority
of Directors for the time being (excluding any Directors which the Manager has a right to exclude
for that purpose, whether pursuant to a contract or otherwise) are present at the time when the
relevant business is transacted. A Director who, whether directly or indirectly, has a material
interest in a contract or proposed contract with the Manager, which is of significance to the
Manager’s business, must declare the nature of his interest either at the earliest Board meeting
or by giving a general notice to the Directors before the question of entering into the contract is
taken into consideration on behalf of the Manager.


      A Director who is prohibited from voting by reason of a conflict of interest will not be counted
for the purposes of establishing the necessary quorum for the meeting.


     Matters to be considered by the Board will be adopted on the basis of a simple majority of
votes.


Appointment and Removal of Directors


      Directors may be nominated for appointment by the Board following a recommendation made
by the Remuneration and Nomination Committee. All Directors will be appointed for specific terms.
One-fourth of the independent non-executive Directors who are subject to retirement by rotation
(if necessary, rounded up to the nearest whole number) will retire at every annual general meeting
from and including the first annual general meeting and the retiring Directors on each occasion will
be those who have been longest in office since their last appointment or re-appointment, but as
between persons who became Directors on the same day, those to retire shall (unless they
otherwise agree among themselves) be determined by lot. Independent non-executive Directors
will be eligible for re-appointment up to a maximum period in office of nine years. There is no
maximum term for other Directors.



                                                 219
                               CORPORATE GOVERNANCE

      The Chairman has been appointed for an initial term of three years. Upon the expiration of
such initial term, he may be re-appointed up to a maximum period in office of six consecutive years
(including the initial term).


     A Director may also be removed from office if served with a notice of removal signed by all
of the other Directors. An outgoing Director must abstain from voting in respect of a resolution
proposed at a Board meeting in respect of the appointment of his successor or his re-appointment.


     Pursuant to the Articles of Association, a Director will need to vacate his office in certain
circumstances, such as in the event that he becomes bankrupt, is convicted of an indictable
offence, has been absent from Directors meetings for six months or more without special leave of
absence from the Board or fails to comply with the required standard set out in any code of conduct
adopted by the Board and the Board resolves that he is thereby disqualified to continue as a
Director.


General Meetings


     GZI REIT will in each year hold a general meeting as its annual general meeting in addition
to any other meetings in that year. The Trustee or the Manager may at any time convene a meeting
of Unitholders. The Manager will also convene a meeting if requested in writing by not less than
two Unitholders registered as together holding not less than 10.0% of the issued and outstanding
Units. At least 21 days’ notice of the meeting will be given to the Unitholders and the notice will
specify the time and place of the meeting and the resolutions to be proposed.


    Two or more Unitholders present in person or by proxy registered as holding not less than
10.0% of the Units for the time being in issue will form a quorum for the transaction of all business,
except for the purpose of passing a Special Resolution. The quorum for passing a Special
Resolution will be two or more Unitholders present in person or by proxy registered as holding not
less than 25.0% of the Units in issue. The quorum for an adjourned meeting shall be such number
of Unitholders who are present in person or by proxy regardless of the number of Units held by
them.


Reporting and Transparency


     GZI REIT will prepare its financial statements in accordance with Hong Kong FRS with a              App B
                                                                                                         B16
financial year-end of 31 December and a financial half-year of 30 June. In accordance with the           B17

REIT Code, the annual report and financial statements for GZI REIT will be published and sent to
Unitholders no later than four months following each financial year-end and the interim results no
later than two months following each financial half-year. In addition, GZI REIT aims to provide
Unitholders with relevant operational information, such as occupancy levels and utilisation rates
of the properties that it holds, along with the publication of such financial results following each
financial year-end and financial half-year.




                                                 220
                               CORPORATE GOVERNANCE

     As required by the REIT Code, the Manager will ensure that public announcements of
material information and developments with respect to GZI REIT will be made on a timely basis in
order to keep Unitholders appraised of the position of GZI REIT. Announcements will be made
either by publishing them in at least one leading Hong Kong English language and one Chinese
language daily newspaper.

Distribution Payments

     The Manager’s policy is to distribute to Unitholders on a semi-annual basis an amount equal
to 100.0% of GZI REIT’s Total Distributable Income for each of FY2006 to FY2008 and thereafter
at least 90.0% of GZI REIT’s annual Total Distributable Income, as more fully described in the
section headed “Distribution Policy” in this Offering Circular.

     (For further details of GZI REIT’s distribution policy, see the section headed “Distribution
Policy” in this Offering Circular.)

Issues of Further Units Post-Listing

      To minimise the possible material dilution of holdings of Unitholders, any further issue of
Units will need to comply with the pre-emption provisions contained in the REIT Code. Such
provisions require that further issues of Units be first offered on a pro rata pre-emptive basis to
existing Unitholders except that Units may be issued: (i) free of such pre-emption rights; (ii) as
consideration for the acquisition of additional real estate; and (iii) free of pre-emption rights in
other circumstances provided that the approval of Unitholders by way of an Ordinary Resolution
is obtained, provided that the number of Units issued under (i) and (ii) shall not exceed an
aggregate maximum in any Financial Year of 20.0% of the number of Units in issue at the end of
the previous Financial Year.

      The Manager and GZI REIT may consider structuring an employee option scheme following
completion of the Global Offering. The adoption of any such scheme will, however, be subject to
approval by the Board and the Unitholders. Subject as set out in the section headed “Connected
Party Transactions” in this Offering Circular, the Manager and GZI REIT will also observe the
restrictions in the REIT Code which prevent issues of new Units to connected persons unless: (i)
specifically approved by Unitholders by way of Ordinary Resolution at a general meeting; and (ii)
an announcement, circular or notice is issued, in each case in accordance with the requirements
set out in the REIT Code.

Interests of, and Dealings in Units by, the Manager as well as Directors and Senior
Management of the Manager

      To monitor and supervise any dealings of Units by Directors and their associates, the
Manager has adopted a code containing rules on dealings by the Directors and associated parties
equivalent to the Model Code for Securities Transactions by Directors of Listed Companies
contained in the Listing Rules. Pursuant to this code, Directors wishing to deal in the Units must
first have regard to Parts XIII and XIV of the SFO with respect to insider dealing and market
misconduct as if these provisions of the SFO applied to the securities of GZI REIT. In addition,



                                                221
                               CORPORATE GOVERNANCE

there are occasions where Directors cannot deal in the Units even though the requirements of the
SFO, if it applied, would not be contravened. In addition, a Director must not make any
unauthorised disclosure of confidential information or make any use of such information for the
advantage of himself or others. The Manager shall be subject to the same disclosure requirements
as the Directors, mutatis mutandis.

     Directors who are aware of or privy to any negotiations or agreements related to intended
acquisitions or disposals which are significant transactions or connected party transactions under
the REIT Code or any price-sensitive information must refrain from dealing in the Units as soon as
they become aware of them or privy to them until proper disclosure of the information in
accordance with the REIT Code and any applicable Listing Rules. Directors who are privy to
relevant negotiations or agreements or any price-sensitive information should caution those
Directors who are not so privy that there may be unpublished price-sensitive information and that
they must not deal in GZI REIT’s securities for a similar period.

     Interests held by Directors and their associates will be published in the annual and interim
reports of GZI REIT. To facilitate this, the Manager has adopted a code containing rules on
disclosure of interests by Directors. The Manager shall be subject to the same dealing
requirements as the Directors, mutatis mutandis.

     The above codes may also be extended to senior executives, officers and other employees
of the Manager or GZI REIT as the Board may determine.

     The Manager has also adopted procedures for monitoring of disclosure of interests by
Directors, the chief executive of the Manager, and the Manager. The provisions of Part XV of the
SFO are deemed by the Trust Deed to apply to, among other things, the Manager, the Directors
and chief executive of the Manager and each Unitholder and all persons claiming through or under
him.

      Under the Trust Deed, Unitholders with a holding of 5.0% or more of the Units in issue will
have a notifiable interest and will be required to notify the Hong Kong Stock Exchange, the Trustee
and the Manager of their holdings in GZI REIT. The Manager shall keep a register for these
purposes and it shall record in the register, against a person’s name, the particulars provided
pursuant to the notification and the date of entry of such record. The said register shall be
available for inspection by the public without charge during such hours as the register of
Unitholders is available for inspection. In addition the Manager shall create a website prior to the
Listing Date and maintain such website for the duration of GZI REIT. The Manager shall cause
copies of all disclosure notices received to be promptly posted to its website. (See the section
headed “The Trust Deed” in this Offering Circular for further details.) The allotment announcement
relating to the Hong Kong Public Offering, currently expected to be made on 20 December 2005,
will include the address of the website created by the Manager.

     Further, the Manager shall publish a notice in one leading Hong Kong English language and
one Chinese language daily newspaper whenever a disclosure notification is made which, in the
opinion of the Manager, is or is likely to require a notice to be published in order to keep
Unitholders and the public adequately informed of material price sensitive information relating to
the ownership of Units.



                                                222
                              CORPORATE GOVERNANCE

Matters to be Decided by Unitholders by Special Resolution


     Pursuant to the Trust Deed, decisions with respect to certain matters require specific prior
approval of Unitholders by way of Special Resolution. Such matters include, among other things,
removing the Trustee, removing the Manager and approving the termination of GZI REIT (see the
section headed “The Trust Deed — Meetings of Unitholders” in this Offering Circular).




                                              223
                                      THE TRUST DEED


 The Trust Deed is a complex document and the following is a summary only. Investors should
 refer to the Trust Deed itself to confirm specific information or for a detailed understanding of
 GZI REIT. The Trust Deed is available for inspection at the registered office of the Manager at
 2102, Yue Xiu Building, 160 Lockhart Road, Wanchai, Hong Kong.


The Trust Deed


     GZI REIT is a Hong Kong real estate investment trust constituted by the Trust Deed and is           App B
                                                                                                         B1
authorised by the SFC pursuant to the SFO.


      The Trust Deed was entered into on 7 December 2005 between GZI REIT Asset Management               App B
                                                                                                         B1
Limited as the manager of GZI REIT and HSBC Institutional Trust Services (Asia) Limited as the
trustee of GZI REIT.


     The terms and conditions of the Trust Deed and any supplemental deed are binding on the
Trustee and the Manager, who are signatories thereto, as well as each Unitholder (and persons
claiming through or under such Unitholder) as if such Unitholder had been a party to and had
executed the Trust Deed and any supplemental deed and had thereby covenanted for such
Unitholder and for all such persons to observe and be bound by the provisions of the Trust Deed
and had thereby authorised and required the Trustee and the Manager, respectively, to do all such
acts and things as the Trust Deed may require or authorise the Manager and the Trustee,
respectively, to do.


     The REIT Code requires the Trust Deed to include certain provisions that relate to the rights,
duties and obligations of the Manager, the Trustee and the Unitholders.


The Units and Unitholders


     The rights and interests of Unitholders are set out in the Trust Deed. Under the Trust Deed,
the Trustee must exercise all due diligence and vigilance in carrying out its functions and duties
and in protecting the rights and interests of Unitholders.


     The beneficial interest in GZI REIT is divided into Units. However, a Unitholder is not entitled
to the transfer to it of any asset (or any part thereof) or of any estate or interest in any asset (or
any part thereof) of GZI REIT.


Core Requirements


     Under the terms of the Trust Deed, the assets of GZI REIT may be invested in:


     •    real estate as permitted under the REIT Code;


     •    cash and cash equivalent items;



                                                 224
                                      THE TRUST DEED

     •    shares in the issued share capital of any Special Purpose Vehicle established or to be
          established at the direction of the Manager and any goodwill and other intangible assets
          acquired in relation to the acquisition of Special Purpose Vehicles;


     •    any other assets or investments as permitted by the REIT Code from time to time; and


     •    arrangements for the purposes of enhancing the return on, or reducing the risks
          associated with the investments of GZI REIT, including investments in the form of
          derivative instruments for hedging purposes.


       GZI REIT may not invest in vacant land or engage or participate in any property development
activities. Further, GZI REIT may not acquire any asset which involves the assumption of unlimited
liability unless where such liability arises from the use of derivative instruments for the purpose of
hedging.


     GZI REIT may not lend assume, guarantee, endorse or otherwise become directly or
contingently liable for the obligation or indebtedness of any person nor shall it use any assets of
GZI REIT to secure any obligations, liabilities or indebtedness without the prior written consent of
the Trustee.


      GZI REIT may legally and beneficially acquire and own the issued share capital of any
company incorporated in or outside Hong Kong if the Manager considers it necessary or desirable
for GZI REIT to incorporate or acquire an entity whose primary purpose is to hold or own real
estate or arrange financing for GZI REIT or to hold other Special Purpose Vehicles provided that
GZI REIT has majority ownership and control of the Special Purpose Vehicle and there are
sufficient and proper safeguards in the relevant shareholders’ agreement relating to the Special
Purpose Vehicle to address the risks arising from the non-wholly owned structure, and such
investment is not in conflict with the Trust Deed, the REIT Code and applicable law.


      As and to the extent required by the REIT Code, the Manager shall ensure that GZI REIT
shall incorporate or acquire no more than two layers of Special Purpose Vehicles in respect of any
investment and, in the case of two layers of Special Purpose Vehicles, the top layer Special
Purpose Vehicle shall be incorporated solely for the purpose of holding the legal and beneficial
interests in one or more other Special Purpose Vehicles established for the sole purpose of directly
or indirectly holding real estate and/or arranging financing for GZI REIT.


     The Manager shall ensure that neither the memorandum or articles of association or
equivalent constitutional documents of the Special Purpose Vehicles nor the organisation,
transactions or activities of such vehicles contravene any requirements of the REIT Code or the
Trust Deed.


    As and to the extent required by the REIT Code, the Manager shall have responsibility for the
management of the assets held by any Special Purpose Vehicles. The Trustee shall appoint and
remove directors of those Special Purpose Vehicles that it has a right to do so in accordance with



                                                 225
                                       THE TRUST DEED

the directions of the Manager. The Trustee is responsible for ensuring that each Special Purpose
Vehicle appoints the same auditor and adopts the same accounting principles and policies as GZI
REIT.

       GZI REIT is required by the REIT Code to hold good marketable legal and beneficial title in
all its real estate whether held directly or indirectly through Special Purpose Vehicles controlled by
GZI REIT. The Manager is under an obligation to ensure that GZI REIT has a majority (more than
50.0%) ownership and control over each investment in real estate at all time. Any investment in
real estate by GZI REIT is subject to a number of conditions including the Manager being able to
demonstrate that the investment is in the interest of Unitholders, obtaining a legal opinion,
undertaking proper due diligence, ensuring that any liability assumed does not exceed the
percentage interest in the real estate being acquired and appropriate disclosures being made to
Unitholders as specified in the REIT Code.


Deemed Application of Part XV of the Securities and Futures Ordinance

      The Trust Deed deems the provisions of Part XV of the SFO, and all relevant guidelines and
interpretation notes on Part XV of the SFO issued by the SFC from time to time, to have effect,
mutatis mutandis, and binding on the Trustee, the Manager, the directors and chief executive of
the Manager and on each Unitholder and all persons claiming through or under each such person
(including, without limitation, each participant of CCASS to whose account any Units are for the
time being credited by Hong Kong Securities Clearing Company Limited) as if:


     (a)   GZI REIT is a “listed corporation” for the purposes of Part XV of the SFO;

     (b)   the references in Part XV of the SFO to the “relevant share capital” of such listed
           corporation were references to:

           (i)    any of the issued and outstanding Units from time to time; and


           (ii)   any Units which the Manager has agreed to issue, either conditionally or
                  unconditionally, from time to time;

     (c)   a Unit is a share comprised in the relevant share capital of such listed corporation and
           the Unitholder of a Unit is the holder of a share in the relevant share capital of such
           listed corporation;

     (d)   the Manager and the Directors and chief executive of the Manager shall be deemed to
           be the directors and chief executive respectively of such listed corporation;


     (e)   in addition and without prejudice to any notification required to be given to the Hong
           Kong Stock Exchange by virtue of the deemed application of Part XV of the SFO, any
           notification with respect to interests in Units required to be given to the listed corporation
           under the SFO shall be given by the relevant parties to the Trustee and the Manager;
           and



                                                  226
                                      THE TRUST DEED

     (f)   the powers and duties of a “listed corporation” under Division 5 of Part XV of the SFO
           in relation to the Trust shall be exercisable or carried out by GZI REIT and the Manager
           provided that the relevant power shall primarily be exercised by or the primary duty shall
           be carried out by the Manager save where the interest or short position (or deemed
           interest or deemed short position) relates to Units held by or in which the Manager is
           interested or has a short position, in which case the relevant power shall primarily be
           exercised by or the duty shall be carried out by the Trustee to the exclusion of the
           Manager.

      Part XV of the SFO (which is deemed to apply to the Units by the Trust Deed) contains
provisions which clarify when a person (whether or not a Unitholder) will be deemed to have an
interest in Units or a short position in Units for the purposes of determining whether or not an
obligation to make disclosure has arisen.

     If a person (whether or not a Unitholder) fails to comply with such notification requirements,
the Trustee and the Manager may, in its absolute discretion, declare that the voting rights attached
to any or all of the Units in which that person is or is deemed to be interested in (the “Affected
Units”) be suspended, suspend the payment of any distributions in respect of such Units, impose
an administrative fee of up to HK$0.10 per Affected Unit for each day of non-compliance (from the
date on which disclosure is due to be made by the person) on such Units and/or suspend
registration and/or decline to register any transfer of part or all of such Units. The Trustee or the
Manager may require any person to give such information as may be required by the Manager to
identify the information relevant to the day of disclosure as described above.

      Investors are urged to familiarise themselves with the provisions in relation to their duty of
disclosure in the Trust Deed and the deemed application of Part XV of the SFO. Notification of
interests must be made in the form prescribed by the Manager.

Issue of Units and Issue Price

     The Units will be listed and quoted in Hong Kong dollars. The following is a summary of the        App B
                                                                                                        B8
provisions of the Trust Deed relating to the issue of Units.

     The Manager has the exclusive right to effect for the account of GZI REIT, the creation and
issue of Units. The issue of Units on the Listing Date for the purpose of the Global Offering shall
be at an issue price determined on the basis disclosed in this Offering Circular.

     No fractions of a Unit shall be issued. In issuing such number of Units as correspond to the
relevant subscription proceeds, the Manager shall in respect of each Unitholder’s entitlement to
Units truncate (but not round off) to the nearest whole Unit and any balance arising from such
truncation shall be retained as part of the Deposited Property.

     After the Listing Date, new Units may be offered on a pro rata basis to all existing Unitholders
without the prior approval of Unitholders other than where any such issue increases the market
capitalisation of GZI REIT by more than 50.0%, in which case such issue shall require the prior
approval of Unitholders by Ordinary Resolution at a meeting to be convened by the Manager in
accordance with the provisions of the Trust Deed.



                                                227
                                       THE TRUST DEED

     Subject to restrictions on issues to connected persons, Units may be offered after the Listing
Date, otherwise than on a pro rata basis to all existing Unitholders, without the approval of
Unitholders if the issue of new Units during any Financial Year does not increase the total number
of Units from the number of Units that were outstanding at the end of the previous Financial Year
by more than 20.0% (or such other percentage of outstanding Units as may, from time to time, be
prescribed by the SFC). An issue of new Units exceeding this threshold will require specific prior
approval of Unitholders by Ordinary Resolution at a meeting to be convened by the Manager in
accordance with the provisions of the Trust Deed.


    After the Listing Date, and for so long as GZI REIT is listed on the Hong Kong Stock
Exchange, the Manager may (with the approval of Unitholders, if required) effect the issue of Units
on behalf of GZI REIT on any Business Day at an issue price that is equal to the Market Price or,
in its discretion, at a discount of no more than 20.0% to the Market Price or at a premium to the
Market Price. For this purpose, “Market Price” shall mean the price as determined by the Manager,
being the higher of:


     (a)   the closing price of the Units on the Hong Kong Stock Exchange on the date of the
           relevant agreement for the proposed issue of Units; and


     (b)   the average closing price of the Units in the ten trading days of the Hong Kong Stock
           Exchange immediately prior to the earliest of:


           (i)    the date of announcement of the proposed issue of Units;


           (ii)   the date of the relevant agreement for the proposed issue of Units; and


           (iii) the date on which the issue price is fixed,


provided that, in relation to the issue of Units pursuant to an exercise of an option to subscribe for
Units, the Market Price and issue price may be determined by the Manager either at the time of
grant of the option or at the time of exercise of the option or such other date(s) as the Manager
considers appropriate subject to the terms of the grant of such option. In relation to the issue of
Units other than on exercise of an option, the Market Price and the issue price shall be determined
by the Manager on such date(s) as the Manager considers appropriate.


Repurchase of Units by the Manager


     Other than in respect of any stabilising activity, the Trust Deed does not permit the Manager
to repurchase Units on behalf of GZI REIT until permitted to do so by the relevant codes and
guidelines issued by the SFC from time to time.




                                                 228
                                       THE TRUST DEED

Rights and Liabilities of Unitholders

     The key rights of Unitholders include rights to:

     (a)   receive income and other distributions attributable to the Units held;

     (b)   receive the audited financial statements of GZI REIT; and

     (c)   participate in the distribution of assets on the termination of GZI REIT by receiving a
           share of all net cash proceeds derived from the sale or realisation of the assets of GZI
           REIT less any liabilities, in accordance with their proportionate interests in GZI REIT at
           the date of the termination of GZI REIT in accordance with the provisions of the Trust
           Deed.

     The Trust Deed contains provisions that are designed to limit the liability of a Unitholder to
the amount paid or payable for any Unit. The provisions seek to ensure that if the Issue Price of
the Units held by a Unitholder has been fully paid, no such Unitholder, by reason alone of being
a Unitholder, will be personally liable to indemnify the Trustee or the Manager or any creditor of
GZI REIT in the event that the liabilities of GZI REIT exceed its assets.

     The minimum number of Units of which a person may be a registered holder is one Unit.

Amendment of the Trust Deed

    The Trustee and the Manager may, with the prior approval of the SFC (where required),
amend the Trust Deed in such manner and to such extent as they may consider expedient for any
purpose, provided that:

     (a)   unless the Trustee shall certify in writing that, in its opinion, such amendment:

           (i)    does not materially prejudice the interests of Unitholders, does not operate to
                  release to any material extent the Trustee or the Manager from any responsibility
                  to the Unitholders and does not increase the costs and charges payable from GZI
                  REIT;

           (ii)   is necessary in order to comply with applicable fiscal, statutory or official
                  requirements (whether or not having the force of law); or

           (iii) is necessary to correct a manifest error,

           no such amendment shall be made without Unitholders’ approval by Special Resolution;
           and

     (b)   no such amendment shall impose upon any Unitholder any obligation to make any
           further payments in respect of its Units or to accept any liability in respect thereof.



                                                 229
                                      THE TRUST DEED

Meetings of Unitholders


     Under applicable law and the provisions of the Trust Deed, the Manager will at least once in
every calendar year convene a general meeting of Unitholders as the annual general meeting.


     In addition, the Trustee or the Manager may respectively (and the Manager shall, at the
request in writing of not less than two Unitholders registered as together holding not less than
10.0% of the Units for the time being in issue and outstanding) at any time convene a meeting of
Unitholders at such time or place in Hong Kong in accordance with the provisions of the Trust
Deed.


     A meeting of Unitholders when convened may, by Special Resolution and in accordance with
the Trust Deed:


     (a)   sanction any modification, alteration or addition to the Trust Deed which shall be agreed
           by the Trustee and the Manager as provided in the Trust Deed;


     (b)   remove the Trustee;


     (c)   remove the Manager;


     (d)   approve the disposal of an investment within two years from the date of its acquisition;


     (e)   approve the termination of GZI REIT;


     (f)   approve the merger of GZI REIT;


     (g)   change the investment objective and policies of GZI REIT; and


     (h)   approve any change to the maximum fees under the Trust Deed which are payable to
           the Trustee or the Manager, or any change to the structure of the Trustee’s or Manager’s
           fees.


     Any decision to be made by resolution of Unitholders other than the above shall be made by
Ordinary Resolution, unless a Special Resolution is required by the REIT Code or the provisions
of the Trust Deed.


     Except as otherwise provided for in the Trust Deed, at least 21 days’ notice (exclusive of the
day on which the notice is served or deemed to be served and of the day for which the notice is
given) of every meeting shall be given to the Unitholders in the manner provided in the Trust Deed.
Each notice shall specify the place, day and hour of the meeting, and the terms of the resolutions
to be proposed. A copy of the notice shall be sent by post to the Trustee, unless the meeting is
convened by the Trustee in which case a copy of the notice shall be sent by post to the Manager.
The quorum at a meeting shall be two or more Unitholders present in person or by proxy registered



                                                230
                                      THE TRUST DEED

as holding together not less than 10.0% of the Units for the time being in issue and outstanding
except for the purpose of passing a Special Resolution, in which case, the quorum shall be two or
more Unitholders present in person or by proxy registered as holding together not less than 25.0%
of the Units for the time being in issue and outstanding.

     Voting on resolutions at a meeting shall be by way of a poll. Every Unitholder has one vote
for each Unit it owns provided such Unit is fully paid up. However, a Unitholder is prohibited from
voting his/her own Unit(s) at, or being counted in the quorum for, a meeting at which he/she has
a material interest in the business to be conducted and that interest is different from the interests
of other Unitholders as determined by the Manager or the Trustee in accordance with the
provisions of the Trust Deed. The Trust Deed does not contain any limitation on non-Hong Kong
residents or foreign Unitholders holding Units or exercising the voting rights with respect to their
unitholdings.

Trustee’s Powers and Duties

     Under the Trust Deed, the powers and duties of the Trustee include:

     •    upon directions by the Manager, acquiring property on behalf of GZI REIT in accordance
          with the powers of investment contained in the Trust Deed;

     •    holding the Deposited Property on trust for the benefit of the Unitholders, and oversee
          the activities of the Manager for compliance with, among others, the Trust Deed; and

     •    ensuring that all the investment activities carried out by the Manager are in line with the
          investment objective and policy of GZI REIT, and are in the interests of the Unitholders.

     The Trustee shall exercise all due diligence and vigilance in carrying out its functions and
duties, and in protecting the rights and interests of Unitholders.

     The Trustee may, upon the Manager’s direction, arrange and incur liabilities and obligations
on behalf of GZI REIT (and so as to bind the Deposited Property), and to create and grant security
of any form or nature for or in respect of such liabilities and obligations and to perform and
discharge such liabilities and obligations from Deposited Property on behalf of GZI REIT, in all
cases subject to the restrictions under applicable law and in the REIT Code and the Trust Deed.

     The Trustee may also appoint an agent to exercise all or any of the trusts, powers and
discretions vested in it by the Trust Deed and such delegation or appointment of an agent as may
be made subject to any regulation and on terms and conditions (including power to sub-delegate)
as the Trustee thinks fit provided that the Trustee may not make any such delegation or
appointment of an agent without the prior written approval of the Manager.

     Although the Trustee may, upon the Manager’s instructions, borrow or raise money for the
purposes of GZI REIT, both on a secured and unsecured basis, the Manager must not direct the
Trustee to incur a liability if upon the effecting of such borrowing or raising the amount thereof,
together with the aggregated amount of all other raisings or borrowings made by the Trustee for



                                                231
                                      THE TRUST DEED

the account of GZI REIT and still remaining to be repaid, would thereupon in the aggregate exceed
45.0% (or such other higher or lower percentage as may be permitted by the REIT Code or as may
be specifically permitted by the relevant authorities) of the total gross asset value of the Deposited
Property as set out in GZI REIT’s latest published audited financial statements immediately prior
to such borrowing being effected (subject to adjustments contemplated by the Trust Deed).


Trustee’s Right to Reimbursement


     The Trustee is entitled to apply, or to be reimbursed from, the Deposited Property (at such
times and over such periods as the Trustee and the Manager may determine in any particular
case) for all liabilities, as agreed with the Manager, that may be properly suffered or incurred by
the Trustee in the performance of its obligations or the exercise of its powers under the Trust Deed,
or otherwise arising out of or in connection with, among others, the Trust Deed.


Limitation of Trustee’s Liability


    In the absence of fraud, negligence, wilful default, breach of, among other things, the Trust
Deed, the REIT Code or any applicable law, the Trustee shall not be in any way responsible to GZI
REIT, the Unitholders, the Manager or any person for any loss, costs, damage or inconvenience
that may result from the exercise or non exercise of its powers.


     The Trustee shall have no liability for any act or omission of the Manager, the Unit Registrar,
any Approved Valuer or any Special Purpose Vehicle or any directors of the foregoing.


     In the absence of fraud, negligence, wilful default or breach of, among other things, the Trust
Deed, the REIT Code or any applicable law and regulation by the Trustee (including its directors,
employees, agents and delegates) the liability of the Trustee shall not exceed the amount of the
Deposited Property to which the Trustee shall have recourse to meet any such liability.


Trustee’s Right of Indemnity


      The Trustee and any director, employee and servant of the Trustee shall be indemnified out
of, and shall be entitled for the purpose of indemnity to have recourse to, the Deposited Property
or any part thereof against any actions, costs, claims, damages, expenses or demands to which
it may be put as Trustee and as director, employee and servant of the Trustee save where such
action, cost, claim, damage, expense or demand is occasioned by the fraud, negligence, wilful
default or breach of, trust, the Trust Deed (or other constitutive documents to which the Trustee
is a party), the REIT Code or any applicable law by the Trustee and any director, employee,
servant, agent or delegate of the Trustee.




                                                 232
                                         THE TRUST DEED

Retirement and Replacement of Trustee

     The Trustee may retire or be removed in the following circumstances:

     (a)   The Trustee may retire by giving written notice to the Manager, but only upon the
           appointment (with, for so long as GZI REIT is authorised by the SFC, the prior written
           consent of the SFC) of a new trustee (such appointment to be made in accordance with
           the provisions of the Trust Deed).

     (b)   The Trustee may be removed by prior notice in writing to the Trustee by the Manager:

           (i)     if the Trustee goes into liquidation (except a voluntary liquidation for the purpose
                   of reconstruction or amalgamation upon terms previously approved in writing by
                   the Manager) or if a receiver is appointed over any of its assets or if a judicial
                   manager is appointed in respect of the Trustee (or any such analogous process
                   occurs or any analogous person is appointed in respect of the Trustee);

           (ii)    if the Trustee ceases to carry on business;

           (iii) if the Trustee fails, or neglects after reasonable notice from the Manager, to carry
                 out or satisfy any material obligation imposed on the Trustee by the Trust Deed, in
                 which case the removal of the Manager requires 30 days’ prior notice in writing to
                 the Trustee by the Manager; or

           (iv) if for good and sufficient reason(s), the Manager states in writing that a removal of
                the Trustee is in the best interests of Unitholders and the Unitholders consent to
                such removal by Special Resolution (excluding any Units held by any connected
                person of the Trustee or any other Unitholders who has an interest in retaining the
                Trustee (determined at the sole discretion of the Manager)).

Trustee’s Fee

     GZI REIT will pay the Trustee a one-off inception fee of not more than HK$200,000 (as
agreed between the Manager and the Trustee) and, in each Financial Year, an ongoing fee of
0.03% per annum of the value of the Deposited Property (which may be increased to a maximum
of 0.06% per annum of the value of the Deposited Property), subject to a minimum amount of
HK$50,000 per month. Such remuneration of the GZI REIT shall be payable out of the Deposited
Property semi-annually in arrears on the first Business Day following the end of the relevant six
month period and calculated as follows:


                 ( 0.03%2x VDP )
                               s
     SAF =


     where:

     SAF = semi-annual fee



                                                   233
                                      THE TRUST DEED

     VDP s = the value of the Deposited Property as per the published audited annual financial
     statements of GZI REIT for the immediately preceding Financial Year, provided that the value
     of VDP s for the first Financial Year shall be the value of the consolidated gross assets of GZI
     REIT as disclosed in this Offering Circular.

      The ongoing fee calculated in accordance with the above formula is subject to adjustment as
follows:

                                 adjustment = 0.03% x VDPE - SSAF

     where:

     VDP E = the value of Deposited Property as per published audited annual financial statements
     of GZI REIT for the Financial Year; and

     SSAF = the sum of the semi-annual ongoing fees received by the Trustee in respect of the
     relevant Financial Year.

      Where the above adjustment is positive, GZI REIT shall pay the difference to the Trustee
following publication of the audited annual financial statements of GZI REIT. Where the above
adjustment is negative, the Trustee shall pay the difference to GZI REIT following publication of
audited annual financial statements of GZI REIT for the relevant Financial Year. For the avoidance
of doubt, the above adjustment shall not affect the minimum ongoing fee of HK$50,000 per month.

    The ongoing fee of the Trustee for the first Financial Year shall be pro-rated according to the
number of days between the Listing Date and 31 December 2005.


     The Trustee and the Manager may, by giving not less than three months’ prior written notice
to Unitholders, increase the rate of the ongoing fee up to and including the maximum percentage
of 0.06% per annum of the value of the Deposited Property without obtaining Unitholders’
approval. Any increase in the maximum rate of the ongoing fee or any change to the structure of
the Trustee’s remuneration may only be permitted by Special Resolution at a Unitholders’ meeting
convened in accordance with the provisions of the Trust Deed.

Termination of GZI REIT

      GZI REIT shall terminate without Unitholders’ approval in the event that the Units are not        D17(a)
                                                                                                        App B
listed on the Hong Kong Stock Exchange by 31 December 2005 (or such later date as may be                B29

agreed in writing by the Manager and Trustee). Otherwise, GZI REIT shall continue until the
expiration of eighty years less one day from the date of commencement of GZI REIT, being 7
December 2005, or until it is wound up by a court order or is terminated in the manner described
below or as set out in the sub-section headed “Merger of GZI REIT” below.

     Under the provisions of the Trust Deed, GZI REIT may be terminated by Special Resolution
of the Unitholders in accordance with the provisions in the Trust Deed.



                                                234
                                      THE TRUST DEED

      Where the proposal to terminate GZI REIT is recommended by the Manager, the Manager
and its connected persons shall abstain from voting if they hold interests in the Units and if their
interest (at the sole determination of the Trustee) in terminating GZI REIT is different from that of
all other Unitholders, except where the Manager and its connected persons are the only
Unitholders. The Trustee shall have no liability for any consequence arising out of such termination
recommended by the Manager and approved by Special Resolution in the absence of fraud, bad
faith, wilful default or negligence. The Manager shall inform Unitholders as soon as reasonably
practicable of the intention to terminate GZI REIT by way of announcement.


    The Manager shall serve on the Unitholders, within 21 days of the announcement referred to
above, a circular convening an extraordinary general meeting containing the following information:


     (a)   the rationale for the termination of GZI REIT;


     (b)   the effective date of the termination;


     (c)   the manner in which the Deposited Property is to be dealt with;


     (d)   the procedures and timing for the distribution of the proceeds of the termination;


     (e)   a valuation report of GZI REIT prepared by the Approved Valuer (as defined in the Trust
           Deed);


     (f)   the estimated costs of the termination and the bearer of such costs; and


     (g)   such other material information that the Manager determines that the Unitholders should
           be informed of.


      Upon approval of the termination of GZI REIT, the Trustee shall oversee the realisation of the
assets of GZI REIT by the Manager. Following such disposal and the distribution of the proceeds
(if any) thereof, GZI REIT shall terminate.


     In the event that the Manager is removed or retires and no new manager duly qualified under
the REIT code and acceptable to the SFC is willing to take the place of the existing Manager within
60 Business Days of the removal or retirement of the Manager (or such longer period the Trustee
considers appropriate), the Trustee may terminate GZI REIT.




                                                235
                                       THE TRUST DEED

Merger of GZI REIT                                                                                         App B
                                                                                                           B30


     GZI REIT can be merged subject to Unitholders’ approval by Special Resolution.


      Where the proposal to merge GZI REIT is recommended by the Manager, the Manager and
its connected persons shall abstain from voting if they hold interests in the Units and if their
interest (at the sole determination of the Trustee) in merging GZI REIT is different from that of all
other Unitholders. Where upon such merger the Trustee retires, any deed effecting the merger by
which the Deposited Property and liabilities of GZI REIT are so merged shall include
indemnification of the Trustee to its satisfaction. The Trustee shall cease to be liable for obligations
and liabilities of GZI REIT subsisting at the time of merger to the extent such obligations and
liabilities are subsequently discharged from and out of the merged entity, and shall have no other
liability for the consequences arising out of any merger of GZI REIT recommended by the Manager
and approved by Special Resolution (other than any liability arising from the fraud, wilful default,
bad faith or negligence of the Trustee). The Manager shall inform Unitholders as soon as
reasonably practicable of the intention to merge GZI REIT by way of announcement.


    The Manager shall serve on the Unitholders within 21 days of the announcement referred to
above, a circular convening an extraordinary general meeting containing the following information:


     (a)   the rationale for the merger of GZI REIT;


     (b)   the effective date of the merger;


     (c)   the manner in which the Deposited Property is to be dealt with;


     (d)   the procedures and timing for the issuance or exchange of new Units arising from the
           merger;


     (e)   a valuation report of GZI REIT prepared by an Approved Valuer (as defined in the Trust
           Deed) which is not dated more than three months before the date of the circular;


     (f)   the estimated costs of the merger and the bearer of such costs; and


     (g)   such other material information that the Manager determines that the Unitholders should
           be informed of.


       Any merger pursuant to the provisions of the Trust Deed may only take effect upon the
successor entity assuming responsibility for the performance and discharge of all obligations and
liabilities of GZI REIT subsisting at the time of the merger.




                                                  236
  MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT


 The agreements described in this section are complex documents and only a summary of the
 agreements is set out herein. Investors should refer to the agreements themselves to confirm
 specific information or for a detailed understanding of GZI REIT. The agreements are available
 for inspection at the registered office of the Manager at 2102, Yue Xiu Building, 160 Lockhart
 Road, Wanchai, Hong Kong during normal business hours until noon of 15 December 2005,
 which is the date on which the application lists close.


Reorganisation Deed                                                                                App B
                                                                                                   B2 (f)


    On 7 December 2005, Holdco, the Manager and the Trustee entered into the Reorganisation
Deed with GCCD BVI (as vendor) and GZI (as guarantor of GCCD BVI’s obligations under the
Reorganisation Deed), pursuant to which Holdco acquired 100.0% of the issued share capital of
each of the BVI Companies.


  Initial Consideration


   The Initial Consideration payable by Holdco under the Reorganisation Deed for the BVI
Company Shares was HK$4,014,180,000 (but is subject to adjustment as described in the
subsection headed “Adjustments” below). The Initial Consideration was calculated based on the
combined NAV of the BVI Companies as at 31 October 2005 of HK$2,972,767,000 plus amounts
due to fellow subsidiaries thereof as at 31 October 2005 of HK$994,267,000 as well as
HK$47,146,000 to be injected by GZI into the BVI Companies before the closing of the Global
Offering.


    Completion of the transfer of the BVI Company Shares to Holdco took place on 7 December
2005.


     The Initial Consideration was satisfied in the following manner:


     •    as to HK$1,137,234,060, by the issue of 417,000,000 Units in GZI REIT to Dragon Yield,
          a wholly owned subsidiary of GZI, the party nominated by GCCD BVI to receive the
          Units, at an issue price of HK$2.72718 each; and


     •    as to HK$2,876,945,940, by the execution and delivery of the Promissory Note by
          Holdco to GZI.


  Adjustments


  Initial adjustment


    The Initial Consideration is subject to an initial adjustment calculated and adjusted in the
manner described below.



                                              237
  MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

     The initial adjustment amount will be calculated as A - B:


     where “A” is the sum of:


     1.   the IPO Proceeds (being the gross proceeds from the issue of Units under the Global
          Offering, which, for the avoidance of doubt, excludes proceeds from the Units
          comprised in the Over-allocation Option and the proceeds from the Sale Units);


     2.   HK$1,137,234,060 (being the portion of the Initial Consideration satisfied by the issue
          of Units to GCCD BVI or its nominee); and


     3.   the Loan Proceeds (less any costs relating to the Facility Agreement agreed between
          GCCD BVI and Holdco),


     and “B” is the sum of:


     1.   the Initial Consideration;


     2.   the IPO Transaction Costs;


     3.   the aggregate amount to be collected by White Horse Property Management Company
          from the tenants of the White Horse Units under their tenancy agreements attributable
          to Partat in respect of the period from the Listing Date to 31 December 2005 (both dates
          inclusive) of HK$189,600 per day; and


     4.   HK$26,700,000, being an amount retained by Holdco for proposed renovation works at
          the White Horse Units.


     The amount determined in accordance with the formula above shall be paid:


     •    by Holdco to GCCD BVI or its nominee on or about the Listing Date, if such amount is
          a positive figure; and


     •    by GCCD BVI to Holdco on the Listing Date, if such amount is a negative figure. Such
          payment by GCCD BVI to Holdco shall be effected by way of setting off the relevant
          amount against the principal amount of the Promissory Note so that the amount payable
          by Holdco to GZI pursuant to the terms of the Promissory Note shall be the amount
          representing the difference between the principal amount of the Promissory Note and
          the amount calculated in accordance with the above formula.


      The main purpose of the initial adjustment amount is to ensure that the Initial Consideration
reflects the value of the Properties implied by the Offer Price attributable to GCCD BVI.



                                               238
   MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

  Combined net assets adjustment


      The Initial Consideration is subject to a further adjustment in accordance with the increase
or reduction in the combined net assets of the BVI Companies in the interval from the date of the
Reorganisation Deed until the day immediately preceding the Listing Date, excluding (i) any
fluctuations in the value of the Properties; (ii) any costs incurred in connection with the Global
Offering and the Facility Agreement; and (iii) any other matter already taken into consideration in
calculating the initial adjustment referred to above, and adopting the same accounting policies,
principles, standards and practices.


     Such change in the combined net assets of the BVI Companies will be determined based on
the unaudited combined management accounts of the BVI Companies as at 7 December 2005
(being the date of the Reorganisation Deed) and the audited combined accounts of the BVI
Companies as at the day immediately preceding the Listing Date.


     If there is an increase in the combined net assets of the BVI Companies, the amount of the
increase shall be paid by Holdco to GCCD BVI or its nominee within four months after the Listing
Date. If there is a decrease in the combined net assets of the BVI Companies, the amount of the
decrease shall be paid by GCCD BVI to Holdco within four months after the Listing Date.


  Final consideration


    The final consideration after the adjustments described above shall be announced by the
Manager upon determination thereof, together with the quantum of the adjustment amounts.


Warranties, representations and undertakings


     Under the Reorganisation Deed, Holdco, the Trustee and the Manager have the benefit of
certain representations, warranties and undertakings (“Warranties”) given by GCCD BVI and
guaranteed by GZI.


     The Warranties give Holdco, the Trustee and the Manager a degree of comfort in relation to
matters such as the assets and liabilities of the BVI Companies, the state of affairs of the business
of the BVI Companies, title to the BVI Company Shares, title to the Properties, the absence of
undisclosed liabilities attaching to the BVI Companies and certain other matters. All of the
Warranties are given subject to the disclosures made by GCCD BVI or GZI to Holdco or the
Manager (including, but not limited to those set out in this Offering Circular), are subject to certain
limitations and will expire (i) six years after the Listing Date (in the case of Warranties relating to
the BVI Company Shares, taxation, title to assets, the Properties and certain miscellaneous
matters) and (ii) 24 months after the Listing Date in all other cases. The periods of the Warranties
will be extended for an additional 12 months where there is a dispute being settled with a third
party or where there is a contingent claim.




                                                 239
   MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

      After the expiry of such periods, none of Holdco, the Trustee and the Manager will have any
further recourse against either GCCD BVI or GZI under the Reorganisation Deed and risks
associated with the acquisition of the BVI Company Shares (including, without limitation, in
relation to title to the Properties) will be solely for the account of GZI REIT.


     Separately, the Trustee has the benefits of certain representations and warranties given by
GZI in respect of the due incorporation and status of Holdco. The Reorganisation Deed also
includes an undertaking by GZI that for so long as any Loan Proceeds remain unpaid, GZI shall
hold, directly or indirectly, at least 15.0% of all Units in issue at any time.


     The aggregate maximum liability of GCCD BVI and GZI in respect of all and any claims under
the Warranties as well as any claims made by Holdco and/or the Manager under or in connection
with the Deed of Indemnity shall in no event exceed the final consideration referred to above.


     The adjustments to the Initial Consideration, GZI’s guarantee to Holdco, the Manager and the
Trustee, as well as GCCD BVI’s Warranties are conditional on the Listing Date being on or before
21 December 2005 (or such other date as may be agreed in writing by Holdco, the Manager,
GCCD BVI and GZI).


Deed of Indemnity


      GCCD BVI and GZI executed the Deed of Indemnity in favour of Holdco (for itself and as
trustee for each of the BVI Companies), the Manager and the Trustee under which GCCD BVI and
GZI undertook jointly and severally to indemnify Holdco and each BVI Company against all or any
depletion or reduction in the value of their respective assets, or increase in the liabilities, loss or
deprivation of any relief from taxation, of Holdco or any of the BVI Companies, as a result of or in
connection with any claim by any revenue, customs, fiscal, statutory, governmental or other
authority of the PRC or in any other part of the world, including but not limited to:


     •    the amount of any and all taxation falling on Holdco or any of the BVI Companies or in
          respect of the Properties resulting from or by reference to any income, profits, gains,
          transactions, events, matters or things earned, accrued, received, effected on or before
          the Listing Date, whether alone or in conjunction with any other circumstances
          whenever occurring and whether or not such taxation is chargeable against or
          attributable to any other person, firm or company, including any and all taxation resulting
          from the receipt by Holdco or any of the BVI Companies of any amounts paid by GCCD
          BVI or GZI under the Deed of Indemnity;


     •    the amount of any and all fines or penalties imposed on Holdco or any of the BVI
          Companies by any revenue, customs, fiscal, statutory or governmental or other
          authority whatsoever in the PRC and any loss or damage suffered by Holdco or any of
          the BVI Companies resulting from:


          —     failure to stamp and/or register any tenancies in respect of the Properties;



                                                 240
   MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

          —     any non-conformity of the Properties (or any part thereof) with applicable building
                regulations and/or any requirement to rectify any such non-conformities;

          —     any issues arising from or in connection with any pre-emptive rights of the tenants
                of the Properties in relation to the Properties;

          —     leasing the Properties for uses which are not in compliance with the permitted uses
                thereof under the relevant Building Ownership Certificates or deeds of mutual
                covenant;

          —     any issues in connection with any extension areas in the White Horse Building of
                which the White Horse Units form part;

          —     any issues arising from or in connection with the proposed renovation of the 8th
                and 9th storeys of White Horse Building to wholesale and retail use; or

          —     any non-conformity issues referred to in the Independent Property Valuer’s
                Building Condition Survey Summary Report set out in Appendix VII to this Offering
                Circular;

     •    the amount of any and all taxation, fines, penalties, losses and damages resulting from
          the transfer of the Properties to the BVI Companies or any transactions effected on or
          before the Listing Date; and

     •    all actions, claims, losses, damages, costs (including all legal costs), charges,
          expenses, interests, penalties or other liabilities which Holdco or any of the BVI
          Companies may reasonably and properly incur in connection with:

          —     the investigation, assessment or the contesting of any such claim;

          —     the settlement of any such claim;

          —     any legal proceedings in which Holdco or any of the BVI Companies claims under
                or in respect of the Deed of Indemnity and in which judgment is given in favour of
                Holdco or any of the BVI Companies; or

          —     the enforcement of any such settlement or judgment.

     GCCD BVI and GZI also undertook jointly and severally with the Trustee, Holdco and each
BVI Company to indemnify Holdco and each BVI Company and at all times keep the same
indemnified against all actions, claims, losses, damages, costs (including all legal costs), charges,
expenses, interests, penalties or other liabilities which Holdco or any of the BVI Companies may
reasonably and properly incur (including, without limitation, any loss of rentals) in connection with:

     •    failure to stamp and/or register any tenancies in respect of the Properties;



                                                 241
  MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

    •    any non-conformity of the Properties (or any part thereof) with applicable building
         regulations;

    •    any issues arising from or in connection with any pre-emptive rights of the tenants of the
         Properties in relation to the Properties;

    •    leasing the Properties for uses which are not in compliance with the permitted uses
         thereof under the relevant Building Ownership Certificates or deeds of mutual covenant;

    •    any issues in connection with any extension areas in the White Horse Building of which
         the White Horse Units form part;

    •    any issues arising from or in connection with the proposed renovation of the 8th and 9th
         storeys of White Horse Building to wholesale and retail use;

    •    any non-conformity issues referred to in the Independent Property Valuer’s Building
         Condition Survey Summary Report set out in Appendix VII to this Offering Circular;

    •    failure to receive any of the trade receivables and other receivables referred to in the
         audited combined accounts of the BVI Companies as at the date immediately preceding
         the Listing Date within three months after the Listing Date; and

    •    any issues arising in connection with any breach by GCCD BVI of its representations
         and warranties that among other things, each of the BVI Companies has carried on its
         business and operations so that there have been no material breaches of applicable
         law, all licences and approvals necessary for the carrying on of the businesses and
         operations of the BVI Companies, for the transfer of the relevant Property to the BVI
         Company, for the opening any Renminbi bank accounts in the PRC, for the leasing of
         the relevant Property in the PRC and for the conversion of all the income/profit derived
         from the relevant Property from Renminbi to Hong Kong dollars as well as the
         remittance thereof into Hong Kong have been obtained and are in full force and effect,
         and all necessary approvals from all applicable PRC governmental authorities required
         for the Global Offering and the listing of the Units on the Hong Kong Stock Exchange
         have been obtained and are in full force and effect.

      The Deed of Indemnity does not cover any claim, and neither GCCD BVI nor GZI shall be
liable thereunder, in respect of taxation or liability:

    •    to the extent that provision, reserve or allowance has been made for the relevant
         taxation or claim in the audited combined accounts of the BVI Companies as at the date
         immediately preceding the Listing Date, or to the extent that payment or discharge of
         such taxation or claim has been taken into account therein or in the calculation of the
         consideration under the Reorganisation Deed;

    •    to the extent that the relevant taxation or claim arises or is incurred as a result of the
         imposition of taxation or claims as a consequence of any retrospective change in the



                                              242
  MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

         law, rules and regulation or the interpretation or practice thereof by the taxation
         authorities of the PRC, the British Virgin Islands or any other relevant authority coming
         into force after the Listing Date with retrospective effect or to the extent such taxation
         or claim arises or is increased by an increase in rates of taxation or claim after the
         Listing Date with retrospective effect;


    •    to the extent of any provision or reserve made for taxation in the audited combined
         accounts of the BVI Companies as at the date immediately preceding the Listing Date
         which is finally established to be an over-provision or an excessive reserve, in which
         case GCCD BVI’s and GZI’s liability (if any) in respect of taxation shall be reduced by
         an amount not exceeding such provision or reserve, provided that the amount of any
         such provision or reserve applied hereunder to reduce GCCD BVI’s and GZI’s liability in
         respect of taxation shall not be available in respect of any such liability arising
         thereafter; and


    •    to the extent that such claim arises or is incurred as a result of Holdco or any of the BVI
         Companies being in breach of or failing to fulfil or comply with the requirements or
         provisions of the Deed of Indemnity after the Listing Date, which breach or failure is not
         attributable to any default of GCCD BVI or GZI.


    The maximum aggregate liability of GCCD BVI and GZI under the Deed of Indemnity and the
Reorganisation Deed shall not exceed the total consideration for the transfer of the BVI
Companies Shares pursuant to the Reorganisation Deed.


      No claims may be brought against GCCD BVI or GZI after the expiry of six years from the
Listing Date.


    The Deed of Indemnity is only effective if the Listing Date occurs on or before 21 December
2005 (or such other date as Holdco, the Manager, GCCD BVI and GZI may agree in writing).


Deed of Right of First Refusal


    GZI executed a deed (dated 8 December 2005) in favour of the Trustee and the Manager               App B
                                                                                                       B2 (k)
under which GZI REIT was granted, conditional on listing of the Units on the Hong Kong Stock
Exchange, a right of first refusal on the following terms and conditions:


    1.   In the event that GZI proposes to dispose to a third party or parties any completed
         Grade A office building or any completed Grade A commercial building that:


         (a)   fulfils (or would reasonably be regarded as fulfilling) the investment criteria and
               property characteristics, and is consistent (or would reasonably be regarded as
               being consistent) with the investment strategy of the Manager, for property
               investments by GZI REIT, as stated in this Offering Circular (the “Relevant
               Property”); and



                                               243
MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

      (b)    is owned or developed by the GZI Group and in which the GZI Group has an
             ownership interest of 95.0% or more (and, in the circumstances where GZI is able
             to negotiate and agree terms with the relevant joint venture party so as to extend
             the coverage of the right of first refusal granted by GZI to include the Relevant
             Property which is the subject of that joint venture, shall also include that Relevant
             Property),


      and such building:


      (i)    is located in Guangzhou; and


      (ii)   has a value of US$20.0 million or more (as determined by an independent property
             valuer),


      GZI REIT shall have the right of first refusal to acquire the Relevant Property on and
      subject to the terms and conditions set out below.


      GZI will give written notice to the Manager and the Trustee of any proposed offer for sale
      of a Relevant Property to GZI REIT pursuant to the right of first refusal.


 2.   If GZI REIT elects to exercise the right of first refusal to acquire the Relevant Property,
      completion of the sale and purchase of the same shall be conditional upon:


      (i)    the attainment by GZI and/or the relevant member of the GZI Group (the “Relevant
             GZI Entity”) of all requisite approvals and consents required under the
             memorandum and articles of association of the Relevant GZI Entity, the Listing
             Rules and other relevant laws and regulations to which GZI and/or the Relevant
             GZI Entity and/or any other intermediate holding company of the Relevant GZI
             Entity is subject;


      (ii)   the attainment by the Manager of all requisite approvals and consents required
             under the REIT Code, the Trust Deed and all other relevant laws and regulations
             to which GZI REIT is subject;


      (iii) satisfactory results on the completion of the due diligence review of the Relevant
             Property by the Manager; and


      (iv) such other conditions as may be set out in the relevant sale and purchase
             agreement of the Relevant Property.




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MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

    In the event that, for any reason other than due to GZI’s default, the sale and purchase
    of the Relevant Property pursuant to an exercise of the right of first refusal is not
    completed within the pre-agreed period of time or the Manager (acting on behalf of GZI
    REIT) does not elect to exercise the right of first refusal within 30 business days after
    the date of the written notice given by GZI to the Manager and the Trustee mentioned
    above (the “Lapse Event”), GZI shall, at its election, have the right either:


    (i)    to sell the Relevant Property to any third party within 12 calendar months after the
           Lapse Event, at a price and on such terms as are no more favourable than those
           set out in the written notice given by GZI to the Manager and the Trustee
           mentioned above (from the perspective of GZI REIT); or


    (ii)   to retain the Relevant Property for investment purposes.


    In the event that GZI elects to sell the Relevant Property to the prospective purchaser
    stated in the written notice given by GZI to the Manager and the Trustee mentioned
    above within 12 calendar months after the Lapse Event, GZI shall send to the Manager
    (acting on behalf of GZI REIT) a written notice (the “Sale Notice”) of the price and other
    principal terms on which the Relevant Property is proposed to be sold to the prospective
    purchaser, subject to any restrictions on disclosure of the same imposed thereon by the
    prospective purchaser by agreement or otherwise. In addition, in the event that the
    Relevant Property is proposed to be sold by GZI to that prospective purchaser on terms
    more favourable than those stated in the written notice given by GZI to the Manager and
    the Trustee mentioned above (from the perspective of GZI REIT), the right of first refusal
    shall apply afresh to that proposed disposal and GZI shall be required to comply with the
    procedures in the deed of right of first refusal accordingly. The Manager (acting on
    behalf of GZI REIT) shall have 10 business days within which to object to such proposed
    sale solely on the grounds that it is on terms more favourable than those set out in the
    written notice given by GZI to the Manager and Trustee mentioned above (from the
    perspective of GZI REIT). In the event that there is any dispute between the Manager
    (acting on behalf of GZI REIT) and GZI as to whether the terms on which GZI proposes
    to sell the Relevant Property to the prospective purchaser are more favourable than
    those set out in the written notice given by GZI to the Manager and Trustee mentioned
    above (from the perspective of GZI REIT), the matter shall be referred to an
    independent valuer or other property consultant selected by agreement between the
    Manager and GZI. Such an independent valuer or property consultant (as the case may
    be) shall be requested to settle any matter in dispute and the decision of that
    independent valuer or property consultant (as the case may be) as to the matter in
    dispute shall, in the absence of fraud or manifest error, be final and binding on the
    Manager (acting on behalf of GZI REIT) and GZI and such independent valuer or
    property consultant (as the case may be) shall be deemed to act as an expert and not
    as arbitrator. The costs of such an independent valuer or property consultant (as the
    case may be), if any, shall be borne by GZI REIT and GZI in equal shares.



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   MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

           On the first occasion when GZI offers to GZI REIT a right of first refusal to acquire the
           entire building of the West tower of Victory Plaza, GZI also agrees to grant to GZI REIT
           a right of first refusal to acquire such number of car parks in Victory Plaza (the
           “Additional Car Parks”) which will, when aggregated with GZI REIT’s interests in the
           total construction area of the podium and the entire building of the West tower of Victory
           Plaza, enable GZI REIT to control more than 50.0% of the total construction area of
           Victory Plaza, provided that:


           (i)    the right of first refusal in respect of the Additional Car Parks is only exercisable if
                  GZI REIT elects to acquire West tower of Victory Plaza to which such notice
                  relates; and


           (ii)   completion of the sale and purchase of the Additional Car Parks shall take place
                  simultaneously with, and conditional upon, the completion of the sale and
                  purchase of West tower of Victory Plaza.


           If the Manager (acting on behalf of GZI REIT) elects to exercise the right of first refusal
           to acquire the Additional Car Parks, the price for the acquisition of the Additional Car
           Parks shall be agreed between GZI and the Manager and determined by reference to an
           independent valuer’s valuation of the same in accordance with the REIT Code. The date
           of such valuation shall comply with the relevant requirements under the REIT Code.
           Save as otherwise provided in this paragraph, the terms for the acquisition of the
           Additional Car Parks shall be the same as those for the acquisition of the West tower of
           Victory Plaza.


     If, for any reason other than due to GZI’s default, the sale and purchase of the Additional Car
Parks is not completed within the pre-agreed period of time or the Manager (acting on behalf of
GZI REIT) does not elect to exercise the right of first refusal to acquire the Additional Car Parks,
there shall be no restrictions on GZI’s ability to deal with the Additional Car Parks.


    The right of first refusal will commence on the Listing Date until the earliest of the following
occurring:


     (a)   the expiry of five years after the Listing Date;


     (b)   the Units ceasing to be listed on the Hong Kong Stock Exchange; or


     (c)   the entity which is the asset manager of GZI REIT ceasing for whatever reason to be a
           subsidiary of any member of the GZI Group or the Yue Xiu Group.


      Further, if GZI or any of its subsidiaries intends to enter into a joint venture in respect of a
Relevant Property whereby GZI or, as the case may be, its subsidiary is to hold an ownership
interest of more than 50.0% but less than 95.0%, and such Relevant Property is reasonably



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   MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

expected to be completed during the term of the right of first refusal, GZI will use all reasonable
commercial endeavours to negotiate with the relevant joint venture party or parties such that the
terms of the joint venture will enable it to include such Relevant Property within the scope of the
right of first refusal.

     The portfolio of properties which fall within the parameters of the above right of first refusal
is set out in the section headed “Offering Circular Summary” in this Offering Circular. As GZI is
currently in negotiations with a prospective purchaser of the East tower of Victory Plaza, the East
tower will fall within the parameters of the right of first refusal only to the extent it is not sold prior
to the completion of its construction.

Facility Agreement

      On 7 December 2005, the Lending Banks entered into the Facility Agreement with the BVI
Companies (as borrowers) and Holdco (as guarantor) in connection with the Loan Facility, a
US$165.0 million three-year floating rate term loan facility. It is intended that the BVI Companies
will fully draw down on the Loan Facility on the Listing Date and onward lend the funds to Holdco
for partial payment on the Promissory Note (see the section headed “Use of Proceeds” in this
Offering Circular).

      The Loan Facility is guaranteed on a joint and several basis by the Trustee (in its capacity as
trustee of GZI REIT) and Holdco. The Trustee’s guarantee is subject to the proviso that its
obligations as a guarantor will be limited to the aggregate amount of, and be paid from, the assets
held by it for GZI REIT.

     The availability of the Loan Facility on the Listing Date is conditional on certain conditions
precedent being satisfied. Such conditions include, among others, the Global Offering becoming
unconditional by no later than 21 December 2005 and the provision of documents evidencing the
approval and authority of the BVI Companies and Holdco in entering into the Facility Agreement.

      Interest under the Loan Facility is payable quarterly (or such other period as agreed by the
BVI Companies and the facility agent acting on the instructions of the majority of the Lending
Banks) at a rate of 1.35% per annum above the three-month US dollar LIBOR rate, and principal
will be payable in one lump sum at the end of the three-year period commencing from the
drawdown date.

     The Facility Agreement contains certain covenants and undertakings to be provided by the
BVI Companies and Holdco including (without limitation) negative pledges, provision of financial
and operational information and valuation report(s) and maintenance of insurances. In particular,
Holdco, on a consolidated basis, must maintain an aggregate interest coverage ratio of not less
than two times. If the interest coverage ratio at any time falls below two times, it will constitute an
event of default under the Facility Agreement.

     Holdco must also maintain a security margin (being the ratio of the aggregate principal
amount of all borrowings under the Facility Agreement to the aggregate value of the Properties as
shown by the then latest annual valuation reports plus the aggregate amount of all cash in the
bank accounts held by the BVI Companies and Holdco) of no more than 50.0%. In the event that
such margin exceeds 50.0%, it will constitute an event of default under the Facility Agreement.



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   MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

     It will also constitute an event of default under the Facility Agreement if GZI ceases to hold,
directly or indirectly, at least 15.0% of all Units in issue at any time. GZI has undertaken to the
Trustee, the Manager and Holdco that, for so long as any Loan Proceeds remain unpaid, GZI shall
hold, directly or indirectly, at least 15.0% of all Units in issue at any time.


      Other events of default under the Facility Agreement includes (without limitation) non-
payment of any sum under the Facility Agreement or any security provided in respect of the Loan
Facility, misrepresentation, cross default in relation to the financial indebtedness of the BVI
Companies, Holdco or GZI REIT, breach of any financial covenants under the Facility Agreement,
change of control of the BVI Companies or Holdco, suspension of trading of the Units on the Hong
Kong Stock Exchange for more than a specified number of days, termination of listing of the Units
on the Hong Kong Stock Exchange and the occurrence of any material adverse change to the BVI
Companies or Holdco or the Trustee which is reasonably likely to adversely affect the ability of any
of the BVI Companies, Holdco or the Trustee to perform any of their respective obligations under
the Facility Agreement or any security provided in respect of the Loan Facility. If any event of
default under the Facility Agreement occurs, the Lending Banks may declare a default and demand
the immediate repayment of all outstanding loan and other sums under the Facility Agreement, and
enforce the security provided in respect of the Loan Facility.


     To secure, pari passu and pro rata, the BVI Companies’ obligations under the Loan Facility,
a security package has been granted in favour of a security trustee to hold on behalf of each
Lending Bank. The security package includes, among others, a registered mortgage over each
Property, assignment of rental income and all other proceeds arising from each of the Properties
and of all tenancy agreements relating to each of the Properties and a legal mortgage over the BVI
Company Shares.


Swap Agreements


     In conjunction with the Loan Facility, each of the BVI Companies has also entered into
agreements with each of the Lending Banks for US$/RMB non-deliverable swap facilities covering
the swap of a floating rate US dollar liability into a synthetic Renminbi liability with a series of fixed
rate cash flows denominated in Renminbi, payable in US dollars, with a principal exchange at
maturity also settled in US dollars for an aggregate notional principal amount of US$165 million for
a minimum tenor of three years.


      The BVI Companies’ obligations under the swap agreements are secured, pari passu and pro
rata, on the security package described in the subsection headed “Facility Agreement” above.


     The BVI Companies will also grant guarantees in favour of the Lending Banks (as swap
providers) to secure their obligations under the swap agreements.




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   MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

Tenancy Services Agreements

    The Manager and each of Full Estates, Moon King and Keen Ocean have entered into a
Tenancy Services Agreement with Yicheng while the Manager and Partat have entered into a
Tenancy Services Agreement with White Horse Property Management Company.

  Leasing Agents’ fees

     Each of the Tenancy Services Agreements relating to the Fortune Plaza Units, the City
Development Plaza Units and the Victory Plaza Units provides for payment by the relevant BVI
Company to Yicheng of a monthly fee of 4.0% per annum of the gross revenue of the relevant
Property. The Tenancy Services Agreement relating to the White Horse Units provides for payment
by Partat to White Horse Property Management Company of a monthly fee of 3.0% per annum of
the gross revenue of the White Horse Units.

     All such amounts paid to each Leasing Agent shall be reconciled by the Manager with the
consolidated audited financial statements of GZI REIT for the relevant Financial Year within
fourteen days of the completion of such audited financial statements (or such other period as may
be agreed between the parties), and such reconciliation shall be reviewed by the auditor of GZI
REIT. Any balance of the fees due and payable to the Leasing Agent or any refund due from the
Leasing Agent shall be paid by the relevant BVI Company or the Leasing Agent (as the case may
be) within fourteen days after completion of the said audited financial statements.

     The Leasing Agents have agreed that, for so long as they are also the property managers of
the relevant Properties, their fees as leasing agent under the Tenancy Services Agreements shall
also satisfy the property management fees which they are entitled to receive from the relevant BVI
Companies for any vacant units in the Properties under the various property management
arrangements described in the section headed “The Leasing Agents — The Leasing Agents” of this
Offering Circular as well as the subsections headed “White Horse Property Management
Agreement — Property Management Fees” and “Victory Plaza Property Management Agreement
— Property Management Fees” below.

  Term of appointment

     The initial term of appointment of the Leasing Agents is from 7 December 2005 till 6
December 2008 (unless earlier terminated in accordance with the provisions of the Tenancy
Services Agreements). Six months prior to expiry of this term, each of the Leasing Agents may
request to extend its appointment for a further three years on the same terms and conditions
except that all fees payable to it shall be revised to the prevailing market rates and provided that
such extension shall be subject to Unitholders’ approval.

      The relevant BVI Company, on the recommendation of the Manager, will decide the prevailing
market rates for the relevant Leasing Agent’s fees for the extension term and if the relevant
Leasing Agent disagrees with the relevant BVI Company’s decision on the prevailing market rates,
the matter will be referred to an independent expert whose determination of such rates shall be
final and binding on the parties.



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  MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

  Leasing Agents’ services


    The services provided by each of the Leasing Agents include the following:


    •    leasing services, including advising on achievable rental rates based on current market
         assessment, reporting with recommendations on appropriate rental levels and lease
         incentive(s) relating to renewal of the existing tenancy agreements, initiating lease
         renewals and negotiation of terms with tenants to conclude such renewals, as well as
         preparing letters of offer, or invitation to renewal, to tenants, and ensuring proper
         execution of tenancy agreements;


    •    marketing services, including acting as a marketing agent for the marketing and letting
         out of the Properties, recommending and finalising marketing programs with the
         Manager, contracting for advertising and promotional programs and providing regular
         updates on the marketing programs as required; and


    •    tenancy management services, including reviewing and advising on tenants’ expansion
         requirements, administering collection of deposits, rent and other sums due from
         tenants, evaluating the assessment or re-assessment of government rates and taxes
         (including urban real estate tax) for the Properties, preparing the annual budget and
         three years’ budget forecast for each Property, as well as advising tenants on the
         procedures for setting up operations.


     The leasing and marketing services described above will be provided to GZI REIT on an
exclusive basis. However, the Tenancy Services Agreements do not preclude GZI REIT from also
obtaining such services from other service providers.


  Non-reimbursable expenses


      Under the Tenancy Services Agreements, the Leasing Agents will not be reimbursed for the
following expenses, which shall be fully borne by the Leasing Agents:


    •    costs and expenses under contracts entered into by the Leasing Agents with third party
         service providers, delegates and agents for the provision of, among other things,
         supervision, maintenance, marketing and other services for the Properties, where such
         services are not directly provided by employees of the Leasing Agents;


    •    costs and expenses for utilities, including but not limited to, water, gas and electricity
         supply to the Properties, save where such costs and expenses are borne by the tenants
         thereof; and


    •    marketing and leasing commissions of third party service providers for the leasing of the
         Properties.



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  MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

  Termination


     In respect of each Tenancy Services Agreement, the Manager or the relevant BVI Company
may terminate the appointment of a Leasing Agent on the occurrence of certain specified events,
which include the bankruptcy, insolvency or liquidation of the Leasing Agent, or if the Leasing
Agent fails to remedy any breach of its obligations under the Tenancy Services Agreement within
90 days of receiving of written notice of such breach (where such breach is capable of remedy).


     In the event of the sale of a Property by a BVI Company or the sale of a BVI Company by
Holdco or GZI ceasing to be the holding company of a Leasing Agent, the Manager will be entitled
to terminate the appointment of the Leasing Agent under the relevant Tenancy Services Agreement
by not less than 60 days’ prior written notice to the Leasing Agent. Such termination shall not be
treated as termination due to the default of any party under the Tenancy Services Agreement and
the Leasing Agent shall not be entitled to damages or compensation in consequence of such
termination.


       In addition, the appointment of a Leasing Agent shall immediately terminate upon the
Manager ceasing to be the manager of GZI REIT, or GZI REIT being merged, wound up or
otherwise terminated. The relevant Leasing Agent will not be entitled to damages or compensation
if its services are terminated in any such circumstances.


     Upon termination of the appointment of the Leasing Agent under a Tenancy Services
Agreement, the Manager shall as soon as practicable recommend to the relevant BVI Company
the appointment of a replacement leasing agent and arrange for the entry into a tenancy services
agreement with the replacement leasing agent. The outgoing Leasing Agent shall novate or assign
all agreements entered into by the Leasing Agent for the collection of property management fees
from tenants, novate or assign (if required by the Manager) the contracts entered into by the
Leasing Agent with third party service providers, and, at the instruction of the Manager, do such
other things as the Manager or the Property Company may consider necessary or desirable to
ensure that there is no disruption to the continued proper management of the relevant Property
until such time as a replacement leasing agent is appointed.


  Novation


     The Manager is entitled to novate its rights, benefits and obligations under each Tenancy
Services Agreement to a new manager of GZI REIT appointed in accordance with the terms of the
Trust Deed.




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  MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

Property Consultancy Agreement

     By a letter of engagement letter dated 1 November 2005, the Property Adviser was appointed
by the Manager to provide certain property consultancy services to the Manager as and when
required for a three-year period commencing on 1 November 2005. The Manager has the option
to extend the engagement of the Property Adviser for a further two years. When requested by the
Manager, the Property Adviser will provide advice in relation to, among other things:

     •    operational matters of GZI REIT (such as preparation of business plans and budgets,
          monitoring of GZI REIT’s assets for compliance with budgets and monitoring the day to
          day management of GZI REIT);

     •    training the Manager’s staff in relation to asset management and property management
          related matters and performing property management audits; and

     •    development of the Manager’s IT capabilities and infrastructure.

    The Property Adviser’s fees for such services will be borne by the Manager and not by GZI
REIT.

Agreement to Appoint White Horse Property Management Company to Manage the Common
Areas in White Horse Building

      Partat, White Horse JV (the owner of the car park in White Horse Building), Guangzhou City
Xi Jiao Villagers’ Committee (which owns and manages the Xi Jiao Market on the lower ground
level of White Horse Building) and White Horse Property Management Company entered into an
agreement on 7 December 2005 under which the three owners of White Horse Building appointed
White Horse Property Management Company to manage the common areas in the Property.

    In the agreement, Partat, White Horse JV, Guangzhou City Xi Jiao Villagers’ Committee also
agreed not to establish an owners’ committee for White Horse Building.

White Horse Property Management Agreement

      Further to the agreement between Partat, White Horse JV and Guangzhou City Xi Jiao
Villagers’ Committee to appoint White Horse Property Management Company to manage the
common areas in the Property, Partat and White Horse JV entered into a property management
agreement with White Horse Property Management Company on 7 December 2005 to set out the
terms and conditions for the provision of property management services in respect of the portions
of White Horse Building owned by Partat and White Horse JV.

  Property Management Fees

     Under this agreement, White Horse Property Management Company is entitled to collect a
monthly property management fee charged at the rate of RMB50 for every square metre of Gross
Floor Area comprised in the portions of White Horse Building owned by Partat and White Horse JV.



                                              252
      MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

This fee is payable by Partat and White Horse JV (in respect of vacant units in the portions of
White Horse Building owned by them) and by the tenants in all other cases. (See the sub-section
headed “Tenancy Services Agreements — Leasing Agents’ Fees” above for separate
arrangements agreed to by White Horse Property Management Company for its property
management fees in respect of vacant units.)

       Property management fees so collected are to be used for payment of, among other things,
fitting out and maintenance expenses, cleaning and landscaping expenses, relevant taxes,
reimbursement of White Horse Property Management Company’s staff costs, as well as White
Horse Property Management Company’s remuneration (under PRC law, White Horse Property
Management Company is entitled to retain 10.0% of the property management fees as its
remuneration).

      Term of Appointment

     White Horse Property Management Company has been appointed to provide property
management services in respect of the portions of White Horse Building owned by Partat and
White Horse JV from 19 October 2005 to 18 October 2008.

      White Horse Property Management Company’s Services

     The services provided by White Horse Property Management Company under this agreement
include, among other things, repair and maintenance services, cleaning and security services,
drawing up a Handbook for Tenants (which is subject to the approvals of Partat and White Horse
Clothing Market Limited) as well as producing annual property management plans and budgets
and semi-annual property management accounts for approval or, as the case may be, review by
Partat and White Horse JV.


     White Horse Property Management Company may appoint specialised service providers to
carry out specialised property management functions but may not delegate the whole of its
property management responsibilities under this agreement to another person.


GCCD’s Appointment of Moon King as its Representative and Irrevocable Undertaking to
Moon King


     GCCD, as the legal owner of certain units in the West tower, the car park and the clubhouse
(comprising 14.9% of the total Gross Floor Area of Fortune Plaza(1)), has, by a letter dated 7
December 2005, irrevocably appointed Moon King as its representative to attend and vote at all
meetings of the owners’ committee of Fortune Plaza. Under this letter of appointment, GCCD also
undertook to accept, adopt and ratify all actions carried out, and all documents signed, by Moon
King as its representative.


(1)     GCCD owns certain units in the podium which comprise a total of 0.6% of the Gross Floor Area of Fortune Plaza.
        The voting rights in respect of such units in the podium have not been accorded to Moon King as GCCD has signed
        a memorandum of understanding with a third party to sell those units.




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   MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

     On the same date, GCCD has also given an irrevocable undertaking to permit Moon King to
vote on GCCD’s behalf its voting rights in respect of certain units in the West tower, the car park
and the clubhouse (which constitute 14.9% of the total voting rights at the owners’ general
meetings of Fortune Plaza) at all meetings of the owners’ committee, howsoever Moon King
deems appropriate. The undertaking further provides that if GCCD transfers its ownership in the
car park and/or the clubhouse, on the basis that there is no material prejudice to the lawful rights
and interests of GCCD, it shall also use its best endeavours to obtain a letter of appointment and
an undertaking from the transferee in favour of Moon King on similar terms.

      As a result of the above arrangement, GZI REIT will have effective control of 65.1% of the
total voting rights at an owners’ general meeting of Fortune Plaza. Accordingly, GZI REIT will be
the single largest owner of Fortune Plaza and will be able to carry the majority votes required for
matters other than:

     •    amendment of the deed of mutual covenant for the building or the rules of proceedings
          for owners’ general meetings;

     •    appointment or dismissal of the property management company for the building; and

     •    any proposal to use or to raise special repair fund in respect of the building,

     (collectively, “Reserved Matters”).

    The above undertaking will automatically terminate if the proportion of Gross Floor Area held
by Moon King in Fortune Plaza reaches 67.0%.

GCCD’s Appointment of Full Estates as its Representative and Irrevocable Undertaking to
Full Estates

     GCCD, as the legal owner of the car park in City Development Plaza, has, by a letter dated
7 December 2005, irrevocably appointed Full Estates as its representative to attend and vote at
all meetings of the owners’ committee of City Development Plaza. Under this letter of appointment,
GCCD also undertook to accept, adopt and ratify all actions carried out, and all documents signed,
by Full Estates as its representative.

      On the same date, GCCD, as the legal owner of the car park in City Development Plaza, has
also given an irrevocable undertaking to permit Full Estates to vote on GCCD’s behalf, howsoever
Full Estates deems appropriate, at all meetings of the owners’ committee of City Development
Plaza. The undertaking further provides that if GCCD transfers its ownership of any of the relevant
portions of City Development Plaza, on the basis that there is no material prejudice to the lawful
rights and interests of GCCD, it shall also use its best endeavours to obtain a letter of appointment
and an undertaking from the transferee in favour of Full Estates on similar terms.

     With this undertaking, GZI REIT will have effective control of 74.1% of the total voting rights
at an owners’ general meeting of City Development Plaza, and will be able to carry the majority
votes required for all matters in respect of the Property, including Reserved Matters.



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   MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

    The above undertaking will automatically terminate if the proportion of Gross Floor Area held
by Full Estates in City Development Plaza reaches 67.0%.

Irrevocable Undertaking to Keen Ocean

      GCCD, as the legal owner of the car park and part of basement 1 (other than the portion
owned by Keen Ocean) of Victory Plaza and as the developer of the two office tower blocks above
the Victory Plaza podium, has, by a letter dated 7 December 2005, given an irrevocable
undertaking to Keen Ocean that so long as it is the owner of the two office tower blocks, it agrees
with Keen Ocean that the owner of the podium will have exclusive right to use, and to all proceeds
arising from the use of, the common area within the podium as well as the internal and external
walls of the podium, and the exclusive right to decide on all operational matters relating only to the
podium.

      The undertaking further provides that if GCCD transfers its ownership in the office tower
blocks other than to Keen Ocean, it will ensure that the transferee agrees to the foregoing
undertakings in the relevant transfer agreement. In addition, a form of deed of mutual covenant
which reflects the above mentioned undertakings will be attached to the relevant transfer
agreement and the transferee will be required to agree that when an owners’ committee is set up
for Victory Plaza and an owners’ meeting is convened to adopt a deed of mutual covenant, it will
vote in favor of adopting a deed of mutual covenant in the form attached to such transfer
agreement.

     In addition, GCCD has agreed to convene a meeting of the owners of Victory Plaza within one
year from the date of the undertaking to establish the owner’s committee and to vote for the
adoption of the form of deed of mutual covenant attached to the undertaking at the same meeting.

Victory Plaza Property Management Agreement

      Keen Ocean and GCCD (as the owner of the car park in Victory Plaza and the developer of
the two office tower blocks above the Victory Plaza podium) entered into a property management
agreement with Yicheng on 7 December 2005 to appoint Yicheng to manage the common areas
in Victory Plaza.

  Property Management Fees

     Under this agreement, Yicheng is entitled to collect a monthly property management fee
charged at the rate of RMB48 for every square metre of Victory Plaza’s Gross Floor Area. This fee
is payable by Keen Ocean and GCCD (in respect of vacant units in Victory Plaza) and by the
tenants in all other cases. (See the subsection headed “Tenancy Services Agreements — Leasing
Agents’ Fees” above for separate arrangements agreed to by Yicheng for its property management
fees in respect of vacant units.)

       Property management fees so collected are to be used for payment of, among other things,
fitting out and maintenance expenses, cleaning and landscaping expenses, relevant taxes,
reimbursement of Yicheng’s staff costs, as well as Yicheng’s remuneration (under PRC law,



                                                 255
      MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

Yicheng is entitled to retain 10.0% of the property management fees as its remuneration).
Additionally, for every RMB48 in property management fees collected by Yicheng, RMB10 may
only be used, subject to the approval of Keen Ocean and GCCD, for Victory Plaza’s promotional
expenses.

      Term of Appointment

     Yicheng has been appointed to provide property management services in respect of Victory
Plaza commencing from 7 December 2005. Yicheng’s appointment under this agreement will only
terminate when the owners’ committee of Victory Plaza is established and the committee enters
into a new property management agreement (which could either be Yicheng or another service
provider), and such agreement comes into effect.

      Yicheng’s Services

     The services provided by Yicheng under this agreement include, among other things, repair
and maintenance services, cleaning and security services, drawing up a Handbook for Tenants
(which is subject to the approvals of Keen Ocean and GCCD) as well as producing annual property
management plans and budgets and semi-annual property management accounts for approval or,
as the case may be, review by Keen Ocean and GCCD.

    Yicheng may appoint specialised service providers to carry out specialised property
management functions but may not delegate the whole of its property management responsibilities
under this agreement to another person.

Victory Plaza Supplemental Property Management Agreement

    On 7 December 2005, Keen Ocean, GCCD and Yicheng entered into a supplemental property
management agreement which provided that:

        •     Yicheng shall establish two property management offices(1) to manage the two different
              portions of Victory Plaza;

        •     the property management office for the Victory Plaza podium shall be responsible for
              managing the equipment and facilities (such as the shared generator room, the security
              system, the fire control system and the waste treatment system) which will eventually be
              shared by the podium and the office tower blocks;

        •     the expenses relating to the common equipment and facilities will be apportioned
              between the podium and the office tower blocks on the basis of their relative Gross Floor
              Areas;



(1)     One property management office is in the Victory Plaza car park and the other in the office tower block (both of which
        do not form part of the Victory Plaza Units).




                                                             256
  MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

     •    Keen Ocean has the exclusive right to use, and to all proceeds arising from the use of,
          the common area within the podium as well as the internal and external walls of the
          podium while the proceeds derived from other common areas in Victory Plaza shall be
          shared between the owners of Victory Plaza pro rata according to the Gross Floor Area
          owned by each of them; and


     •    Keen Ocean has the exclusive right to decide on all other operational matters relating
          only to the podium.


Fortune Plaza and City Development Plaza Property Management Agreements


     The owners’ committees of Fortune Plaza and City Development Plaza (each acting for and
on behalf of all the owners and tenants of Fortune Plaza and City Development Plaza respectively)
have each entered into a property management agreement with Yicheng under which Yicheng was
appointed as the property manager of Fortune Plaza and City Development Plaza. The agreement
for Fortune Plaza was entered into on 1 July 2005 and is for a duration of three years from 1 July
2005 to 30 June 2008; the agreement relating to City Development Plaza was entered into on 15
July 2002 and is for a duration of five years from 19 July 2002 till 18 July 2007.


     The property management agreements set out the services to be performed by Yicheng.
Yicheng’s primary responsibility under each of these agreements includes the upkeep, repair and
maintenance of the common areas and facilities in the subject property. In this respect, Yicheng
is required to prepare an annual property management plan and budget for each of the subject
properties, and must draw up its property management accounts for review by the relevant
owners’ committee once every six months. Yicheng is also required, at the request of an owner or
user of part of the property, to undertake the upkeep, repair and maintenance of that owner’s or
user’s premises for a reasonable fee to be separately borne by that owner or user.


     Yicheng may appoint specialised service providers to carry out specialised property
management functions but may not delegate the whole of its property management responsibilities
under the property management agreements to another person.


    Under the property management agreements, the owners’ committees have the right to,
among other things, review and approve Yicheng’s property management proposal as well as its
annual property management plan and budget for the subject properties.




                                               257
   MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

     For its property management services in respect of Fortune Plaza and City Development
Plaza, Yicheng is entitled to collect from tenants a monthly property management fee charged at
the following rates:

                               Fortune Plaza                    City Development Plaza



     Office portions    RMB25/sq.m./month                        RMB25/sq.m./month
     Retail portions    RMB35/sq.m./month                        RMB33/sq.m./month
     Other portions     n.a.                            RMB35/sq.m./month (for premises used
                                                          for food and beverage operations)


    Under PRC laws, Yicheng is entitled to retain 10.0% of the property management fees as its
remuneration.

      The respective owners of any vacant units in Fortune Plaza and City Development Plaza will
have to pay the property management fees of Yicheng calculated based on 50.0% of the rates
stated above. White Horse Property Management Company and Yicheng have each agreed that
its fees under the relevant Tenancy Services Agreements shall also satisfy the property
management fees which it is entitled to receive from the relevant BVI Company for any vacant
units in the relevant Property. (See the sub-section headed “Tenancy Services Agreements —
Leasing Agents’ Fees” above.)

White Horse Trademark Licences

     By six licence agreements, each dated 7 December 2005, White Horse Property
Management Company has granted Partat the exclusive right to use six of its registered
trademarks of different classes in the PRC.

     Under each licence agreement, Partat is required to pay a nominal fee of RMB1.00 upon the
signing thereof. In return, Partat will have the exclusive right to use the relevant trademark from
the effective date of the agreement to 31 December 2006 in accordance with the terms of the
licence agreements. Each licence agreement provides that if White Horse Property Management
Company extends the registration of the relevant trademark, it shall extend the term under the
licence agreement correspondingly upon completion of the necessary registration procedures, and
enter into a new licence agreement with Partat. So long as White Horse Property Management
Company continues to be the sole legal owner of the trademark in the PRC, the extended term can
be perpetual.

     Without the consent of Partat, White Horse Property Management Company shall not sell,
transfer or dispose of the subject trademarks or any interest therein to any third party, or otherwise
deal with the trademarks or any interest therein.

      Upon written notice to White Horse Management Company, Partat is entitled to assign the
right to use the trademarks to any enterprise which it has invested. Subject to the aforesaid, Partat
is not entitled to assign the right to any third party.



                                                 258
   MATERIAL AGREEMENTS AND OTHER DOCUMENTS RELATING TO GZI REIT

     Partat shall indemnify White Horse Management Company for any loss suffered due to the
misuse of the trademarks by Partat. Under each of the licence agreements, White Horse
Management Company is entitled to terminate the relevant agreement upon such misuse by Partat
which causes material loss to White Horse Management Company. On the other hand, White
Horse Management Company shall fully indemnify Partat for any loss suffered by Partat due to the
breach of the licence agreement by White Horse Management Company.


Yue Xiu Trademark Licence


     By a licence agreement dated 7 December 2005, in consideration of HK$1.00, Yue Xiu has
granted the Manager (acting in its capacity as manager of GZI REIT) the right and licence to use
and sub-licence certain “Yue Xiu” trademarks in connection with the business of GZI REIT in the
PRC and Hong Kong.


      The Manager is entitled to sub-license any of the rights granted under the licence agreement
to any third parties for the purposes of, among other things, the business of GZI REIT. The right
to such use by any sub-licencee shall be personal to such sub-licencee, who shall have no right
to further sub-licence such right to any other third party, other than to Holdco, Partat, Moon King,
Full Estates and Keen Ocean.


     The term of the licence agreement shall commence on 21 December 2005 and shall continue
in perpetuity without any limit in time, subject to earlier termination pursuant to the terms thereof.


     The licence agreement shall automatically terminate forthwith if the Manager ceases to be
the manager of GZI REIT or GZI ceases to be a shareholder of the Manager. Either party to the
licence agreement may give notice in writing to the other party terminating the agreement with
immediate effect if the other party commits any material breach of any of the terms of the
agreement or (if such a breach is remediable) fails to remedy that breach within 60 days from the
date of that party being notified of the breach.


    On termination of the licence under the licence agreement, the Manager shall within six
months of the date of termination cease using the “Yue Xiu” trademark.


Underwriting Agreements


     The Hong Kong Underwriting Agreement was entered into on 11 December 2005 and the
International Underwriting Agreement is expected to be entered into on or about 15 December
2005. For a summary of the key terms and provisions of the Hong Kong Underwriting Agreement,
see the section headed “Underwriting” in this Offering Circular.




                                                 259
                        CONNECTED PARTY TRANSACTIONS

Details of Connected Party Transactions                                                             App B
                                                                                                    B2(o)
                                                                                                    RC 8.3(a)(b)(c)

     Following completion of the Global Offering, there will be continuing transactions between
GZI REIT and the following persons noted below, which will constitute connected party
transactions of GZI REIT within the meaning of the REIT Code. Details of these transactions as
well as the modifications or waivers sought by GZI REIT in relation to the relevant provisions in
Chapter 8 of the REIT Code on connected party transactions are set out below.


Introduction


      Following completion of the Global Offering there will be, and it is likely that there will
continue to occur from time to time, a number of transactions between GZI REIT and the
companies or entities held or controlled by GZI REIT (collectively, the “GZI REIT Group”) and
parties which have a relationship or connection with GZI REIT.


     The connected party transaction rules of the REIT Code govern transactions between the GZI
REIT Group and connected persons thereof. Such transactions will constitute connected party
transactions for the purposes of the REIT Code.


     GZI REIT’s connected persons will include, among others:                                       App B
                                                                                                    B5


     •    significant Unitholders;


     •    the Trustee and companies within the same group as well as associated companies of
          the Trustee, and the directors, senior executives and officers of the Trustee and their
          respective associates. As a result, GZI REIT’s connected persons will include HSBC
          Holdings plc and other members of its group since the Trustee is an indirect wholly
          owned subsidiary of HSBC Holdings plc;


     •    the Manager as well as controlling entities, holding companies, subsidiaries and
          associated companies of the Manager; and


     •    the Directors, senior executives and officers of the Manager and their respective
          associates. The associates of the Directors of the Manager include (among others)
          other companies of which they are directors.


     The Manager has established an internal control system intended to ensure that connected
party transactions between the GZI REIT Group and its connected persons are monitored and that
these are undertaken on terms in compliance with the REIT Code. As required by the REIT Code,
all connected party transactions must, among other things, be carried out at arm’s length, on
normal commercial terms and in the best interests of Unitholders.




                                              260
                         CONNECTED PARTY TRANSACTIONS

Internal Controls                                                                                        App B
                                                                                                         B2(k)
                                                                                                         B4(a)

     As a general rule, the Manager must demonstrate to the Audit Committee that connected
party transactions entered into by GZI REIT are, among other things, carried out at arm’s length,
on normal commercial terms and in the best interests of Unitholders, which may entail (where
practicable) obtaining quotations from parties unrelated to the Manager, or obtaining one or more
valuations from independent professional valuers.


     The Manager shall investigate and monitor all transactions by the GZI REIT Group in order
to determine whether such transactions are connected party transactions. Such investigation
should be carried out, if practicable, before such transactions are entered into by the GZI REIT
Group.


     Where practicable, each counterparty to a transaction with the GZI REIT Group shall be
required to confirm to the Manager whether the counterparty is a connected person. Such
confirmation should be obtained, if practicable, before such transactions are entered into by the
GZI REIT Group.


     The Manager will maintain a register to record all connected party transactions which are
entered into by members of the GZI REIT Group and the bases, including any quotations from
unrelated parties and independent valuations obtained to support such bases, on which they are
entered into. The Manager will also incorporate into its internal audit plan a review of all connected
party transactions entered into by members of the GZI REIT Group. The Audit Committee shall
review the internal audit reports to ascertain that the guidelines and procedures established to
monitor connected party transactions have been complied with, and among others, whether the
transactions are fair and reasonable. In addition, the Trustee will also have the right to review such
audit reports to ascertain that the REIT Code has been complied with.


      Under the Trust Deed, a Unitholder is prohibited from voting his Units at, or being part of a
quorum for, any meeting of Unitholders convened to approve any matter in which the Unitholder
has a material interest in the business to be conducted and that interest is different from the
interests of other Unitholders.


      It is also provided in the Trust Deed that as and to the extent required by the REIT Code or
any conditions of waivers and exemptions from the operation of the REIT Code granted by the SFC
from time to time, upon request in writing by the Manager, the Trustee shall take actions or
commence proceedings on behalf of GZI REIT as necessary, including against any connected
persons of the Trustee in relation to breach of any transaction or agreements entered into by the
Trustee for and on behalf of GZI REIT with such persons. Notwithstanding the foregoing, the
Manager shall inform the Trustee as soon as it becomes aware of any breach of any agreement
entered into by any member of the GZI REIT Group (or by the Trustee or the Manager for and on
behalf of GZI REIT) with a connected person of the Trustee and the Manager may take such action
as it deems necessary to protect the rights of Unitholders and/or which is in the interests of



                                                 261
                         CONNECTED PARTY TRANSACTIONS

Unitholders. Any decision by the Trustee not to take action against a connected person of the
Trustee shall not constitute a waiver of the right of any member of the GZI REIT Group to take such
action as it deems fit against such connected person unless the Manager may approve the waiver
in accordance with the above positions.


     Notwithstanding the measures in the internal control procedures described above, the
Manager will have to ensure compliance with the REIT Code requirements on connected party
transactions.


Waivers from Strict Compliance with Certain Provisions in Chapter 8 of the REIT Code


1.     Waivers of Requirements with Respect to Certain Transactions


       The Manager has applied for, and the SFC has granted, a waiver from strict compliance with
the disclosure requirements, and the requirements for the approval of Unitholders, under Chapter
8 of the REIT Code in respect of the following connected party transactions between the GZI REIT
Group and entities which are connected persons of GZI REIT as a result of their connection with
the Manager (the “Manager Group”):


     Leasing transactions


       Certain portions of the Properties have been leased to persons in the Manager Group (see
Appendix X to this Offering Circular for details of these leases and leases with other connected
persons of GZI REIT). These leases were entered into in the ordinary and usual course of
business of GZI REIT, on normal commercial terms and were based on market pricing.


     Property management arrangements


     Partat, White Horse JV and Guangzhou City Xi Jiao Villagers’ Committee have appointed
White Horse Property Management Company to manage the common areas in White Horse
Building (see the sections headed “Material Agreements and Other Documents Relating to GZI
REIT — Agreement to Appoint White Horse Property Management Company to Manage the
Common Areas in White Horse Building” and “Material Agreements and Other Documents Relating
to GZI REIT — White Horse Property Management Agreement” in this Offering Circular for further
details).


     Keen Ocean and GCCD have appointed Yicheng to manage the common areas in Victory
Plaza (see the sections headed “Material Agreements and Other Documents Relating to GZI REIT
— Victory Plaza Property Management Agreement” and “Material Agreements and Other
Documents Relating to GZI REIT — Victory Plaza Supplemental Property Management
Agreement” in this Offering Circular for further details).




                                               262
                         CONNECTED PARTY TRANSACTIONS

     The owners’ committees of Fortune Plaza and City Development Plaza (each acting for and
on behalf of all the owners and tenants of Fortune Plaza and City Development Plaza respectively)
have appointed Yicheng to manage the common areas in Fortune Plaza and City Development
Plaza respectively (see the section headed “Material Agreements and Other Documents Relating
to GZI REIT — Fortune Plaza and City Development Plaza Property Management Agreements” in
this Offering Circular for further details).


      The property management agreements described above were entered into in the ordinary
and usual course of business of GZI REIT, on normal commercial terms and were based on market
pricing.


  Tenancy Services Agreements


     The Manager and each of Full Estates, Moon King, Keen Ocean have entered into Tenancy
Services Agreements with Yicheng, and the Manager and Partat have entered into a Tenancy
Services Agreement with White Horse Property Management Company, under which Yicheng and
White Horse Property Management Company have agreed to provide leasing, marketing and
tenancy management services in respect of the Properties (see the section headed “Material
Agreements and Other Documents Relating to GZI REIT — Tenancy Services Agreements” in this
Offering Circular for further details).


     The Tenancy Services Agreements were entered into in the ordinary and usual course of
business of GZI REIT, on normal commercial terms and were based on market pricing.


  Trademark licence agreements


     Six licence agreements have been entered into between Partat and White Horse Property
Management Company under which White Horse Property Management Company granted to
Partat the right to certain “White Horse” trademarks for a nominal fee of RMB1.00 in each case
(see the section headed “Material Agreements and Other Documents Relating to GZI REIT —
White Horse Trademark Licences” in this Offering Circular for further details).


     A licence agreement has also been entered into between Yue Xiu and the Manager under
which Yue Xiu granted to the Manager (as manager of GZI REIT) the right to use and sub-licence
certain “Yue Xiu” trademarks for a nominal fee of HK$1.00 (see the section headed “Material
Agreements and Other Documents Relating to GZI REIT — Yue Xiu Trademark Licence” in this
Offering Circular for further details).


     For the various categories of connected party transactions listed above, the Manager has
also applied for, and the SFC has granted, waivers from strict compliance with:


     (a)   paragraph 8.1(f) of the REIT Code, such that, other than in respect of employees of the
           Manager itself, those persons falling within the scope of employees in paragraphs (c)
           and (k) of the definition in Schedule 1 of the SFO (namely, in respect of any employee
           of the relevant connected person and, where the relevant connected person is a



                                               263
                          CONNECTED PARTY TRANSACTIONS

           corporation, each employee of any of its related corporations, etc) be excluded as
           connected persons of the Manager Group, but such exclusion does not exempt such
           persons from other categories of connected persons as defined in the REIT Code; and


     (b)   paragraph 8.1(g) of the REIT Code, such that the Guangzhou Municipal People’s
           Government (the 100.0% beneficial owner of Yue Xiu) will not be regarded as a
           controlling entity or holding company of the Manager or GZI in so far as the provisions
           of Chapter 8 of the REIT Code are concerned, in respect of connected party
           transactions falling within the categories set out above but not otherwise.


  Conditions of waiver


    Pursuant to such waivers, the connected party transactions falling within the categories listed
above are exempt from strict compliance with the disclosure requirements as connected party
transactions and are not subject to Unitholders’ approval under Chapter 8 of the REIT Code,
subject to the terms and conditions stated below:


     (i)   Extension or Modification


           The waivers for the connected party transactions listed above will be for an initial
     duration commencing from the Listing Date and ending on 31 December 2008 (the “Initial
     Waiver Period”). The waivers may be extended beyond the Initial Waiver Period, and/or the
     conditions of the waiver may be modified from time to time, provided that:


           (a)   the approval of Unitholders other than those who have a material interest in the
                 relevant transactions within the meaning of Paragraph 8.11 of the REIT Code
                 (“Independent Unitholders”) is obtained by way of an ordinary resolution passed in
                 a general meeting of Unitholders;


           (b)   disclosure of details of the proposed extension and/or modification (as the case
                 may be) shall be made by way of an announcement by the Manager of such
                 proposal, and a circular and notice shall be issued to Unitholders in accordance
                 with Chapter 10 of the REIT Code; and


           (c)   any extension of the period of the waiver shall, on each occasion of such
                 extension, be for a period which shall expire not later than the third full financial
                 year-end date after the date on which the approval referred to in paragraph (a)
                 above is obtained.




                                                 264
                      CONNECTED PARTY TRANSACTIONS

(ii)   Annual caps


    In any relevant Financial Year, the annual value of the leasing transactions and the
Tenancy Services Agreement described above shall not exceed the respective annual cap
amounts set out below:


       (a)   Leasing transactions: In respect of the relevant leasing transactions:


             •    an independent valuation shall be conducted for each such leasing
                  transaction except where it is conducted on standard or published rates; and


             •    the aggregate annual amounts of rent payable to GZI REIT thereunder for the
                  period from the Listing Date to 31 December 2005, FY2006, FY2007 and
                  FY2008 shall not exceed the respective cap amounts set out below:

                      Listing Date to
                    31 December 2005         FY2006              FY2007                FY2008

                       HK$94,000         HK$3,684,000       HK$3,868,000          HK$4,061,000


             The above caps have been determined with general reference to the historical data
             for the last three years, and based on the anticipated aggregate value of such
             transactions during the period from the Listing Date to 31 December 2005,
             FY2006, FY2007 and FY2008, with an appropriate buffer for contingencies such
             as: (i) changes in rental or other market conditions; and/or (ii) differences in pricing
             or other relevant practices or policies of GZI REIT compared with those applicable
             when the Properties were controlled by GZI REIT’s predecessors.


       (b)   Tenancy Services Agreements: In respect of the Tenancy Services Agreements,
             the aggregate annual amounts of fees payable by GZI REIT to Yicheng and White
             Horse Property Management Company for the period from the Listing Date to 31
             December 2005, FY2006, FY2007 and FY2008 shall not exceed the respective cap
             amounts set out below:

                  Listing Date to
                 31 December 2005           FY2006               FY2007                FY2008

                   HK$257,000           HK$15,278,000      HK$16,005,200         HK$17,606,000


             The above caps have been determined with general reference to the historical data
             for the last three years, and based on the anticipated aggregate value of such
             transactions during the period from the Listing Date to 31 December 2005,
             FY2006, FY2007 and FY2008, with an appropriate buffer for contingencies such
             as: (i) changes in market conditions; and/or (ii) differences in pricing or other
             relevant practices or policies of GZI REIT compared with those with those
             applicable when the Properties were controlled by GZI REIT’s predecessors.



                                                265
                    CONNECTED PARTY TRANSACTIONS

    As the tenants in the Properties (and not the BVI Companies) pay the property
management fees of Yicheng and White Horse Property Management Company as property
managers of the Properties (see the section headed “The Leasing Agents — The Leasing
Agents” in this Offering Circular), no caps are required in respect of such property
management fees.

     As the trademark licences described above are for nominal consideration, no caps are
required in respect of the licence fees.

(iii) Disclosure in semi-annual and annual reports

    Details of the above connected party transactions shall be disclosed in GZI REIT’s
semi-annual and annual reports, as required under paragraph 8.14 of the REIT Code.

(iv) Auditors’ review procedures

     In respect of each relevant financial period, the Manager will engage and agree with the
auditors of GZI REIT to perform certain review procedures on connected party transactions.
The auditors will then report to the Manager on the factual findings based on the work
performed by them (and a copy of such report shall be provided to the SFC), confirming
whether all such connected party transactions:

      (a)   have received the approval of the Board (including the independent non-executive
            Directors);

      (b)   are in accordance with the pricing policies of GZI REIT;

      (c)   have been entered into in accordance with the terms of the agreements governing
            the transactions; and

      (d)   the total value in respect of which has not exceeded the relevant cap amount
            (where applicable).

(v)   Annual review by the Audit Committee and the independent non-executive Directors

     The Audit Committee and the independent non-executive Directors shall review the
relevant connected party transactions annually and confirm in GZI REIT’s annual report for
the relevant Financial Year that such transactions have been entered into:

      (a)   in the ordinary and usual course of business of GZI REIT;

      (b)   on normal commercial terms (to the extent that there are comparable transactions)
            or, where there are not sufficient comparable transactions to judge whether they
            are on normal commercial terms, on terms no less favourable to GZI REIT than
            terms readily available to or from (as appropriate) independent third parties; and



                                           266
                       CONNECTED PARTY TRANSACTIONS

        (c)   in accordance with the relevant agreements and the Manager’s internal
              procedures governing them (if any) on terms that are fair and reasonable and in the
              interests of the Unitholders as a whole.


(vi) Notification to the SFC


        The Manager shall promptly notify the SFC and publish an announcement if it knows or
has reason to believe that the auditors of GZI REIT and/or the Audit Committee will not be
able to confirm the matters set out in, respectively, the sub-sections headed “Auditor’s review
procedures” and “Annual review by the Audit Committee” above.


(vii) Auditors’ access to books and records


     The Manager shall allow, and shall procure the counterparty to the relevant connected
party transaction to allow, the auditors of GZI REIT sufficient access to their records for the
purposes of reporting on the transactions.


(viii) Subsequent increases in annual caps with Independent Unitholders’ approval


        The Manager may from time to time seek to increase one or more of the annual caps set
out above, for example, when GZI REIT acquires additional properties and increases the
scale of its operations or when there are changes in market or operating conditions, provided
that:


        (a)   the Manager obtains the approval of Independent Unitholders by way of an
              ordinary resolution passed in a general meeting of Unitholders;


        (b)   the Manager discloses details of the proposal to increase the cap amounts by way
              of an announcement such proposal, and issue a circular and notice to Unitholders
              in accordance with Chapter 10 of the REIT Code; and


        (c)   the requirements set out in paragraphs (ii) to (vii) above shall continue to apply to
              the relevant transactions, save that the increased annual cap amounts shall apply.


(ix) Paragraph 8.14 of the REIT Code


        The Manager shall comply with all requirements under paragraph 8.14 of the REIT Code
where there is any material change to the terms of the relevant connected party transactions
or where there is any subsequent changes to the REIT Code which may impose stricter
requirements in respect of disclosure and/or Unitholders’ approval.




                                              267
                               CONNECTED PARTY TRANSACTIONS

     Details of the connected party transactions will be disclosed in the semi-annual and annual
report of GZI REIT as required under paragraph 8.14 of the REIT Code. The Audit Committee and
the other independent non-executive Directors will review the connected party transactions
annually and confirm whether such transactions are carried out in the ordinary and usual course
of business of GZI REIT based on normal commercial terms and in accordance with the relevant
agreement governing them on terms that are fair and reasonable and in the interests of the
Unitholders.

      Opinion of the Board

        Each of the Directors (including the independent non-executive Directors) confirms that:

        (a)   in his opinion, the cap amounts stated above, and the basis for such cap amounts, are
              fair and reasonable having regard to the interests of the Unitholders as a whole;

        (b)   in his opinion, for those continuing connected party transactions (“Continuing CPTs”) in
              respect of which waiver has been sought from the SFC (as described above) which will
              be subsisting as at the Listing Date, each of such Continuing CPT has been entered
              into: (i) in the ordinary and usual course of business of GZI REIT; and (ii) on normal
              commercial terms and are fair and reasonable and in the interests of the Unitholders as
              a whole; and

        (c)   for Continuing CPTs which are entered into after the Listing Date, each of such
              Continuing CPT shall be entered into: (i) in the ordinary and usual course of business
              of GZI REIT; and (ii) on terms which are normal commercial terms and are fair and
              reasonable and in the interests of the Unitholders as a whole.

      Opinion of the Joint Global Coordinators

     The Joint Global Coordinators confirm that, in their opinion, the Continuing CPTs subsisting
as at the Listing Date are conducted in the usual and ordinary course of business of GZI REIT and
are on normal commercial terms and are fair and reasonable and in the interests of the Unitholders
as a whole.

      Opinion of the Independent Property Valuer

     The Independent Property Valuer has confirmed that the rents payable under the leasing
transactions described above (save for the lease by Yicheng of space in the City Development
Plaza Units for its on-site property management office(1)) were at the prevailing market levels
when the leases were entered into and that the other commercial terms are normal commercial
terms.



(1)     In accordance with PRC regulations, Yicheng is entitled to premises for its use free of rent in connection with its
        property management functions at City Development Plaza. Yicheng pays a nominal monthly rent of HK$5.00 per
        square metre for these premises.




                                                           268
                          CONNECTED PARTY TRANSACTIONS

2.   Waivers in Relation to Trustee Connected Persons

     Additionally, the SFC has waived certain rules in Chapter 8 of the REIT Code in relation to
connected persons of HSBC Institutional Trust Services (Asia) Limited in its capacity as the trustee
of GZI REIT. The waivers and the conditions thereof are set out below.


     For the purposes of this section:

     (i)    “HSBC Group” means The Hongkong and Shanghai Banking Corporation Limited and
            its subsidiaries and, unless otherwise expressly stated herein, excludes the Trustee and
            its proprietary subsidiaries (being the subsidiaries of the Trustee but excluding those
            subsidiaries formed in its capacity as the trustee of GZI REIT); and

     (ii)   “Trustee Connected Persons” include a director, a senior executive or an officer of any
            of the Trustee, and a controlling entity, holding company, subsidiary or associated
            company of the Trustee.

     In support of the application for the above waivers, the Manager has undertaken with the SFC
to meet certain conditions, including the following general conditions (“General Conditions”) on an
on-going basis:


     (i)    the connected party transactions are carried out at arm’s length, on normal commercial
            terms and in the interests of the Unitholders as a whole;

     (ii)   the Manager must implement internal controls and compliance procedures to ensure
            that the connected party transactions are monitored and undertaken on terms in
            compliance with the REIT Code;

     (iii) the Manager is satisfied with the Trustee’s internal controls and compliance procedures,
           such as “Chinese Walls”, to ensure that the operation of the Trustee is independent of
           other banking, financial services and other business functions and operations of the
           HSBC Group; and

     (iv) the Manager incorporates provisions in the Trust Deed that require the Trustee to take
          actions or commence proceedings on behalf of GZI REIT, as the Manager deems
          necessary to protect the interest of Unitholders, including against the Trustee
          Connected Persons in relation to any transaction or agreement entered into by the
          Trustee for and on behalf of GZI REIT with such Trustee Connected Persons.


     Separately and for the purpose of this waiver, each of the Trustee and The Hongkong and
Shanghai Banking Corporation Limited (on behalf of itself and its subsidiaries) has given an
undertaking to the SFC that it will act independently of one another in its dealings with GZI REIT.
The Trustee undertakes to the SFC that it will not be involved in the making of any decisions on
behalf of GZI REIT to enter into any transactions with the Trustee Connected Persons, subject only
to the Trustee’s duties of oversight under the REIT Code and the Trust Deed.



                                                269
                         CONNECTED PARTY TRANSACTIONS

      The waivers are given on the premise that they only apply to connected party transactions
involving the Trustee Connected Persons solely as a result of and for so long as the Trustee is in
office as the trustee for GZI REIT. If connected party transactions arise as a result of other
circumstances, these will be governed by Chapter 8 of the REIT Code.

      Notwithstanding the foregoing, the SFC reserves the right to review or revise any of the terms
and conditions of any of the waivers if there is any subsequent change of circumstances that affect
any of them. In the event of future amendments to the REIT Code imposing more stringent
requirements than those applicable at the date of the waivers granted by the SFC on transactions
of the kind to which the transactions belong (including, but not limited to, a requirement that such
transaction be made conditional on approval by the independent Unitholders), the Manager shall
take immediate steps to ensure compliance with such requirements within a reasonable period of
time.

  Ordinary Banking and Financial Services with Trustee Connected Persons

      As a general rule, the Manager must demonstrate to the Audit Committee that such
transactions satisfy the General Conditions, which may entail (where practicable) obtaining
quotations from parties unrelated to the Trustee. For example, for non-daily “corporate finance
transactions”, there should be procedures to ensure (a) competitive “best pricing” (having regard
to the nature of the services being sought and market conditions) and (b) the Trustee should not
be involved in the selection of the parties to the transactions. All connected party transactions are
to be reviewed by the independent non-executive directors of the Manager of GZI REIT to ensure
that they are conducted in the best interests of the Unitholders as a whole.

      Based on the controls summarised above, the Manager intends to adopt and observe certain
policies with respect to transactions between GZI REIT Group and the HSBC Group. Further, the
Manager may engage HSBC Group to provide “ordinary banking and financial services” to GZI
REIT Group from time to time and will not be subject to any requirements for announcement or
Unitholders’ approvals under Chapter 8 of the REIT Code. In addition, the disclosure and reporting
requirements under Chapter 8 of the REIT Code with respect to such transactions shall be
modified as described below. For this purpose, “ordinary banking and financial services” means:

     (i)    deposits and other “banking business” (as defined in the Banking Ordinance) with an
            HSBC Group member which is a “licensed corporation” or “registered institution” (as
            defined in the Securities and Futures Ordinance) or overseas equivalent (together
            “HSBC Group intermediaries”) and conducted on arm’s length commercial terms;

     (ii)   loans extended by an HSBC Group intermediary being a transaction in the ordinary
            course of business of the GZI REIT Group and provided to, or arranged for, the GZI
            REIT Group on arm’s length commercial terms; and

     (iii) related financial services constituting regulated activities (as defined in the Securities
           and Futures Ordinance) and other banking or financial services required in the ordinary
           and usual course of business by the GZI REIT Group (including insurance, ORSO
           retirement benefit schemes, Mandatory Provident Fund Schemes, credit cards, asset
           management and other such services).



                                                270
                         CONNECTED PARTY TRANSACTIONS

    For the avoidance of doubt, “ordinary banking and financial services” as described herein
does not include “corporate finance transactions” which are defined in the “Corporate Finance
Transactions” waiver set out below.


     Notwithstanding the above, a summary disclosure of “ordinary banking and financial
services” related transactions provided by the HSBC Group to the GZI REIT Group in each
financial year has to be disclosed in the annual report of GZI REIT. Such information shall include
the nature of the transactions, types of transactions or services and identities of the connected
persons of the same transactions. The independent non-executive Directors shall confirm in the
annual report that they have reviewed the terms of any such transactions and are satisfied that
these transactions have been entered into:


     (i)    in the ordinary and usual course of business of GZI REIT;


     (ii)   on normal commercial terms (to extent that there are comparable transactions) or,
            where there are not sufficient comparable transactions to judge whether they are on
            normal commercial terms, on terms no less favourable to GZI REIT than terms available
            to or from (as appropriate) independent third parties; and


     (iii) in accordance with the relevant agreement governing them on terms that are fair and
           reasonable and in the interests of the Unitholders as a whole.


     In addition, the auditors of GZI REIT shall be engaged to perform certain agreed upon review
procedures on and report (“Auditors’ Report”) to the Manager (and a copy of such report shall be
provided to the SFC) confirming that all such transactions (a) are in accordance with the terms
disclosed in the offering document; (b) have received the approval of the Board (including the
independent non-executive Directors); (c) are in accordance with the pricing policies of GZI REIT;
(d) have been entered into in accordance with the terms of the agreements governing the
transactions; and (e) the total value in respect of which has not exceeded the respective cap
amount (where applicable).


  Excluded Transactions


     The following transactions will not be deemed connected party transactions of GZI REIT for
the purposes of Chapter 8 of the REIT Code:


     (i)    where the HBSC Group acts for a third party as nominee, custodian, agent or trustee
            and conducts “agency transactions” with GZI REIT Group;


     (ii)   where a collective investment scheme (including another real estate investment trust)
            transacts with the GZI REIT Group, and a company within the HSBC Group acts as the
            manager or trustee of such collective investment scheme but the transaction is not a
            proprietary transaction of the HSBC Group; and



                                               271
                          CONNECTED PARTY TRANSACTIONS

     (iii) where a member of the HSBC Group (other than the Trustee except where the Trustee
           is the trustee of another collective investment scheme and is acting in that capacity)
           acquires, purchases, subscribes, sells or disposes of Units on terms which are the same
           as available to the public or other Unitholders as a whole, and where applicable, are
           subject to the application and allocation rules set out in the Listing Rules of the Hong
           Kong Stock Exchange. For the avoidance of doubt, any dealing by the HSBC Group in
           Units on the Stock Exchange of Hong Kong will not be a connected party transaction.

  Waiver for Lease or License Transactions with the HSBC Group

     The SFC has granted a waiver from strict compliance with the requirement to make
announcements and to seek Unitholders’ prior approval as set out in Rule 8.9 and 8.11 of the REIT
Code in respect of any lease or license transactions entered into with GZI REIT Group where any
member of the HSBC Group is a lessee or licensee and the disclosure and reporting requirements
under Chapter 8 of the REIT Code shall be modified as described in paragraphs (iii), (iv) and (v)
below. As a result of this waiver, the Manager is not required to make announcements or seek
Unitholders’ approval regarding lease transactions between the GZI REIT Group and any member
of the HSBC Group and the disclosure and reporting requirements under Chapter 8 of the REIT
Code that will apply in respect of any lease or license transactions entered into with the GZI REIT
Group where any member of the HSBC Group is a lessee or licensee shall be modified as
described in paragraphs (iii), (iv) and (v) below.

     The above waiver is granted on condition that:

     (i)    the grant of the lease is negotiated and determined by the Manager and/or the
            Manager’s delegate on behalf of the GZI REIT Group;

     (ii)   an independent valuation is conducted for each of the lease transactions except where
            they are conducted on standard or published rates;

     (iii) the aggregate amount of annual rent paid by the HSBC Group to the GZI REIT Group
           during a financial year, together with the material terms of any lease with any member
           of the HSBC Group under which the annual rent (per lease) exceeds HK$1.0 million), is
           disclosed in the annual report of GZI REIT in accordance with Rule 8.15 of the REIT
           Code;

     (iv) a statement is disclosed in the annual report by the independent non-executive
          Directors that they have reviewed the terms of such transactions and that they are
          satisfied that they have been entered into:

            (a)   in the ordinary and usual course of business of GZI REIT;

            (b)   on normal commercial terms (to extent that there are comparable transactions) or,
                  where there are not sufficient comparable transactions to judge whether they are
                  on normal commercial terms, on terms no less favourable to GZI REIT than terms
                  available to or from (as appropriate) independent third parties; and



                                                 272
                           CONNECTED PARTY TRANSACTIONS

            (c)   in accordance with the relevant agreement governing them on terms that are fair
                  and reasonable and in the interests of the Unitholders as a whole; and


     (v)    the Auditors’ Report shall cover all the relevant lease and license transactions.


  Waiver for Corporate Finance Transactions with the HSBC Group


      The SFC has granted a waiver from strict compliance with the requirement under Rule 8.9
and 8.11 of the REIT Code to seek Unitholders’ prior approval and to make announcements and
circulars (in accordance with Chapter 10 of the REIT Code) in respect of certain “corporate finance
transactions” between the GZI REIT Group and the HSBC Group. In addition, the disclosure and
reporting requirements under Chapter 8 of the REIT Code with respect to such transactions shall
be modified as described in conditions (A) to (F) below. For the purpose of this waiver, “corporate
finance transactions” means:


     (i)    underwriting, securitisation, issue of debt instruments or other securities, or other
            related arrangements where the HSBC Group is involved in an underwriting or arranging
            capacity or acts as listing agent and/or financial adviser and/or global coordinator to GZI
            REIT, provided that these transactions are carried out at arm’s length, on normal
            commercial terms, the primary objective of which is the offering or distribution of
            securities to parties outside of the HSBC Group;


     (ii)   lending and borrowing of funds or other related arrangements in connection with any
            facility agreement by which the GZI REIT Group will finance the acquisition of real
            estate; and


     (iii) “corporate advisory transactions”, namely the provision of corporate finance advice to
           GZI REIT Group and excludes transactions set out in (i) and (ii) above, provided that the
           aggregate fees that the HSBC Group derived from all “corporate advisory transactions”
           conducted for the GZI REIT Group during a financial year shall be capped at 1.0% of the
           latest published NAV of GZI REIT.


     For the avoidance of doubt, “corporate finance advice” means advice concerning:


     (1)    compliance with or in respect of the Listing Rules, The Rules Governing the Listing of
            Growth Enterprise Market of the Stock Exchange of Hong Kong, The Hong Kong Code
            on Share Repurchases or The Hong Kong Code on Takeovers and Mergers;


     (2)    (a) any offer to dispose of securities to the public, (b) any offer to acquire securities from
            the public, or (c) acceptance of any offer referred to in (a) or (b), but only in so far as
            the advice is generally given to holders of securities or a class or securities; or


     (3)    corporate restructuring in respect of securities (including the issue, cancellation or
            variation of any rights attaching to any securities).



                                                   273
                         CONNECTED PARTY TRANSACTIONS

     The above waiver is granted on condition that:


     (A)   the offering document and any circular for GZI REIT includes upfront disclosure of this
           waiver and, with respect to those corporate finance transactions under (i) and (ii) of this
           waiver, full disclosure of the material terms of the relevant agreements;


     (B)   the annual report includes disclosure of the aggregate fees paid to the HSBC Group in
           respect of the corporate finance transactions conducted for GZI REIT Group in the
           financial year;


     (C) the annual report includes disclosure in respect of any corporate finance transaction
         whose fees exceed HK$1.0 million: (a) the occurrence and nature of the transaction; (b)
         the parties to the transaction and (c) the date of the transaction;


     (D) the annual report discloses a statement made by each of the Manager and the Trustee
         to confirm that the corporate finance transactions described in (i), (ii) and (iii) have
         complied with the general conditions of the waiver and that the Trustee has not been
         involved in the making of any decision to enter into any corporate finance transaction on
         behalf of GZI REIT (subject to the Trustee’s duties of oversight under the REIT Code
         and the Trust Deed) including the selection of the financial adviser of the transaction;


     (E)   the annual report includes a statement by the independent non-executive Directors that
           they have reviewed the terms of such transactions and are satisfied that they have been
           entered into:


           (a)   in the ordinary and usual course of business of GZI REIT;


           (b)   on normal commercial terms (to extent that there are comparable transactions) or,
                 where there are not sufficient comparable transactions to judge whether they are
                 on normal commercial terms, on terms no less favourable to GZI REIT than terms
                 available to or from (as appropriate) independent third parties; and


           (c)   in accordance with the relevant agreement governing them on terms that are fair
                 and reasonable and in the interests of the Unitholders as a whole; and


     (F)   the Auditors’ Report shall cover all the relevant corporate finance transactions.


     Notwithstanding the above waiver, in the case where the aggregate fees that the HSBC
Group generates from all “corporate advisory transactions” conducted for the GZI REIT Group
during the financial year exceed 1.0% of the latest NAV of GZI REIT as disclosed in the latest
published audited accounts of GZI REIT, the requirements in respect of connected party
transactions as set out in Chapter 8 of the REIT Code shall apply. Further, for the avoidance of
doubt, where by virtue of the nature of the transaction, other than the involvement of the HSBC
Group in its capacity as described above under “corporate finance transactions”, an



                                                 274
                          CONNECTED PARTY TRANSACTIONS

announcement has to be made pursuant to the REIT Code (and is not exempted by any waivers
from announcements under the REIT Code granted by the SFC) such announcement shall
disclose the role of HSBC Group and the relevant terms of engagement in accordance with the
relevant provisions of the REIT Code.

     Based on the above, the Board is of the view that:

     (i)    the waivers are in the interests of the Unitholders as a whole;

     (ii)   it is satisfied with the internal control procedures of the Trustee with respect to the
            independence of the Trustee’s operation vis-a-vis the other banking function/operation
            of the HSBC Group;

     (iii) the cap amount and the basis of the cap amount, in relation to the aggregate fees of the
           HSBC Group generated from all “corporate advisory transactions” between the HSBC
           Group and GZI REIT conducted during the relevant financial year, is fair and reasonable
           having regard to the interests of the Unitholders as a whole; and

     (iv) each connected party transaction shall be entered into in the ordinary course of
          business of GZI REIT, on normal commercial terms and in the interests of the
          Unitholders as a whole.

      Notwithstanding any of the foregoing, the SFC reserves the right to review or revise any of
the conditions relating to the waivers if there are any subsequent change of circumstances that
affect any of them. In the event of future amendments to the REIT Code imposing more stringent
requirements than those applicable at the date of the waivers granted by the SFC on transactions
of the kind to which the transactions belong (including, but not limited to, a requirement that such
transaction be made conditional on approval by the independent Unitholders), the Manager shall
take immediate steps to ensure compliance with such requirements within a reasonable period.

     The various categories of transaction which are the subject of the waivers set out above are
supplementary to any and all applicable exemptions and permissions under the REIT Code and
are independent of each other so that none is in any way limited by or by reference to any of the
others and if more than one category is relevant in any particular circumstance or situation, any
relevant category may apply.

Unitholders’ Mandate

      The Manager may at any time in future seek a general annual mandate from the Unitholders
in relation to other waivers from, or confirmations in relation to, the connected party transaction
rules. Such mandates may include continuations or extensions of existing waivers (including those
set out above).

     In seeking any such general mandate, the Audit Committee and any other independent
non-executive Directors will render an opinion as to whether the methods or procedures for
determining the transaction prices or other relevant terms of the transaction contemplated under



                                                275
                        CONNECTED PARTY TRANSACTIONS

the general mandate are sufficient to ensure that such transactions will be carried out on arm’s
length basis and on normal commercial terms, will not be prejudicial to the interests of GZI REIT
and the Unitholders and that the terms and conditions of such transactions will be fair and
reasonable.

Role of the Audit Committee and the Independent Non-executive Directors for Connected
Party Transactions


      The Audit Committee (comprising at all times of independent non-executive Directors only)
and any other independent non-executive Directors will periodically review (and the executive
Directors or operating units in GZI REIT will periodically produce reports to the Audit Committee
and any other independent non-executive Directors for review of) all connected party transactions
to ensure compliance with the Manager’s internal control system and with the relevant provisions
of the REIT Code. The review will include the examination of the nature of the transaction and its
supporting documents or such other data deemed necessary by the Audit Committee or any other
independent non-executive Directors.

      If a member of the Audit Committee or any other independent non-executive Directors has an
interest in a transaction, he or she is to abstain from participating in the review and approval
process in relation to that transaction.


Announcements and Reporting

     Save as described above, connected party transactions will be reviewed by GZI REIT’s
auditors and will be subject to disclosure in GZI REIT’s annual report and accounts.


The Global Offering

      A number of transactions have been and will be entered into in connection with the Global
Offering with the HSBC Group, including the Underwriting Agreements, the appointment and role
of the Stabilising Manager. The connected party transaction rules under the REIT Code apply
following the Listing of Units on the Hong Kong Stock Exchange and do not apply to these
arrangements.


Other Continuing Transactions

      A number of transactions have been entered into between GZI REIT and members of the GZI
Group. Details of such transactions are disclosed in the section headed “Material Agreements and
Other Documents Relating to GZI REIT” of this Offering Circular and Appendix X to this Offering
Circular. Save as otherwise disclosed in this section or as otherwise excepted under the REIT
Code, such transactions will be subject to the connected party transaction rules of the REIT Code
after the Listing Date.


     Other than as disclosed above, there are no connected party transactions of which the
Directors are aware of which may continue after the completion of the Global Offering.



                                               276
           MODIFICATIONS, WAIVERS AND LICENSING CONDITIONS

     In connection with the authorisation of GZI REIT by the SFC, the Manager has applied to, and
has received approval from, the SFC in relation to the modifications of, and waivers, from strict
compliance with certain requirements of the REIT Code. A summary of such modifications and
waivers is set out below.


Connected Party Transactions — Chapter 8 of the REIT Code


     GZI REIT has applied to the SFC for, and has received, waivers from strict compliance with
certain provisions in Chapter 8 of the REIT Code. Details of these waivers are set out in the
sections headed “Connected Party Transactions — Waivers from Strict Compliance with Certain
Provisions in Chapter 8 of the REIT Code” in this Offering Circular.


Licensing Conditions for the Manager


     In addition to the statutory conditions set out in the SFO, the SFC has imposed the following
licensing conditions upon the Manager:


     •    the Manager’s licence shall lapse and cease to have effect as and when:


          (i)    GZI REIT is de-authorised; or


          (ii)   the Manager ceases to act as the management company of GZI REIT; and


     •    the Manager shall only engage in managing GZI REIT.




                                                 277
OTHER INFORMATION




       278
                                           TAXATION                                                    App B
                                                                                                       B15



 The following statements are by way of a general guide to investors only and do not constitute
 tax advice. Investors are therefore advised to consult their professional advisers concerning
 possible taxation or other consequences of purchasing, holding, selling or otherwise disposing
 of the Units under the laws of their country of incorporation, establishment, citizenship,
 residence or domicile.


    This section has covered all types of taxes currently applicable to GZI REIT in the PRC, Hong
Kong and BVI.


      Investors should note that the following statements on taxation are based on advice received
by the Manager regarding the law and practice in force as at the date of this Offering Circular. As
is the case with any investment, there can be no guarantee that the tax position prevailing at the
time an investment is made by GZI REIT will continue indefinitely.


GZI REIT


  Profits tax


      GZI REIT is exempt from Hong Kong profits tax but Holdco and the BVI Companies will
individually be subject to Hong Kong profits tax. Distributions made by GZI REIT to Unitholders are
not subject to any withholding tax in Hong Kong.


     Holdco is chargeable to Hong Kong profits tax in respect of any profits arising in or derived
from Hong Kong (excluding profits arising from the sale of capital assets) from the carrying on of
a trade, profession or business in Hong Kong. Dividend income derived by Holdco from the BVI
Companies is exempt from Hong Kong profits tax.


      The BVI Companies are chargeable to Hong Kong profits tax in respect of any profits arising
in or derived from Hong Kong from the carrying on of a trade, profession or business in Hong Kong.
Rental income derived from real estate located outside Hong Kong is generally regarded as
income arising in or derived from outside Hong Kong and hence are exempt from Hong Kong
profits tax. Any gain arising from the disposal of real estate located outside is generally regarded
as income arising in or derived form outside Hong Kong and hence exempt from Hong Kong profits
tax. Besides, capital gains are generally exempt from Hong Kong profits tax.


     The current Hong Kong profits tax rate is 17.5%.


  Stamp duty


     No Hong Kong stamp duty is payable by GZI REIT on the issue of new Units.




                                                279
                                                       TAXATION

PRC Taxation of the BVI Companies


      Withholding tax


      The BVI Companies are subject to Foreign Enterprise Income Tax under the Income Tax Law
of the PRC for Enterprises with Foreign Investment and Foreign Enterprises. In general, the BVI
Companies, as foreign enterprises without permanent establishments in the PRC, are subject to
PRC withholding tax at a rate of 10.0%(1) on their rental income (with no deductions for expenses
or allowances except for business tax).


      For gains on disposal of property, the BVI Companies are subject to the PRC withholding tax
at the current prevailing rate of 10.0%. The gain refers to the remaining balance after the original
cost of acquisition of property is deducted from the sale proceeds received from the transfer. The
buyer of a Property has the obligation to withhold the related withholding tax before making
payments to the relevant BVI Company.


      Business tax


     According to the Provisional Regulations on Business Tax of the PRC, rental income and
proceeds from the sale of property is subject to business tax at 5.0%.


     For the business tax incurred on rental income, the BVI Companies can deduct such a
business tax from their gross rental income when calculating their withholding tax liability.


        For the disposal of property, business tax is calculated based on the net selling price(2).


        The tax is collected by way of withholding. The PRC rental collection agents or the buyers of
the Properties have the obligation to withhold the related business tax before making payments to
the BVI Companies.


      Flood prevention fee


     According to the relevant Flood Prevention Fee Regulations in Guangzhou, the BVI
Companies are required to pay flood prevention fee at 0.09% based on rental income received and
any proceeds from sale of property.



(1)
        Under Article 19 of the Income Tax Law of the PRC for Enterprises with Foreign Investment and Foreign Enterprises,
        the PRC statutory withholding tax rate on rental income, gain on disposal of real properties and interest derived by
        foreign enterprises is 20.0%. The 10.0% rate noted above is a reduced rate pursuant to the tax circular, Guofa [2000]
        No. 37, issued by the State Council.
(2)
        Net selling price = selling price - original purchase cost of the building.




                                                              280
                                            TAXATION

  Land appreciation tax


      Under the Provisional Regulations of the PRC on Land Appreciation Tax, the BVI Companies
are subject to land appreciation tax on the taxable gain on sale of property. The taxable gain is
determined based on the sales proceeds after having deducted the “allowable deductions” for the
building. These allowable deductions include the following items:


     •    acquisition cost of the land use right;


     •    assessed value of the building; and


     •    taxes incurred in connection with the transfer of the building.


    The land appreciation tax rate is progressive from 30.0% to 60.0% of the taxable gain,
depending on the appreciation value as compared with the above-mentioned “allowable
deductions”.

     Appreciation value                                                              Tax rates

                                                                                        (%)


     For the portion:
     - not exceeding 50.0% of the allowable deductions                                  30.0
     - over 50.0% but not more than 100.0% of the allowable deductions                  40.0
     - over 100.0% but not more than 200.0% of the allowable deductions                 50.0
     - over 200.0% of the allowable deductions                                          60.0



  Urban real estate tax


     According to the Provisional Regulations of the PRC on Urban Real Estate Tax, landlords are
subject to urban real estate tax. In Guangzhou, urban real estate tax is generally imposed with
reference to 70.0% of the original cost of the real estate at a rate of 1.2% per annum (the “cost
method”). For the self-constructed buildings, the original cost refers to the construction cost of the
building. For acquired buildings, the original cost refers to the purchase cost of the building and
any additional cost incurred to complete the construction. According to the relevant Guangzhou tax
circular, Suidishuifa [2002] No. 235, subject to approval, the cost of land use right can be excluded
when calculating the tax base for urban real estate tax purposes.


     There are however few exceptions in other PRC cities under which foreign enterprises may
be required to pay urban real estate tax based on their rental income at 12.0% to 18.0% (the
“rental method”). The latter basis applies if the tax authorities disagree with the original cost of the
real estate adopted by the taxpayer in their tax filings. Currently, the BVI Companies are paying




                                                  281
                                            TAXATION

their urban real estate tax liabilities using the cost method. Urban real estate tax is generally
collected on a monthly or semi-annual basis depending on local practice. After the Listing Date,
any fair value adjustments of the Properties in accordance will not change the tax base of the
buildings for the calculation of urban real estate tax purposes.


  Stamp duty


    Tenancy agreements and property transfer contracts are subject to stamp duty at 0.1% and
0.05% of the total contract sum respectively, payable by both parties to the contracts.


  Deed tax


      According to the Provisional Rules of the People’s Republic of China on Deed Tax, deed tax
is levied on transfer of land use rights and/or buildings. The tax rate ranges from 3.0% to 5.0%
depending on the location where the land use right or building is located. The taxpayer is the
transferee of the land use right and/or building. In Guangzhou, the deed tax rate is 3.0%


     Save as set out above, as at the latest practicable date, the BVI Companies are not subject
to any other form of taxation in the PRC.


BVI Taxation of the BVI Companies


     The BVI Companies are not subject to BVI taxation. There is no withholding tax imposed on
dividend distributions to GZI REIT.


Investors


  Profits tax


      It is understood that, under the Inland Revenue Department’s current practice, Hong Kong
profits tax will not be payable by any investor on the distributions made by GZI REIT. Unitholders
should take advice from their own professional advisers as to their particular tax position.


     Hong Kong profits tax will not be payable to any investor (other than an investor carrying on
a trade, profession or business in Hong Kong and holding the Units for trading purposes) on any
capital gain made on the sale or other disposal of the Units.


  Stamp duty


    No Hong Kong stamp duty is payable by an investor in relation to the issue of Units to him
by GZI REIT.




                                               282
                                          TAXATION

     The sale and purchase of Units by an investor will attract Hong Kong stamp duty at the
current rate of 0.2% of the price of the Units being sold or purchased, whether or not the sale or
purchase is on or off the Hong Kong Stock Exchange. The investor selling the Units and the
purchaser will each be liable for one-half of the amount of the Hong Kong stamp duty payable upon
such transfer. In addition, a fixed duty of HK$5 is currently payable on any instrument of transfer
of Units.


  Estate duty


    Units will form part of the Hong Kong estate of a deceased investor for the purpose of Hong
Kong estate duty.


    The Legislative Council passed the Revenue (Abolition of Estate Duty) Bill 2005 on 2
November 2005 and the relevant ordinance will commence operation three months from its
publication in the gazette. The Hong Kong estate of an investor who passes away on or after the
commencement date of such ordinance will not be subject to estate duty. The estate duty
chargeable in respect of deaths occurring on or after 15 July 2005 but before the commencement
date of such ordinance would be reduced with retrospective effect to a nominal duty of HK$100 for
estates of assessed value exceeding HK$7.5 million.




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                                      UNDERWRITING

Hong Kong Underwriters (in alphabetical order)


  Joint Global Coordinators and Joint Lead Managers


     Citigroup Global Markets Asia Limited


     DBS Bank Ltd.


     The Hongkong and Shanghai Banking Corporation Limited


  Co-Lead Manager


     BOCI Asia Limited


     First Shanghai Securities Limited


  Co-Managers


     BCOM Securities Company Limited


     Goldbond Securities Limited


     Kim Eng Securities (Hong Kong) Limited


     Tai Fook Securities Company Limited


Underwriting Arrangements


  Underwriting Agreements


     The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters and the
International Offering (including the Offer for Sale) is expected to be fully underwritten by the
International Underwriters, in each case on a several basis and subject as stated below. The Hong
Kong Underwriting Agreement was entered into on 11 December 2005 and, subject to an
agreement being reached on the Offer Price between GZI, the Manager and the Joint Global
Coordinators (on behalf of the Underwriters), the International Underwriting Agreement is
expected to be entered into on or around the Price Determination Date. The Hong Kong
Underwriting Agreement is conditional upon (among other things) the International Underwriting
Agreement being entered into and having become effective, and the respective Underwriting
Agreements are expected to be inter-conditional. (See the section headed “Structure of the Global
Offering — Conditions of the Hong Kong Public Offering” in this Offering Circular.)




                                              284
                                         UNDERWRITING

Grounds for termination by the Hong Kong Underwriters


      The Joint Global Coordinators (on behalf of themselves and the Hong Kong Underwriters)
may in their absolute discretion terminate the Hong Kong Underwriting Agreement with immediate
effect upon giving written notice to GZI and the Manager at any time at or prior to 8:00 a.m. on the
Listing Date if:


     (a)   any of the following shall have come to the notice of any of the Joint Global Coordinators
           or the Hong Kong Underwriters after the date of the Hong Kong Underwriting Agreement


           (i)    that any statement contained in this Offering Circular or the Application Forms
                  (collectively, the “Hong Kong Offering Documents”) and/or any amendments or
                  supplements thereto was or has become untrue, incorrect or misleading in any
                  material respect, the effect of which, in the reasonable judgment of the Joint Global
                  Coordinators, would jeopardise the successful completion of the Hong Kong Public
                  Offering and/or the Global Offering; or


           (ii)   any matter which would, if the Hong Kong Offering Documents and/or any
                  amendments or supplements thereto were issued at that time, constitute a material
                  omission therefrom; or


           (iii) that any of the warranties given by GCCD BVI, GZI, the Manager or GZI REIT in
                  the Hong Kong Underwriting Agreement is (or would if repeated at that time be)
                  untrue or breached in any material respect, the effect of which, in the reasonable
                  judgment of the Joint Global Coordinators, would jeopardise the successful
                  completion of the Hong Kong Public Offering and/or the Global Offering; or


           (iv) any material breach of any of the obligations of any party (other than the Joint
                Global Coordinators or the Hong Kong Underwriters) to the Hong Kong
                  Underwriting Agreement; or


           (v)    any material adverse change, or any development involving a prospective material
                  adverse change, in the condition (financial or otherwise) or in the earnings,
                  business, operations or trading position or prospects of the Properties, GZI REIT
                  or the Manager, or any change in capital stock or long term debt of GZI REIT or any
                  of its subsidiaries, or any loss or interference with the Properties from fire,
                  explosion, flood or other calamity (whether or not covered by insurance) or from
                  any labour dispute or court or governmental action, order or decree, which (in any
                  such case) is not set forth or contemplated in this Offering Circular and the effect
                  of which is, in the reasonable judgement of the Joint Global Coordinators, so
                  material and adverse as to make it impracticable or inadvisable to proceed with the
                  Hong Kong Public Offering and/or the Global Offering; or




                                                  285
                                    UNDERWRITING

      (vi) that (A) the Trustee or the Manager seeks to retire, or is removed, as the
           responsible entity of GZI REIT, (B) any certificate given by the Trustee or the
           Manager or any of their respective officers to any of the Joint Global Coordinators
           under or in connection with the Hong Kong Underwriting Agreement or the Global
           Offering is false or misleading in any material respect, (C) the Trustee or the
           Manager or any of their respective directors or officers is prosecuted for a criminal
           offence or (D) any of the Trustee or the Manager is subject to any insolvency or
           analogous event or circumstance referred to in the Hong Kong Underwriting
           Agreement; or

      (vii) any of the tax rulings on stamp duty or other tax matters obtained by GZI REIT, the
            Manager, GCCD BVI, GZI, Holdco or the BVI Companies in connection with the
            Global Offering and/or the reorganisation arrangements under the Reorganisation
            Deed is revoked or varied the effect of which is, in the reasonable judgment of the
            Joint Global Coordinators, likely to have an adverse effect on the success of the
            Hong Kong Public Offering and/or the Global Offering; or

      (viii) any person (other than any of the Hong Kong Underwriters) has withdrawn or
             sought to withdraw its consent to being named in the Hong Kong Offering
             Documents, or to the issue of the Hong Kong Offering Documents; or

(b)   there develops, occurs, or is introduced or comes into force:

      (i)    any calamity or crisis or any change in financial, political or economic conditions
             or currency exchange rates or controls;

      (ii)   any new law or regulation or any change in existing law or regulation, or any
             change in the interpretation or application thereof by any court or other competent
             authority in or affecting Hong Kong, the PRC, the United States, the United
             Kingdom, Singapore, Australia, France, Germany, Ireland, Italy, the Netherlands,
             Sweden, Switzerland or the UAE (collectively, the “Relevant Jurisdictions”); or

      (iii) any event or series of events in the nature of force majeure (including without
            limitation, acts of government, strikes, lock-outs, fire, explosion, flooding, civil
            commotion, acts of war, acts of God, epidemic, accident or interruption or delay in
            transportation) in or affecting any of the Relevant Jurisdictions; or

      (iv) without limiting the foregoing, any local, national, regional or international outbreak
           or escalation of hostilities (whether or not war is or has been declared), act of
           terrorism or any other state of emergency or calamity or crisis; or

      (v)    any tax law or other change or development involving a change or prospective
             change in taxation in or affecting any of the Relevant Jurisdictions having a
             material adverse effect, or prospective material adverse effect, on the Hong Kong
             Public Offering and/or the Global Offering, GZI REIT or the Units (or the transfer
             of any Units) or an investment in the Units; or



                                            286
                                         UNDERWRITING

            (vi) any downgrading or the issue or giving of any notice of any intended or potential
                 downgrading in the sovereign rating accorded to Hong Kong by any of Standard &
                 Poor’s, Moody’s Investors Service, or Fitch IBCA or Duff & Phelps, or the MSCI
                 Real Estate Sub-Index falls by more than 15.0% below the relevant index between
                 5:00 p.m. on the Business Day immediately before the date of the Hong Kong
                 Underwriting Agreement and 5:00 p.m. on the Business Day immediately
                 preceding the Listing Date; or


            (vii) the imposition or declaration of (A) any suspension or limitation on trading in
                  shares or securities generally on the Stock Exchange, the New York Stock
                  Exchange or the London Stock Exchange or (B) any moratorium on banking
                  activities or foreign exchange trading or securities settlement or clearing services
                  in or affecting any of the Relevant Jurisdictions (as defined below),


            and which in the sole opinion of the Joint Global Coordinators, (A) is, will or may be
            materially adverse to, or materially and prejudicially affect, the business or financial or
            trading position or prospects of GZI REIT or GZI REIT and its subsidiaries as a whole,
            or potential Unitholders, or (B) make or is likely to make it impracticable or inadvisable
            to proceed with the Hong Kong Public Offering and/or the Global Offering or the delivery
            of Units on the Listing Date or (C) has or will or may have a material adverse effect on
            the success of the Global Offering and/or make it impracticable or inadvisable for any
            material part of the Hong Kong Underwriting Agreement, the Hong Kong Public Offering
            or the Global Offering to be performed or implemented as envisaged.


Undertakings


  GZI REIT


     Pursuant to the Underwriting Agreements, the Manager agrees that, except pursuant to the
Global Offering or with the consent of the Joint Global Coordinators, neither GZI REIT nor any of
the other members of the GZI REIT Group shall, during a period of six months following the Listing
Date, and whether conditionally or unconditionally:


     (i)    allot, issue, offer, sell, contract to sell, hedge, grant any option or right to subscribe or
            purchase over or in respect of, or otherwise dispose of any Units or any securities
            exchangeable or convertible into Units or which carry rights to subscribe for or purchase
            Units; or


     (ii)   deposit Units with a depositary in connection with the issue of depositary receipts; or


     (iii) enter into a transaction (including, without limitation, a swap or other derivative
           transaction) that transfers, in whole or in part, any economic consequence of ownership
           of any Units; or


     (iv) offer or agree or announce any intention to do any of the foregoing.



                                                   287
                                        UNDERWRITING

  GZI, GCCD BVI and Yue Xiu


      Pursuant to the Underwriting Agreements, each of GZI and GCCD BVI agrees that, except
with the consent of the Joint Global Coordinators or as described below, it will not, and will procure
that its subsidiaries will not, during a period of six months following the Listing Date, and whether
conditionally or unconditionally:


     (i)    dispose of: (A) any Units or any direct or indirect interest therein (including, without
            limitation, by granting or creating any option, mortgage, pledge, charge or other security
            interest); or (B) any securities exchangeable or convertible into any Units; or


     (ii)   enter into any swap or other derivative transaction or other arrangement that transfers,
            in whole or in part, any economic consequence of ownership of any Units or any
            securities exchangeable or convertible into any Units; or


     (iii) dispose of any direct or indirect interest in any company or entity holding any Units or
           any securities exchangeable or convertible into any Units; or


     (iv) offer or agree or announce any intention to do any of the foregoing.


     These restrictions do not apply to: (i) a transfer of Units to a wholly owned subsidiary of GZI
(provided such transferee enters into equivalent obligations); (ii) the exercise of the Over-
allocation Option; (iii) the distribution of up to 17,000,000 Units by GZI to GZI Qualifying
Shareholders or the sale of some or all of these 17,000,000 Units by GZI (on behalf of GZI
Qualifying Shareholders exercising the GZI Qualifying Shareholders’ Option or GZI Ineligible
Overseas Shareholders) through the International Underwriters as part of the International
Offering; or (iv) the transfer of Units pursuant to the Unit Borrowing Agreement.


     Yue Xiu, for itself and on behalf of its subsidiaries (other than the members of the GZI Group)
has undertaken that the Units which it and/or its subsidiaries (other than the members of the GZI
Group) receive by way of distribution in their capacity as GZI Qualifying Shareholders will be
subject to the same restrictions to which GZI is subject (as described above). Such restrictions do
not apply to a transfer of Units to a wholly owned subsidiary of Yue Xiu.


Commission, expenses and indemnity


     Under the terms and conditions of the Underwriting Agreements, the fees and commissions
to which the Underwriters are entitled will comprise a gross underwriting commission of 2.5% on
the Offer Price (which excludes brokerage, Hong Kong Stock Exchange trading fee and SFC
transaction levy). GZI and the Manager (on behalf of GZI REIT) have agreed that the expenses of
the Global Offering, including underwriting fees and expenses, consulting fees and expenses,
legal and other professional fees and expenses, printing costs and the one time inception fee
payable to the Trustee, will be paid by deduction from the final consideration to be paid to GZI
under the Reorganisation Deed. (See the section headed “Use of Proceeds” in this Offering
Circular.)



                                                 288
                                      UNDERWRITING

     Under the terms and conditions of the Underwriting Agreements, GZI, GCCD BVI, the
Manager and GZI REIT have agreed (or will agree) to indemnify the Underwriters for certain losses
which they may suffer, including losses incurred as a result of Underwriters’ performance of their
obligations under the Underwriting Agreements or as a result of any breach of the representations
and warranties given to the Underwriters under the Underwriting Agreements and any breach by
GZI, GCCD BVI, the Manager or GZI REIT of the Underwriting Agreements.


Underwriters’ interest in GZI REIT


      Save for its obligations under the relevant Underwriting Agreement(s) or as otherwise
disclosed in this Offering Circular, none of the Underwriters owns any Units or has any
shareholding interest or other ownership interest in GZI REIT, the Trustee or the Manager or any
right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for
Units or securities in GZI REIT, the Trustee or the Manager.




                                               289
                      STRUCTURE OF THE GLOBAL OFFERING

The Global Offering

      The Global Offering comprises the Hong Kong Public Offering and the International Offering.
A total of 583,000,000 Units will initially be made available under the Global Offering (without
taking account Units that may be made available under the Offer for Sale and the Over-allocation
Option). A total of 523,000,000 Units will initially be available to investors in the International
Offering (without taking into account the Units that are subject to the Over-allocation Option and
those that may be offered for sale pursuant to the Offer for Sale of up to 17,000,000 Units, being
the maximum aggregate number of Units representing: (i) the Units in respect of which the GZI
Qualifying Shareholders may elect to exercise the GZI Qualifying Shareholders’ Option and (ii)
such number of Units which the GZI Ineligible Overseas Shareholders would otherwise have been
entitled to receive under the Special Dividend) and the remaining 60,000,000 Units will initially be
offered to the public under the Hong Kong Public Offering (subject, in each case, to reallocation
described below under the sub-heading “The Hong Kong Public Offering”).

      Investors may apply for Units under the Hong Kong Public Offering or indicate an interest for
Units under the International Offering, but not under both. Investors may only receive Units under
either the International Offering or the Hong Kong Public Offering, but not under both. The Hong
Kong Public Offering is open to members of the public in Hong Kong as well as to institutional and
professional investors. The International Offering will involve the selective marketing of Units to
institutional and professional investors and other investors anticipated to have a sizeable demand
for such Units. Professional investors generally include brokers, dealers, companies (including
fund managers) whose ordinary business involves dealing in shares, units and other securities,
and corporate entities which regularly invest in shares, units and other securities.

      As part of the International Offering process, prospective professional, institutional and other
investors will be required to specify the number of Units they would be prepared to acquire under
the International Offering either at different prices or at a particular price. This process, known as
“book-building”, is expected to continue up to, and to cease on or about, Thursday, 15 December
2005.

      Allocation of the Units pursuant to the International Offering will be determined by the Joint
Global Coordinators and will be based on a number of factors including the level and timing of
demand, total size of the relevant investor’s invested assets or equity assets in the relevant sector
and whether or not it is expected that the relevant investors are likely to buy further, and/or hold
or sell, their Units after the listing of the Units on the Hong Kong Stock Exchange. Such allocation
is intended to result in a distribution of the International Offering Units on a basis which would lead
to the establishment of a solid unitholder base to the benefit of GZI REIT and the Unitholders as
a whole.

      Allocation of Units to applicants under the Hong Kong Public Offering will be based solely on
the level of valid applications received under the Hong Kong Public Offering. The basis of
allocation may vary, depending on the number of Hong Kong Public Offering Units validly applied
for, but, subject to that (and in accordance with the allocation of Hong Kong Public Offering Units
in Pool A and Pool B described below under the sub-section headed “The Hong Kong Public
Offering”), will be made on an equitable basis although the allocation of Hong Kong Public Offering



                                                 290
                      STRUCTURE OF THE GLOBAL OFFERING

Units could, where appropriate, consist of balloting, which would mean that some applicants may
receive a higher allocation than others who have applied for the same number of the Hong Kong
Public Offering Units, and those applicants who are not successful in the ballot may not receive
any Hong Kong Public Offering Units.

Offer Price under the Hong Kong Public Offering

     The Offer Price for the purposes of the Hong Kong Public Offering is expected to be
determined by agreement between the Joint Global Coordinators (on behalf of the Underwriters),
GZI and the Manager, following completion of the bookbuilding process for the International
Offering and after assessment of the level of market demand for the Global Offering. The
bookbuilding process is expected to continue up to, and cease on or about, Thursday, 15
December 2005.

Price Payable on Application

    The Offer Price will not be more than HK$3.075 and is currently expected to be not less than
HK$2.850. Applicants for Hong Kong Public Offering Units are required to pay, on application, the
Maximum Offer Price of HK$3.075 per Hong Kong Public Offering Unit together with brokerage of
1.0%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.005%
amounting to a total of HK$3,106.05 per board lot of 1,000 Units.

     If the Offer Price, as finally determined in the manner described below, is lower than the
Maximum Offer Price, appropriate refund payments (including the brokerage, Hong Kong Stock
Exchange trading fee and SFC transaction levy attributable to the surplus application monies) will
be made to applicants, without interest. Further details are set out in the sections headed “How to
apply for Hong Kong Public Offering Units” and “Further Terms and Conditions of the Hong Kong
Public Offering” in this Offering Circular.

Determining the Offer Price

     The Offer Price is expected to be determined by agreement between the Joint Global
Coordinators (on behalf of the Underwriters), GZI and the Manager on the Price Determination
Date, when market demand for the Units will be determined. The Price Determination Date is
expected to be on or around Thursday, 15 December 2005.

      The Offer Price will fall within the Offer Price range as stated in this Offering Circular unless
otherwise announced, as further explained below, at any time prior to the morning of the last day
for lodging applications under the Hong Kong Public Offering. The Joint Global Coordinators, on
behalf of the Underwriters, may, where considered appropriate, based on the level of interest
expressed by prospective professional, institutional and other investors during a book-building
process, and with the consent of GZI and the Manager, reduce the indicative Offer Price range
below that stated in this Offering Circular at any time prior to the morning of the last day for lodging
applications under the Hong Kong Public Offering. In such a case, notices of the reduction in the
indicative Offer Price range will be published in the South China Morning Post (in English) and the
Hong Kong Economic Times (in Chinese) not later than the morning of the day which is the last



                                                  291
                      STRUCTURE OF THE GLOBAL OFFERING

day for lodging applications under the Hong Kong Public Offering. Upon issue of such a notice, the
revised Offer Price range will be final and conclusive and the Offer Price, if agreed upon by the
Joint Global Coordinators with GZI and the Manager, will be fixed within such revised Offer Price
range. Such notice will also include confirmation or revision, as appropriate, of the offer statistics
as currently set out in the section headed “Offering Circular Summary” in this Offering Circular, and
any other financial information which may change as a result of such reduction. If applications for
Hong Kong Public Offering Units have been submitted prior to the day which is the last day
for lodging applications under the Hong Kong Public Offering, then if the indicative Offer
Price range is so reduced, such applications cannot be subsequently withdrawn. In the
absence of any notice being published in the South China Morning Post (in English) and the Hong
Kong Economic Times (in Chinese) of a reduction in the indicative Offer Price range stated in this
Offering Circular on or before the morning of the last day for lodging applications under the Hong
Kong Public Offering, the Offer Price, if agreed upon by the Joint Global Coordinators with GZI and
the Manager, will under no circumstances be set outside the Offer Price range as stated in this
Offering Circular.


     If the Joint Global Coordinators (on behalf of the Underwriters), GZI and the Manager
are unable to reach agreement on the Offer Price, the Global Offering will not become
unconditional and will lapse.


     An announcement of the Offer Price, the level of indications of interest in the International
Offering, the results of applications in the Hong Kong Public Offering, the basis of allocations of
the Hong Kong Public Offering Units and the final number of Hong Kong Public Offering Units
comprised in the Hong Kong Public Offering, Pool A and Pool B, respectively, and the Hong Kong
identify card/passport/Hong Kong business registration numbers of successful applicants under
the Hong Kong Public Offering, as well as the details of exercise, if any, of the GZI Qualifying
Shareholders’ Option, is expected to be published on or before Tuesday, 20 December 2005 in the
South China Morning Post (in English) and the Hong Kong Economic Times (in Chinese).


Conditions of the Hong Kong Public Offering


     All acceptances of applications for the Hong Kong Public Offering Units in the Hong Kong
Public Offering are conditional upon:


     (a)   Listing


           The Hong Kong Stock Exchange granting listing of, and permission to deal in, the Units
           to be issued as mentioned herein (including any Units which may be offered or sold
           pursuant to the exercise of the Over-allocation Option);


     (b)   Pricing


           The Offer Price having been duly determined, and the International Underwriting
           Agreement having been duly entered into, on or about the Price Determination Date;



                                                 292
                        STRUCTURE OF THE GLOBAL OFFERING

     (c)   Facility Agreement Unconditional


           The Facility Agreement having become and remaining unconditional in accordance with
           its terms, and the Loan Facility having been unconditionally made available to be drawn
           down in the amount of approximately US$165.0 million; and


     (d)   Underwriting Agreements Unconditional


           The obligations of the Underwriters under the Underwriting Agreements becoming and
           remaining unconditional (including, if relevant, as a result of the waiver of any
           condition(s) by the Joint Global Coordinators for and on behalf of the Underwriters) and
           neither Underwriting Agreement being terminated in accordance with its terms or
           otherwise;


in the case of each of (a) to (d) above, on or before the dates and times specified in the
Underwriting Agreements (unless and to the extent such conditions are validly waived on or before
such dates and times) and in any event not later than 11 January 2006.


     The consummation of each of the International Offering and the Hong Kong Public Offering
is conditional upon, among other things, the other becoming unconditional and not having been
terminated in accordance with its terms.


    If the above conditions are not fulfilled or waived prior to the times and dates specified, the
Global Offering will lapse and the SFC and the Hong Kong Stock Exchange will be notified
immediately. Notice of the lapse of the Global Offering will be caused to be published by the
Manager in the South China Morning Post (in English) and the Hong Kong Economic Times (in
Chinese) on the Business Day next following such lapse.


     In the above situation, all application monies will be returned to applicants, without interest
and on the terms set out in the section headed “How to apply for Hong Kong Public Offering Units”
in this Offering Circular. In the meantime, all application monies will be held in a separate bank
account or separate bank accounts with a receiving banker or other bank(s) licensed under the
Banking Ordinance (Chapter 155 of the Laws of Hong Kong).


     Unit certificates are expected to be issued by Tuesday, 20 December 2005 but will only            App B
                                                                                                       B9
become valid at 8:00 a.m. on Wednesday, 21 December 2005, provided that: (i) the Global
Offering has become unconditional in all respects; and (ii) the right of termination as
described in the section headed “Underwriting — Grounds For Termination by the Hong
Kong Underwriters” in this Offering Circular has not been exercised.




                                                293
                      STRUCTURE OF THE GLOBAL OFFERING

The Hong Kong Public Offering


       The Hong Kong Public Offering is a fully underwritten public offer (subject to agreement as
to pricing and satisfaction or waiver of the other conditions described in the sub-section above
headed “Conditions of the Hong Kong Public Offering”) for the subscription in Hong Kong of,
initially, 60,000,000 Units (representing approximately 10.0% of the total number of Units initially
available under the Global Offering and assuming that the 17,000,000 Sale Units that may be
offered for sale pursuant to the Offer for Sale (being the maximum aggregate number of Units
representing: (i) the Units in respect of which the GZI Qualifying Shareholders may elect to
exercise the GZI Qualifying Shareholders’ Option; and (ii) such number of Units which the GZI
Ineligible Overseas Shareholders would otherwise have been entitled to receive under the Special
Dividend) are included in the International Offering).


     The total number of Hong Kong Public Offering Units available under the Hong Kong Public
Offering will initially be divided equally into two pools for allocation purposes: Pool A and Pool B.
All valid applications that have been received for Hong Kong Public Offering Units with a total
subscription amount (excluding brokerage, Hong Kong Stock Exchange trading fee and SFC
transaction levy payable thereon) of HK$5 million or below will fall into Pool A and all valid
applications that have been received for Hong Kong Public Offering Units with a total subscription
amount (excluding brokerage, Hong Kong Stock Exchange trading fee and SFC transaction levy
payable thereon) of more than HK$5 million will fall into Pool B.


     The number of Hong Kong Public Offering Units comprised in Pool A and Pool B will not be
determined until after applications have been made. The Manager and the Joint Global
Coordinators shall have discretion in determining the number of Hong Kong Public Offering Units
which shall comprise each of Pool A and Pool B. The number of Hong Kong Public Offering Units
comprised in each of Pool A and Pool B will initially be divided equally between the two pools.
However, if demand for Hong Kong Public Offering Units falling within Pool A is significant or
otherwise justified, and irrespective of whether Pool B is undersubscribed or not, it is expected that
the number of Hong Kong Public Offering Units comprising Pool A will be increased in order to
increase the allocation ratio of Pool A, with a view to allowing more Pool A applicants to receive
allocations of Hong Kong Public Offering Units. Hong Kong Public Offering Units in each of Pool
A and Pool B will be allocated on an equitable basis to applicants falling within each pool.


      Applicants should be aware that applications in Pool B are likely to receive different allocation
ratios than applications in Pool A. Where either of the pools is undersubscribed, the surplus Hong
Kong Public Offering Units will be transferred to satisfy demand in the other pool and be allocated
accordingly. Applicants can only receive an allocation of Hong Kong Public Offering Units from
Pool A or Pool B but not from both pools. Multiple or suspected multiple applications and any
application for more than 50% of the Hong Kong Public Offering Units initially available under the
Hong Kong Public Offering (that is, 30,000,000 Hong Kong Public Offering Units) will be rejected.
Each applicant under the Hong Kong Public Offering will also be required to give an undertaking
and confirmation in the Application Form submitted by him/her/it that he/she/it and any person(s)



                                                 294
                      STRUCTURE OF THE GLOBAL OFFERING

for whose benefit he/she/it is making the application have not indicated an interest for or taken up
and will not indicate an interest for or take up any International Offering Units under the
International Offering, and such applicant’s application will be rejected if the said undertaking
and/or confirmation is breached and/or untrue (as the case may be).


      In addition, the number of Hong Kong Public Offering Units comprised in Pool A and Pool B
will not be determined until after applications have been made. Following such determination,
applications in excess of the number of Hong Kong Public Offering Units finally determined to be
comprised in Pool B (but not more than the maximum number initially permitted) will be deemed
to have been made at the number of Hong Kong Public Offering Units finally determined to be in
Pool B.


      The final number of Hong Kong Public Offering Units comprised in the Hong Kong Public
Offering, Pool A and Pool B respectively, will, following the determination by the Manager and the
Joint Global Coordinators, be published in the South China Morning Post (in English) and the Hong
Kong Economic Times (in Chinese) with the announcement of the Offer Price, the level of
indications of interest in the International Offering, the results of applications in the Hong Kong
Public Offering, the basis of allocations of the Hong Kong Public Offering Units and the final
number of Hong Kong Public offering units comprised in the Hong Kong Public Offering, Pool A and
Pool B, respectively, as well as the details of exercise, if any, of the GZI Qualifying Shareholder’s
Option. This announcement is expected to be published on Tuesday, 20 December 2005.


       The allocation of Units between the Hong Kong Public Offering and the International Offering
is subject to adjustment by the Joint Global Coordinators. The number of Units initially available
under the Hong Kong Public Offering represents approximately 10.0% of the total number of Units
initially available under the Global Offering, before taking into account any exercise of the
Over-allocation Option and assuming that the 17,000,000 Sale Units that may be offered for sale
pursuant to the Offer for Sale (being the maximum aggregate number of Units representing: (i) the
Units in respect of which the GZI Qualifying Shareholders may elect to exercise the GZI Qualifying
Shareholders’ Option; and (ii) such number of Units which the GZI Ineligible Overseas
Shareholders would otherwise have been entitled to receive under the Special Dividend) are
included in the International Offering.


     If the number of the Units validly applied for under the Hong Kong Public Offering represents
15 times or more but less than 50 times the number of the Units initially available under the Hong
Kong Public Offering, then Units will be reallocated to the Hong Kong Public Offering from the
International Offering, so that the total number of Units available under the Hong Kong Public
Offering will be at least 180,000,000 Units (representing approximately 30.0% of the Units initially
available under the Global Offering and assuming that the 17,000,000 Sale Units are included in
the International Offering). If the number of Units validly applied for under the Hong Kong Public
Offering represents 50 times or more but less than 100 times the number of Units initially available
under the Hong Kong Public Offering, then the number of Units to be reallocated to the Hong Kong
Public Offering from the International Offering will be increased so that the total number of Units
available under the Hong Kong Public Offering will be at least 240,000,000 Units (representing



                                                295
                      STRUCTURE OF THE GLOBAL OFFERING

approximately 40% of the Units initially available under the Global Offering and assuming that the
17,000,000 Sale Units are included in the International Offering). If the number of Units validly
applied for under the Hong Kong Public Offering represents 100 times or more the number of Units
initially available under the Hong Kong Public Offering, then the number of Units to be reallocated
to the Hong Kong Public Offering from the International Offering will be increased, so that the total
number of Units available under the Hong Kong Public Offering will be at least 300,000,000 Units
(representing approximately 50% of the Units initially available under the Global Offering and
assuming that the 17,000,000 Sale Units are included in the International Offering).


    In addition, in the event of an under-subscription in the Hong Kong Public Offering, the Joint
Global Coordinators will have the discretion to reallocate to the International Offering such
numbers of unsubscribed Hong Kong Public Offering Units as they may deem appropriate.


The International Offering (including the Offer for Sale)


      A total of 523,000,000 Units will initially be available to investors under the International
Offering, without taking into account the Units that may be offered for sale pursuant to the Offer
for Sale of up to 17,000,000 Units (being the maximum aggregate number of Units representing:
(i) the Units in respect of which the GZI Qualifying Shareholders may elect to exercise the GZI
Qualifying Shareholders’ Option; and (ii) such number of Units which the GZI Ineligible Overseas
Shareholders would otherwise have been entitled to receive under the Special Dividend). These
523,000,000 Units represent approximately 89.7% of the Units initially available under the Global
Offering (before taking into account any exercise of the Over-allocation Option and without taking
into account the Units that may be offered for sale pursuant to the Offer for Sale of up to
17,000,000 Units (being the maximum aggregate number of Units representing: (i) the Units in
respect of which the GZI Qualifying Shareholders may elect to exercise the GZI Qualifying
Shareholders’ Option; and (ii) such number of Units which the GZI Ineligible Overseas
Shareholders would otherwise have been entitled to receive under the Special Dividend)). The
Sale Units will also comprise part of the International Offering Units. Accordingly, if all such Units
were to be included in the International Offering, the total number of International Offering Units
would be 540,000,000 Units (assuming that the Over-allocation Option is not exercised) and
627,450,000 Units (assuming that the Over-allocation Option is exercised in full). Pursuant to the
International Offering, the International Offering Units (including the Sale Units) will be offered to
institutional, professional and other investors by the International Underwriters or through selling
agents appointed by them. International Offering Units will be offered to and placed with
professional and institutional investors and other investors anticipated to have a sizeable demand
for the International Offering Units in Hong Kong and other jurisdictions outside the United States
in offshore transactions in reliance on Regulation S.


     In addition, International Offering Units (but not the Sale Units) may be reallocated to the
Hong Kong Public Offering in the case of over-subscription under the Hong Kong Public Offering
as set out in the sub-section headed “The Hong Kong Public Offering” above.




                                                 296
                      STRUCTURE OF THE GLOBAL OFFERING

Special Dividend

     On 23 November 2005, the board of directors of GZI conditionally declared a special dividend
to GZI Shareholders whose names appear on the register of members of GZI as at the close of
business on 9 December 2005. Based on the total number of 583,000,000 Units initially made
available under the Global Offering, the Special Dividend conditionally declared by the board of
directors of GZI on the basis of one Unit for every whole multiple of 400 GZI Shares will represent
approximately 2.9% of the total number of Units initially made available under the Global Offering
(without taking into account any exercise of the Over-allocation Option or the Sale Units) and
approximately 1.7% of the total number of issued Units of GZI REIT immediately following the
completion of the Global Offering. The Special Dividend will be satisfied:

     •    with respect to GZI Qualifying Shareholders, by the transfer to the GZI Qualifying
          Shareholders (subject to the GZI Qualifying Shareholders’ Option described below) of
          such number of Units in the proportion of one Unit for every whole multiple of 400 GZI
          Shares held by them as at the close of business on 9 December 2005, provided that
          fractional entitlements will be disregarded and will not be transferred to such GZI
          Qualifying Shareholders. All costs due in respect of the transfer of such Units to GZI
          Qualifying Shareholders shall be borne by GZI; and

     •    with respect to the GZI Ineligible Overseas Shareholders, by cash payment to the GZI
          Ineligible Overseas Shareholders on the basis of the number of Units to which they
          would otherwise have been entitled to receive under the Special Dividend at the Offer
          Price less applicable stamp duty (being 0.1% of the Offer Price representing half of the
          amount of Hong Kong stamp duty payable on the transfer of a Sale Unit (GZI will bear
          the other half of the applicable stamp duty being 0.1% of the Offer Price) and applicable
          taxes, if any).

     The Units proposed to be transferred to GZI Qualifying Shareholders pursuant to the
Special Dividend may not represent a multiple of a board lot of 1,000 Units, and dealings in
odd lot Units may be at a price below their prevailing market price. Entitlements to Units
pursuant to the Special Dividend are not transferable and there will be no trading in nil-paid
entitlements on the Hong Kong Stock Exchange.

     GZI Qualifying Shareholders are recommended to consult their stockbroker, other
registered dealer in securities, bank manager, solicitor, professional accountant or other
professional adviser if they are in any doubt as to any aspect of the Special Dividend and
the GZI Qualifying Shareholders’ Option described below.

      GZI will grant to each of the GZI Qualifying Shareholders an option (the “GZI Qualifying
Shareholders’ Option”) whereby such GZI Shareholder may elect to receive a cash payment in lieu
of the Units proposed to be transferred to him/her/it pursuant to the Special Dividend, provided that
the GZI Qualifying Shareholders’ Option is not granted to GZI Ineligible Overseas Shareholders.
Thus, the exercise of the GZI Qualifying Shareholders’ Option pursuant to the Election Form is
conditional upon GZI being satisfied that the exercising GZI Shareholder(s) are not Shareholder(s)
whom the directors of GZI, after reasonable enquiries, consider it necessary or expedient to



                                                297
                      STRUCTURE OF THE GLOBAL OFFERING

exclude, whether due to the legal restrictions under the laws of his/her/its jurisdiction of residence
or the requirements of the relevant body or stock exchange in such jurisdiction. Accordingly, if you
are a GZI Ineligible Overseas Shareholder and you return an Election Form, your Election Form
will be treated as null and void.


    It is the responsibility of anyone outside Hong Kong wishing to exercise the GZI Qualifying
Shareholders’ Option to satisfy himself/herself/itself, before so exercising the option, as to the
observance of the laws and regulations of all relevant territories, including the obtaining of any
governmental or other consents and to pay any taxes and duties required to be paid in such
territory in connection therewith. GZI reserves the right to refuse to accept an Election Form if it
believes that the exercise of the GZI Qualifying Shareholders’ Option by the relevant GZI
Shareholder would violate the applicable securities or other laws or regulations of any jurisdiction.


    GZI’s decision in relation to whether all of the conditions of the exercise of the GZI Qualifying
Shareholders’ Option have been fulfilled will be conclusive. If, in the sole discretion of GZI, an
Election Form does not satisfy all of the conditions of exercise of the GZI Qualifying Shareholders’
Option, then the return of the Election Form and the Election Form shall be treated as null and void
and the relevant GZI Shareholder will be deemed not to have elected to exercise the GZI
Qualifying Shareholders’ Option.


    GZI Qualifying Shareholders may exercise the GZI Qualifying Shareholders’ Option either in
whole or in part. It is expected that the cash payment payable to GZI Qualifying Shareholders who
exercise the GZI Qualifying Shareholders’ Option as calculated on a per Unit basis will be
approximately equal to the Offer Price less applicable stamp duty (being 0.1% of the Offer Price
representing half of the amount of Hong Kong stamp duty payable by a GZI Qualifying Shareholder
who elects to exercise the GZI Qualifying Shareholders’ Option on the transfer of the Units that
would otherwise have been transferred to the relevant GZI Qualifying Shareholder pursuant to the
Special Dividend (GZI will bear the other half of the applicable stamp duty being 0.1% of the Offer
Price)) and applicable taxes (if any). GZI has decided to provide the GZI Qualifying Shareholders’
Option to GZI Qualifying Shareholders so as to provide them with a cash alternative in respect of
their dividend entitlement, whilst allowing GZI to comply with applicable laws with respect to the
effecting of the Special Dividend.


     All of the Units in respect of which the GZI Qualifying Shareholders’ Option is exercised will
be offered for sale by GZI (on behalf of those GZI Qualifying Shareholders who exercise the GZI
Qualifying Shareholders’ Option) through the Joint Global Coordinators under the Offer for Sale
which constitutes part of the International Offering. For GZI Ineligible Overseas Shareholders, who
will not be transferred any Units under the Special Dividend, the Units which such GZI
Shareholders would have otherwise been entitled to receive will be offered for sale by GZI (on
behalf of those GZI Ineligible Overseas Shareholders) through the Joint Global Coordinators
under the Offer for Sale which constitutes part of the International Offering. The GZI Ineligible
Overseas Shareholders will receive a cash payment on the basis of the number of Units which the
relevant GZI Ineligible Overseas Shareholder would otherwise have been entitled to receive



                                                 298
                      STRUCTURE OF THE GLOBAL OFFERING

pursuant to the Special Dividend at the Offer Price. It is expected that the cash payment payable
to GZI Ineligible Overseas Shareholders as calculated on a per Unit basis will be approximately
equal to the Offer Price less applicable stamp duty (being 0.1% of the Offer Price representing half
of the amount of Hong Kong stamp duty payable on the transfer of a Sale Unit) (GZI will bear the
other half of the applicable stamp duty being 0.1% of the Offer Price) and applicable taxes (if any).
The net proceeds of the sale of such Sale Units received by the Joint Global Coordinators, after
deducting applicable taxes (if any) and applicable stamp duty (being 0.1% of the Offer Price
representing half of the amount of Hong Kong stamp duty payable on the transfer of a Sale Unit),
will be used to fund the cash payment by GZI to the GZI Qualifying Shareholders who validly
exercise the GZI Qualifying Shareholders’ Option and the GZI Ineligible Overseas Shareholders.
The Special Dividend is subject to the conditions set out in the paragraph headed “Special
Dividend” above.


      An Election Form is being despatched to each GZI Qualifying Shareholder, together with an
electronic copy of this Offering Circular on CD ROM. GZI Qualifying Shareholders who wish to
exercise the GZI Qualifying Shareholders’ Option must return their Election Forms to GZI’s share
registrar, Abacus Share Registrars Limited at Ground Floor, Bank of East Asia Harbour View
Centre, 56 Gloucester Road, Wanchai, Hong Kong or Tricor Group Processing Centre, at
Workshop 14, 10th Floor, Honour Industrial Centre, 6 Sun Yip Street, Chai Wan, Hong Kong, so
as not to arrive later than 12:00 noon on Thursday, 15 December 2005. Units (if any) in respect
of which the GZI Qualifying Shareholders elect not to receive pursuant to the exercise of the GZI
Qualifying Shareholders’ Option and Units which the GZI Ineligible Overseas Shareholders would
otherwise have been entitled to receive under the Special Dividend will be allocated to the Offer
for Sale under the International Offering. It is expected that the Joint Global Coordinators will
underwrite the Offer for Sale and procure subscribers for the Sale Units pursuant to the
International Underwriting Agreement. Provided that the conditions of the Global Offering are
satisfied and the Global Offering is not terminated, the distribution by GZI of the Units to which GZI
Qualifying Shareholders are entitled to receive pursuant the Special Dividend (other than the Units
(if any) which such persons have elected not to receive pursuant to the exercise of the GZI
Qualifying Shareholders’ Option) will be made. The Units to which GZI Qualifying Shareholders
who validly exercise the GZI Qualifying Shareholders’ Option and any Units which the GZI
Ineligible Overseas Shareholders would otherwise have been entitled to receive pursuant to the
Special Dividend will be offered for sale by GZI (on behalf of such GZI Shareholders) through the
Joint Global Coordinators pursuant to the aforesaid underwriting arrangement and the Joint Global
Coordinators will procure purchasers for the Sale Units subject to the terms and conditions of the
International Underwriting Agreement.


      The Offer for Sale comprises the offer by GZI through the Joint Global Coordinators of an
aggregate of up to 17,000,000 Units (being the maximum aggregate number of Units representing:
(i) the Units in respect of which the GZI Qualifying Shareholders may elect to exercise the GZI
Qualifying Shareholders’ Option; and (ii) such number of Units which the GZI Ineligible Overseas
Shareholders would otherwise have been entitled to receive under the Special Dividend) for sale
to investors under the International Offering and will be underwritten by the Joint Global
Coordinators, in their capacity as the Sale Units Underwriters subject to the terms and conditions



                                                 299
                     STRUCTURE OF THE GLOBAL OFFERING

of the International Underwriting Agreement. The Sale Units will represent a maximum of
approximately 1.7% of the total number of issued Units of GZI REIT immediately following
completion of the Global Offering. The Offer for Sale is part of the International Offering and is
subject to the same conditions as those mentioned in the section headed “The International
Offering” above. The net proceeds from the Offer for Sale, after deduction of applicable taxes (if
any), applicable stamp duty (being 0.1% of the Offer Price representing half of the amount of Hong
Kong stamp duty payable on the transfer of a Sale Unit) will be applied towards the cash payment
by GZI to the GZI Qualifying Shareholders who validly exercise the GZI Qualifying Shareholders’
Option and the GZI Ineligible Overseas Shareholders.


     GZI Qualifying Shareholders will be entitled to apply for Units under the Global Offering. GZI
Qualifying Shareholders will receive no preference as to entitlement or allocation in respect of
applications for the Units being offered pursuant to the Hong Kong Public Offering made on WHITE
or YELLOW Application Forms or by giving electronic application instructions to HKSCC via
CCASS. GZI Qualifying Shareholders should refer to this Offering Circular, the formal notice
issued by GZI REIT in respect of the Global Offering and the Application Forms for further details
on the application for the Units being offered pursuant to the Hong Kong Public Offering.


     This Offering Circular and the Election Form to be issued to the GZI Qualifying Shareholders
in connection with the GZI Qualifying Shareholders’ Option will not be registered under any
applicable securities legislation of any country or jurisdiction outside Hong Kong. No GZI
Qualifying Shareholders’ Option is being offered to GZI Ineligible Overseas Shareholders and no
Election Forms will be sent to such persons.


Over-allocation Option and Stabilisation


  The Over-allocation Option


     In connection with the Global Offering and in connection with over-allocations in the
International Offering, if any, and other stabilising action in respect of the Units, GZI (through
Dragon Yield) is expected to grant to the Joint Global Coordinators the Over-allocation Option,
which will be exercisable at any time from the date of the International Underwriting Agreement up
to (and including) the date which is the 30th day after the last date for lodging Application Forms
under the Hong Kong Public Offering. Pursuant to the Over-allocation Option, GZI may be required
to make available up to 87,450,000 Units, representing approximately 15.0% of the total number
of Units initially available under the Global Offering (excluding the maximum number of 17,000,000
Sale Units which may be offered for sale by GZI (on behalf of the GZI Qualifying Shareholders who
exercise the GZI Qualifying Shareholders’ Option and the GZI Ineligible Overseas Shareholders)
through the Joint Global Coordinators under the Offer for Sale), to be offered to investors as part
of the International Offering. Any exercise of the Over-allocation Option will not affect the total
number of Units in issue. In the event that the Over-allocation Option is exercised, an
announcement will be published in the South China Morning Post (in English) and the Hong Kong
Economic Times (in Chinese).



                                               300
                      STRUCTURE OF THE GLOBAL OFFERING

  Stabilising Action


     In connection with the Global Offering, the Stabilising Manager on behalf of the International
Underwriters, in consultation with the Joint Global Coordinators, may over-allocate or effect
transactions with a view to supporting the market price of the Units at a level higher than that which
might otherwise prevail for a period of 30 days after the last day for lodging Application Forms
under the Hong Kong Public Offering. Such transactions, if commenced, may be discontinued at
any time. The Stabilising Manager has been or will be appointed as stabilising manager for the
purposes of the Global Offering and will conduct any stabilising activities (if any) on a basis
equivalent to that required under the Securities and Futures (Price Stabilising) Rules made under
the SFO and, should stabilising transactions be effected in connection with the Global Offering,
this will be at the absolute discretion of the Stabilising Manager in consultation with the Joint
Global Coordinators.


     Following any over-allocation of Units in connection with the Global Offering, the Stabilising
Manager or any person acting for it may cover such over-allocation by (among other methods)
making purchases in the secondary market for a period of 30 days after the last day for lodging
applications under the Hong Kong Public Offering, exercising the Over-allocation Option in full or
in part, or by any combination of purchases and exercise of the Over-allocation Option. Any such
purchases will be made in compliance with all applicable laws and regulatory requirements and on
a basis consistent with the Securities and Futures (Price Stabilising) Rules made under the SFO
as if those rules were directly applicable. The number of Units which can be over-allocated will not
exceed the number of Units which are the subject of the Over-allocation Option, being 87,450,000
Units representing approximately 15.0% of the Units initially available under the Global Offering
(excluding the Sale Units).


     In order to facilitate the settlement of over-allocations in connection with the Global Offering,
the Stabilising Manager (or its affiliate(s)) may choose to borrow Units from GZI REIT Unitholders
under unit borrowing arrangements, or acquire Units from other sources, including pending
exercise of Over-allocation Option. Such unit borrowing arrangements may include arrangements
agreed in principle between the Stabilising Manager and Dragon Yield, a wholly owned subsidiary
of GZI, under which Dragon Yield has agreed in principle to lend to the Stabilising Manager up to
87,450,000 Units for a period ending no later than three Business Days after the earlier of (i) the
last date for exercising the Over-allocation Option and (ii) the date on which the Over-allocation
Option is exercised in full. To the extent the Over-allocation Option is not exercised, a
corresponding number of Units will be returned to Dragon Yield.


     The possible stabilising action which may be taken by the Stabilising Manager in connection
with the Global Offering may involve (among other things): (i) over-allocation of Units; (ii)
purchases of Units; (iii) establishing, hedging and liquidating positions in Units; (iv) exercising the
Over-allocation Option in whole or in part; and/or (v) offering or attempting to do any of the
foregoing.




                                                 301
                      STRUCTURE OF THE GLOBAL OFFERING

     Specifically, prospective applicants for and investors in Units should note that:


     •    the Stabilising Manager may, in connection with the stabilising action, maintain a long
          position in the Units. There is no certainty regarding the extent to which and the time
          period for which the Stabilising Manager will maintain such a position;


     •    liquidation of any such long position by the Stabilising Manager may have an adverse
          impact on the market price of the Units;


     •    no Stabilising Action will be taken to support the price of the Units for longer than the
          stabilising period which will begin on the Listing Date, and is expected to expire at the
          end of 14 January 2006, being the day which is expected to be the 30th day after the
          last day for lodging Application Forms under the Hong Kong Public Offering. After this
          date, when no further action may be taken to support the price of the Units, demand for
          the Units, and therefore the price of the Units, could fall;


     •    the price of any security (including the Units) cannot be assured to stay at or above its
          offer price by taking any stabilising action; and


     •    stabilising bids may be made or transactions effected in the course of the stabilising
          action at any price at or below the Offer Price, which means that stabilising bids may be
          made or transactions effected at a price below the price paid by applicants for, or
          investors in, the Units.


     The Manager will ensure or procure that a public announcement, on a basis consistent with
the Securities and Futures (Price Stabilising) Rules as if those rules were directly applicable, will
be made within seven days of the expiration of the stabilising period.




                                                302
                                            EXPERTS


 PricewaterhouseCoopers, Colliers International (Hong Kong) Ltd, Cushman & Wakefield (HK)               App B
                                                                                                        B22
 Limited and each of the Joint Global Coordinators have each given and have not withdrawn
 their respective written consents to the issue of this Offering Circular with the inclusion of their
 reports and/or opinions and/or memorandum and/or valuation certificates and/or summary
 thereof (as the case may be) and/or references to their names included herein in the form and
 context in which they are respectively included.


     PricewaterhouseCoopers is a firm of certified public accountants.


     Colliers International (Hong Kong) Ltd was responsible for (i) conducting a survey and
valuation of the Properties; (ii) producing detailed and summary reports in relation to the findings
thereof; and (iii) reviewing the forecast of Rental Income for the Properties and the underlying
assumptions used by the Manager for the purpose of the profit forecast set out in the section
headed “Profit Forecast” in this Offering Circular.


      Cushman & Wakefield (HK) Limited was responsible for (i) carrying out a comprehensive
study of the commercial property market in Guangzhou; and (ii) producing a comprehensive report
in relation to the findings thereof.


      The Hongkong and Shanghai Banking Corporation Ltd is a deemed licensed corporation
under the SFO to carry on regulated activity types 1, 4, 6, 7 and 9 as defined under the SFO and
a licensed bank under the Banking Ordinance.


     Citigroup Global Markets Asia Limited is a deemed licensed corporation under the SFO for
regulated activity types 1, 4 and 6 as defined under the SFO.


     DBS Bank Ltd. is a deemed registered institution under the SFO for regulated activity types
1, 4 and 6 as defined under the SFO and a licensed bank under the Banking Ordinance.




                                                 303
         HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS

1.   Who can apply for the Hong Kong Public Offering Units                                               App B
                                                                                                         B11


     If the applicant, or any person(s) for whose benefit the applicant is applying, is an individual,
the applicant can apply for Hong Kong Public Offering Units if he/she/they:


     •    is/are 18 years of age or older;


     •    has/have a Hong Kong address; and


     •    is/are not a US Person.


      If the applicant is a firm, the application must be in the names of the individual members, not
the firm’s name. If the applicant is a body corporate, the Application Form must be signed by a duly
authorised officer, who must state his or her representative capacity.


      The Directors and their associates do not intend to apply for Hong Kong Public Offering Units.
However, certain Directors and/or their associates are GZI Qualifying Shareholders and will be
entitled to receive Units under the Special Dividend.


    Directors’ holdings will be disclosed by way of an announcement (published in the South
China Morning Post (in English) and the Hong Kong Economic Times (in Chinese)) prior to the day
on which dealings in Units commence on the Hong Kong Stock Exchange.


     If an application is made by a person duly authorised under a valid power of attorney, the
Joint Global Coordinators (or their respective agents or nominees) may accept it at their
discretion, and subject to any conditions they think fit, including production of evidence of the
authority of the attorney.


     The number of joint applicants may not exceed two.


2.   Methods to apply for Hong Kong Public Offering Units


    An applicant may apply for Hong Kong Public Offering Units by using one of the following
methods:


     •    using a WHITE or YELLOW Application Form; or


     •    electronically instructing HKSCC via CCASS to cause HKSCC Nominees to apply for
          Hong Kong Public Offering Units on the applicant’s behalf.


    Multiple or suspected multiple applications are liable to be rejected. Please see subsection
headed “How many applications can be made” below for further details.



                                                 304
           HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS

3.   Which application method to use

     Please choose the correct application method carefully. If an applicant does not use
the correct application method to apply for the Hong Kong Public Offering Units, his/her/its
application is liable to be rejected.

     (a)   WHITE Application Forms

           Use a WHITE Application Form if an applicant wants the Hong Kong Public Offering
           Units to be registered in his/her/its own name. An applicant may apply for the Hong
           Kong Public Offering Units with one other joint applicant. Use a WHITE Application Form
           if an applicant applies on behalf of another person and wants the Hong Kong Public
           Offering Units to be registered in his/her/its own name as nominee.

     (b)   YELLOW Application Forms

           Use a YELLOW Application Form if an applicant wants the Hong Kong Public Offering
           Units to be registered in the name of HKSCC Nominees and deposited directly into
           CCASS for credit to the applicant’s CCASS Investor Participant stock account or the
           applicant’s designated CCASS Participant’s stock account. An applicant may apply for
           Hong Kong Public Offering Units with one other joint applicant.

     (c)   Instruct HKSCC to make an electronic application on the applicant’s behalf via
           CCASS

           Instead of using a YELLOW Application Form, an applicant may electronically instruct
           HKSCC via CCASS to cause HKSCC Nominees to apply for the Hong Kong Public
           Offering Units on the applicant’s behalf. Any Hong Kong Public Offering Units allocated
           to the applicant will be registered in the name of HKSCC Nominees and deposited
           directly into CCASS for credit to the applicant’s CCASS Investor Participant stock
           account or the applicant’s designated CCASS Participant’s stock account.

4.   Where to collect the Offering Circular and the Application Forms

     (a)   Applicants can collect this Offering Circular during normal business hours from 9:00
           a.m. on Monday, 12 December 2005 until 12:00 noon on Thursday, 15 December 2005
           from:

           Any participant of the Hong Kong Stock Exchange

           The Hongkong and Shanghai Banking             1 Queen’s Road Central, Central, Hong
             Corporation Limited                         Kong

           Citigroup Global Markets Asia Limited         50th Floor, Citibank Tower, Citibank
                                                         Plaza, 3 Garden Road, Central, Hong
                                                         Kong



                                               305
HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS

DBS Bank Ltd.                                 22nd Floor, The Center, 99 Queen’s
                                              Road Central, Central, Hong Kong

BOCI Asia Limited                             26th Floor, Bank of China Tower, 1
                                              Garden Road, Central, Hong Kong

First Shanghai Securities Limited             19th Floor, Wing On House, Des Voeux
                                              Road Central, Hong Kong

BCOM Securities Company Limited               3rd Floor, Far East Consortium Building,
                                              121 Des Voeux Road Central, Hong Kong

Goldbond Securities Limited                   3901B, 39th Floor, Tower 1, Lippo
                                              Centre, 89 Queensway, Hong Kong

Kim Eng Securities (Hong Kong)                Room 1901, Bank of America Tower, 12
  Limited                                     Harcourt Road, Central, Hong Kong

Tai Fook Securities Company Limited           25th Floor, New World Tower, 16-18
                                              Queen’s Road Central, Hong Kong

Applicants can also collect this Offering Circular during normal business hours from
9:00 am on Monday, 12 December 2005 until 4:30 p.m. on Wednesday, 14 December
2005 and from 9:00 am until 12:00 noon on Thursday, 15 December 2005 from any of
the following branches of:

The Hongkong and Shanghai Banking Corporation Limited
Hong Kong Island Aberdeen Centre Branch              Shop 2 G/F Site I, Aberdeen
                                                     Centre, Aberdeen, Hong Kong
                 Cityplaza Branch                    Unit 065, Cityplaza I, Taikoo Shing,
                                                     Hong Kong
                 Des Voeux Road West Branch          Western Centre, 40-50 Des Voeux
                                                     Road West, Hong Kong
                 Happy Valley Branch                 G/F, Sun & Moon Building, 45 Sing
                                                     Woo Road, Happy Valley, Hong
                                                     Kong
                 Hopewell Centre Branch              Shop No.1-2, G/F, Hopewell Centre,
                                                     183 Queen’s Road East, Wan Chai,
                                                     Hong Kong
                 Pacific Place Branch                Shop 401, Pacific Place, 88
                                                     Queensway, Hong Kong




                                    306
HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS

Kowloon           Festival Walk Branch                 Shop LG1-37, Festival Walk, 80 Tat
                                                       Chee Avenue, Kowloon Tong,
                                                       Kowloon
                  Kwun Tong Branch                     1 Yue Man Square, Kwun Tong,
                                                       Kowloon
                  Peninsula Centre Branch              Peninsula Centre, 67 Mody Road,
                                                       Tsim Sha Tsui East, Kowloon
                  Pioneer Centre Branch                Shop 115, 1/F, Pioneer Centre, 750
                                                       Nathan Road, Kowloon


New Territories   Citylink Plaza Branch                Shops 38-46, Citylink Plaza, Shatin
                                                       Station Circuit, Shatin, New
                                                       Territories
                  Tuen Mun Town Plaza Branch           Shop 1, UG/F, Shopping Arcade
                                                       Phase II, Tuen Mun Town Plaza,
                                                       New Territories


Bank of China (Hong Kong) Limited
Hong Kong Island Bank of China Tower Branch            3/F, 1 Garden Road, Central, Hong
                                                       Kong
                  Central District (Wing On House)     71 Des Voeux Road Central, Hong
                    Branch                             Kong
                  Shek Tong Tsui Branch                534 Queen’s Road West, Shek Tong
                                                       Tsui, Hong Kong
                  Taikoo Shing Branch                  Shop G1006-7, Hoi Sing Mansion,
                                                       Taikoo Shing, Hong Kong
                  North Point (Kiu Fai Mansion) Branch 413-415 King’s Road
                                                       North Point,
                                                       Hong Kong


Kowloon           Kwun Tong Branch                     20-24 Yue Man Square, Kwun Tong,
                                                       Kowloon
                  Mong Kok (President Commercial       608 Nathan Road, Mong Kok,
                    Centre) Branch                     Kowloon
                  Mei Foo Mount Sterling Mall Branch   Shop N47-49 Mount Sterling Mall,
                                                       Mei Foo Sun Chuen, Kowloon
                  Diamond Hill Branch                  G107, Plaza Hollywood, Diamond
                                                       Hill, Kowloon
                  Tsim Sha Tsui East Branch            Shop G02-03, Inter-Continental
                                                       Plaza, 94 Granville Road, Tsim Sha
                                                       Tsui, Kowloon




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HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS



New Territories   Castle Peak Road (Tsuen Wan)       167 Castle Peak Road, Tsuen Wan,
                    Wealth Management Centre         New Territories
                  Lucky Plaza Branch                 Lucky Plaza, Wang Pok Street,
                                                     Shatin, New Territories


Bank of Communications Co., Ltd., Hong Kong Branch
Hong Kong Island Hong Kong Branch                    20 Pedder Street, Central, Hong
                                                     Kong
                  Central District Sub-Branch        125A Des Voeux Road, Central,
                                                     Hong Kong
                  King’s Road Sub-Branch             67-71 King’s Road, North Point,
                                                     Hong Kong


Kowloon           Kowloon Sub-Branch                 563 Nathan Road, Kowloon
                  Cheung Sha Wan Plaza Sub-Branch    Unit G04, Cheung Sha Wan Plaza,
                                                     833 Cheung Sha Wan Road,
                                                     Kowloon
                  Hunghom Sub-Branch                 1-3A Tak Man Street, Whampoa
                                                     Estate, Hunghom, Kowloon
                  Ngau Tau Kok Sub-Branch            Shop G1, G/F., Phase I, Amoy
                                                     Plaza, 77 Ngau Tau Kok Road,
                                                     Kowloon
                  Wong Tai Sin Sub-Branch            Shops 127-129, 1/F Lung Cheung
                                                     Mall, 136 Lung Cheung Road,
                                                     Wong Tai Sin, Kowloon


New Territories   Tseung Kwan O Sub-Branch           Shops 253-255, Metro City
                                                     Shopping Arcade, Phase I, Tseung
                                                     Kwan O, New Territories
                  Tsuen Wan Sub-Branch               Shop G10-11, Pacific Commercial
                                                     Plaza, Bo Shek Mansion, 328 Sha
                                                     Tsui Road, Tsuen Wan,
                                                     New Territories
                  Shatin Sub-Branch                  Shop No. 193, Level 3, Lucky
                                                     Plaza, 1-15 Wang Pok Street,
                                                     Shatin, New Territories
                  Sheung Shui Sub-Branch             Shops 10-14, G/F., Sheung Shui
                                                     Centre Shopping Arcade, Sheung
                                                     Shui, New Territories




                                       308
          HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS

    (b)   Applicants can collect a WHITE Application Form and this Offering Circular during the
          following times at any of the places set out in sub-paragraph (a) above:

                    Monday,    12   December   2005    —   9:00   a.m.   to   4:30 p.m.
                    Tuesday,   13   December   2005    —   9:00   a.m.   to   4:30 p.m.
                  Wednesday,   14   December   2005    —   9:00   a.m.   to   4:30 p.m.
                   Thursday,   15   December   2005    —   9:00   a.m.   to   12:00 noon


    (c)   Applicants can collect a YELLOW Application Form and this Offering Circular during
          normal business hours from 9:00 a.m. on Monday, 12 December 2005 until 12:00 noon
          on Thursday, 15 December 2005 from:


          (i)    the Depository Counter of HKSCC at 2nd Floor, Vicwood Plaza, 199 Des Voeux
                 Road Central, Hong Kong; or


          (ii)   the Customer Service Centre of HKSCC at Upper Ground Floor, V-Heun Building,
                 128-140 Queen’s Road Central, Hong Kong.


    (d)   Applicants’ brokers may have the Application Forms available.


5   How to apply using a WHITE or YELLOW Application Form


    (a)   Obtain a WHITE or YELLOW Application Form as appropriate.


    (b)   Applicants should read the instructions in this Offering Circular and the relevant
          Application Form carefully. If an applicant does not follow the instructions,
          his/her/its application is liable to be rejected and returned by ordinary post
          together with the accompanying cheque or banker’s cashier order to the applicant
          (or the first-named applicant in the case of joint applicants) at the applicant’s own
          risk to the address stated on the applicant’s Application Form.


    (c)   Complete the Application Form in English (save as otherwise indicated) and sign it. Only
          written signatures will be accepted. Applications made by corporations, whether on their
          own behalf, or on behalf of other persons, must be stamped with the company chop
          (bearing the company name) and signed by a duly authorised officer, whose
          representative capacity must be stated. If an applicant is applying for the benefit of
          someone else, the applicant, rather than that person, must sign the Application Form.
          If it is a joint application, all applicants must sign it. If an application is made through a
          duly authorised attorney, the Joint Global Coordinators (or their agents or nominees)
          may accept it at their discretion, and subject to any conditions they think fit, including
          production of evidence of the authority of the attorney.




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      HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS

(d)   Each Application Form must be accompanied by either one cheque or one banker’s
      cashier order, which must be stapled to the top left-hand corner of the Application Form.

      If payment is made by cheque, the cheque must:

      —    be in Hong Kong dollars;

      —    be drawn on a Hong Kong dollar bank account in Hong Kong;

      —    show the applicant’s account name, which must either be pre-printed on the
           cheque, or be endorsed on the back by a person authorised by the bank. This
           account name must be the same as the name in the Application Form. If the
           application is a joint application, the account name must be the same as the name
           of the first-named applicant;

      —    be made payable to “HSBC Nominees (Hong Kong) Limited — GZI REIT Public
           Offer” or “                —                  ”;

      —    be crossed “Account Payee Only”; and

      —    not be post-dated.

      An application is liable to be rejected if the cheque does not meet all these requirements
      or is dishonoured on its first presentation.

      If payment is made by banker’s cashier order, the banker’s cashier order must:

      —    be in Hong Kong dollars;

      —    be issued by a licensed bank in Hong Kong and have the applicant’s name certified
           on the back by a person authorised by the bank on which it is drawn. The name on
           the back of the banker’s cashier order and the name on the Application Form must
           be the same. If the application is a joint application, the name on the back of the
           banker’s cashier order must be the same as the name of the first-named joint
           applicant;

      —    be made payable to “HSBC Nominees (Hong Kong) Limited — GZI REIT Public
           Offer” or “                —                  ”;

      —    be crossed “Account Payee Only”; and

      —    not be post-dated.

      An application is liable to be rejected if the banker’s cashier order does not meet all
      these requirements.

      No money shall be paid to any intermediary in Hong Kong who is not licensed or               App B
                                                                                                   B12
      registered to carry on Type 1 regulated activity under Part V of the SFO.



                                           310
      HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS

(e)   Lodge the Application Form in one of the collection boxes by the time and at one of the
      locations, as respectively referred to in paragraph (a) of the sub-section headed “When
      to apply for the Hong Kong Public Offering Units” above.

(f)   Multiple or suspected multiple applications are liable to be rejected. Please see the
      sub-section headed “How many applications can be made” below.

(g)   In order for an application made on the YELLOW Application Form to be valid:

      —    If an applicant is applying through a designated CCASS Participant (other than a
           CCASS Investor Participant):

           —    the designated CCASS Participant or its authorised signatories must sign in
                the appropriate box; and

           —    the designated CCASS Participant must endorse the form with its company
                chop (bearing its company name) and insert its participant I.D. in the
                appropriate box.

      —    If an applicant is applying as an individual CCASS Investor Participant:

           —    the applicant must fill in the applicant’s full name and Hong Kong Identity
                Card number; and

           —    the applicant must insert the applicant’s participant I.D. and sign in the
                appropriate box.

      —    If an applicant is applying as a joint individual CCASS Investor Participant:

           —    the applicant must insert all joint CCASS Investor Participants’ names and the
                Hong Kong Identity Card numbers of all joint CCASS Investor Participants;
                and

           —    the applicant must insert the applicant’s participant I.D. and the authorised
                signatory(ies) of the CCASS Investor Participant’s stock account must sign in
                the appropriate box.

      —    if an applicant is applying as a corporate CCASS Investor Participant:

           —    the applicant must insert the applicant’s company name and the company’s
                Hong Kong business registration number; and

           —    the applicant must fill in the applicant’s participant I.D. and stamp the
                applicant’s company chop (bearing the company’s name) endorsed by the
                authorised signatory(ies) of the CCASS Investor Participant’s stock account,
                in the appropriate box.



                                          311
          HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS

          The signature(s), number of signatories and form of chop, where appropriate, in each
          YELLOW Application Form should match the records kept by HKSCC. Incorrect or
          incomplete details of the CCASS Participant or the omission or inadequacy of
          authorised signatory or signatories (if applicable), CCASS Participant I.D. or other
          similar matters may render the application invalid.

    (h)   Nominees who wish to submit separate applications in their names on behalf of different
          beneficial owners are requested to designate on each Application Form in the box
          marked “For nominees” an account number or other identification code for each
          beneficial owner or, in the case of joint beneficial owners, for each such beneficial
          owner. Failure to provide the account number(s) or other identification code(s) for the
          beneficial owner(s) will result in the application being deemed to be submitted for the
          benefit of the nominee(s) in question. The attention of nominees is also drawn to the
          sub-section headed “How many applications can be made” below.

6   How to apply by giving electronic application instructions to HKSCC

    (a)   General

          CCASS Participants may give electronic application instructions to HKSCC via CCASS
          to apply for Hong Kong Public Offering Units and to arrange payment of the money due
          on application and payment of refunds. This will be in accordance with their participant
          agreements with HKSCC and the General Rules of CCASS and the CCASS Operational
          Procedures.

          If an applicant is a CCASS Investor Participant, the applicant may give electronic
          application instructions through the CCASS Phone System by calling 2979 7888 or
          CCASS Internet System at https://ip.ccass.com (using the procedures contained in
          HKSCC’s “An Operating Guide for Investor Participants” in effect from time to time).
          HKSCC can also input electronic application instructions for an applicant if the applicant
          goes to:

          HKSCC’s Customer Service Centre
          Upper Ground Floor,
          V-Heun Building,
          128-140 Queen’s Road Central,
          Hong Kong

          and complete an input request form.

          Offering Circulars are available for collection from the above address.

          If an applicant is not a CCASS Investor Participant, the applicant may instruct
          his/her/its broker or custodian who is a CCASS Broker Participant or a CCASS
          Custodian Participant to give electronic application instructions via CCASS terminals to
          apply for the Hong Kong Public Offering Units.



                                               312
      HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS

      Applicants are deemed to have authorised HKSCC and/or HKSCC Nominees to transfer
      the details of their applications whether submitted by themselves or through their
      brokers or custodians to the Manager, the Trustee, the Joint Global Coordinators and
      the Unit Registrar.


(b)   Application by HKSCC Nominees


      Where a WHITE Application Form is signed by HKSCC Nominees on behalf of persons
      who have given electronic application instructions to apply for the Hong Kong Public
      Offering Units:


      (i)    HKSCC Nominees is only acting as nominee for those persons and shall not be
             liable for any breach of the terms and conditions of the WHITE Application Form or
             this Offering Circular; and


      (ii)   HKSCC Nominees does all the things on behalf of each of such persons as stated
             in sub-paragraphs (a) and (c) in the section headed “Further Terms and Conditions
             of the Hong Kong Public Offering — Effect of making any application” in this
             Offering Circular.


(c)   Minimum subscription amount and permitted multiples


      An applicant may give electronic application instructions in respect of a minimum of
      1,000 Hong Kong Public Offering Units. Each electronic application instruction in
      respect of more than 1,000 Hong Kong Public Offering Units must be in one of the
      numbers set out in the table in the Application Form.


(d)   Multiple applications


      If an applicant is suspected of having made multiple applications or if more than one
      application is made for the applicant’s benefit, the number of Hong Kong Public Offering
      Units applied for by HKSCC Nominees will be automatically reduced by the number of
      Hong Kong Public Offering Units in respect of which the applicant has given such
      electronic application instruction and/or in respect of which such electronic application
      instruction have been given for the applicant’s benefit. Any electronic instructions to
      make an application for Hong Kong Public Offering Units given by the applicant or for
      the applicant’s benefit to HKSCC shall be deemed to be an actual application.


(e)   Allocation of the Hong Kong Public Offering Units


      For the purpose of allocating the Hong Kong Public Offering Units, HKSCC Nominees
      shall not be treated as an applicant. Instead, each CCASS Participant who gives
      electronic application instructions or each person for whose benefit each such
      instruction is given shall be treated as an applicant.



                                            313
             HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS


                                               Warning

         Application for Hong Kong Public Offering Units by giving electronic application
    instructions to HKSCC is only a facility provided to CCASS Participants. The Manager,
    the Joint Global Coordinators and any parties involved in the Hong Kong Public Offering
    take no responsibility for the application and provide no assurance that any CCASS
    Participant will be allotted any Hong Kong Public Offering Units.

         To ensure that CCASS Investor Participants can give their electronic application
    instructions to HKSCC through the CCASS Phone System or CCASS Internet System,
    CCASS Investor Participants are advised not to wait until the last minute to input
    instructions. If CCASS Investor Participants have problems in connecting to the CCASS
    Phone System or CCASS Internet System for submission of electronic application
    instructions, they should either:

        (a)    submit the WHITE or YELLOW Application Form (as appropriate); or

        (b)    go to HKSCC’s Customer Service Centre to complete an application instruction input
               request form before 12:00 noon on Thursday, 15 December 2005 or such later time
               as described under the paragraph headed “Effect of bad weather conditions on the
               opening of the application lists” in the sub-section headed “When to apply for the
               Hong Kong Public Offering Units” below.


7      When to apply for the Hong Kong Public Offering Units


       (a)    WHITE or YELLOW Application Forms


              Completed WHITE or YELLOW Application Forms, with a cheque or banker’s cashier
              order attached, must be lodged by 12:00 noon on Thursday, 15 December 2005, or, if
              the application lists are not open on that day, by the time and date stated in the
              paragraph headed “Effect of bad weather conditions on the opening of the application
              lists” below.


              Completed WHITE or YELLOW Application Forms, with one cheque or one banker’s
              cashier order attached, should be deposited in the special collection boxes provided at
              any of the branches of The Hongkong and Shanghai Banking Corporation Limited, Bank
              of China (Hong Kong) Limited and Bank of Communications Co., Ltd. Hong Kong
              Branch stated above at the following times:

                      Monday,     12   December   2005   —   9:00   a.m.   to   4:30 p.m.
                      Tuesday,    13   December   2005   —   9:00   a.m.   to   4:30 p.m.
                    Wednesday,    14   December   2005   —   9:00   a.m.   to   4:30 p.m.
                     Thursday,    15   December   2005   —   9:00   a.m.   to   12:00 noon




                                                   314
      HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS

      Completed WHITE and YELLOW Application Forms, with one cheque or one banker’s
      cashier order attached, may also be submitted to the applicant’s broker allowing
      sufficient time for the broker to deliver the Application Form to any of the branches of
      The Hongkong and Shanghai Banking Corporation Limited, Bank of China (Hong Kong)
      Limited and Bank of Communications Co., Ltd. Hong Kong Branch stated above by
      12:00 noon on Thursday, 15 December 2005. However, if the broker fails to deliver the
      applicant’s Application Form to any of the abovementioned branches by 12:00 noon on
      Thursday, 15 December 2005, the relevant application will not be accepted and neither
      GZI REIT nor anyone else connected with the Hong Kong Public Offering will be
      responsible for any loss incurred thereby.


(b)   Electronic application instructions to HKSCC via CCASS


      CCASS Broker/Custodian Participants should input electronic application instructions at
      the following times:

              Monday,         12   December     2005     —   9:00   a.m. to 8:30 p.m.(1)
              Tuesday,        13   December     2005     —   9:00   a.m. to 8:30 p.m.(1)
            Wednesday,        14   December     2005     —   9:00   a.m. to 8:30 p.m.(1)
             Thursday,        15   December     2005     —   9:00   a.m.(1) to 12:00 noon


      Note 1:   These times are subject to change as HKSCC may determine from time to time with prior notification
                to CCASS Broker/Custodian Participants.


      CCASS Investor Participants can input electronic application instructions from 9:00 a.m.
      on Monday, 12 December 2005 until 12:00 noon on Thursday, 15 December 2005 (24
      hours daily, except the last application day).


      The latest time for inputting electronic application instructions via CCASS (if the
      applicant is a CCASS Participant) is 12:00 noon on Thursday, 15 December 2005 or if
      the application lists are not open on that day, by the time and date stated in the
      paragraph headed “Effect of bad weather conditions on the opening of the application
      lists” below.


(c)   Application lists


      The application lists will be open from 11:45 a.m. to 12:00 noon on Thursday, 15
      December 2005, except as provided in the paragraph headed “Effect of bad weather
      conditions on the opening of the application lists” below. Applicants should note that
      cheques or banker’s cashier orders will not be presented for payment before the closing
      of the application lists but may be presented at any time thereafter.




                                                   315
          HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS

    (d)   Effect of bad weather conditions on the opening of the application lists


          The application lists will be open between 11:45 a.m. and 12:00 noon on Thursday, 15
          December 2005, subject to weather conditions. The application lists will not be open in
          relation to the Hong Kong Public Offering if there is:


          —    a tropical cyclone warning signal number 8 or above; or


          —    a “black” rainstorm warning signal,


          in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Thursday, 15
          December 2005. Instead, the application lists will be open between 11:45 a.m. and
          12:00 noon on the next Business Day.


8   How many applications can be made


    Multiple or suspected multiple applications are liable to be rejected.


    (a)   Applicants may make more than one application for the Hong Kong Public
          Offering Units if and only if the applicant is a nominee, in which case the applicant
          may make an application as a nominee by: (i) giving electronic application
          instructions to HKSCC (if the applicant is a CCASS Participant); and (ii) lodging
          more than one application in the applicant’s own name on behalf of different
          beneficial owners. In the box on the Application Form marked “For nominees” the
          applicant must include:


          —    an account number; or


          —    some other identification number,


          for each beneficial owner or, in the case of joint beneficial owners, for each such
          beneficial owner. If the applicant does not include this information, the application will
          be treated as being for the applicant’s benefit.


          Otherwise, multiple applications are liable to be rejected.


    (b)   Save as referred to above, all of the applications of an applicant under the Hong Kong
          Public Offering are liable to be rejected as multiple applications if the applicant, or the
          applicant and any other joint applicant together:


          —    makes more than one application (whether individually or jointly with others) on a
               WHITE or YELLOW Application Form or by giving electronic application
               instructions to HKSCC; or



                                                316
           HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS

           —    applies on one WHITE or YELLOW Application Form (whether individually or
                jointly with others) or by giving electronic application instructions to HKSCC to
                apply for more than 30,000,000 Units, being 50% of the Hong Kong Public Offering
                Units initially made available for subscription under the Hong Kong Public Offering;
                or


           —    has indicated an interest for, or has received or will receive, any International
                Offering Units in the International Offering.


     (c)   All of the applications of an applicant are also liable to be rejected as multiple
           applications if more than one application is made for the applicant’s benefit (including
           the part of the application made by HKSCC Nominees acting on electronic application
           instructions). If an application is made by an unlisted company and: (i) the only business
           of that company is dealing in securities; and (ii) the applicant exercises statutory control
           over that company, then the application will be treated as being for the applicant’s
           benefit. Unlisted company means a company with no equity securities listed on the
           Hong Kong Stock Exchange. Statutory control in relation to a company means the
           applicant: (i) controls the composition of the board of directors of that company; or (ii)
           controls more than half of the voting power of that company; or (iii) holds more than half
           of the issued share capital of that company (not counting any part of it which carries no
           right to participate beyond a specified amount in a distribution of either profits or
           capital).


9    How much to pay for the Hong Kong Public Offering Units


     Applicants must pay the Maximum Offer Price of HK$3.075 per Hong Kong Public Offering                App B
                                                                                                          B14 (a)
Unit, plus brokerage of 1%, Hong Kong Stock Exchange trading fee of 0.005% and SFC
transaction levy of 0.005% in full, when they apply for the Hong Kong Public Offering Units. The
Application Forms have tables showing the exact amount payable for the numbers of Units applied
for up to 30,000,000 Units.


     If an application is successful, brokerage is paid to participants of the Hong Kong Stock
Exchange, the Hong Kong Stock Exchange trading fee is paid to the Hong Kong Stock Exchange,
and the SFC transaction levy is paid to the SFC.


     Appropriate refund payments representing the difference (if any) between the Offer Price and
the Maximum Offer Price (including brokerage, Hong Kong Stock Exchange trading fee, SFC
transaction levy attributable to the surplus application monies) will be made to successful
applicants without interest.




                                                 317
         HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS

10   Publication of results


     The Manager expects to announce the Offer Price, the level of indications of interest in the
International Offering, the results of applications in the Hong Kong Public Offering, the basis of
allocations of the Hong Kong Public Offering Units, the final number of Hong Kong Public Offering
Units comprised in the Hong Kong Public Offering, Pool A and Pool B, respectively, and the Hong
Kong identity card/passport/Hong Kong business registration numbers of successful applicants
under the Hong Kong Public Offering, as well as the details of exercise, if any, of the GZI
Qualifying Shareholders’ Option, on or before Tuesday, 20 December 2005 in the South China
Morning Post (in English) and the Hong Kong Economic Times (in Chinese).


11   Dispatch/collection of Unit certificates and refund of application monies


     For details please refer to the sub-sections headed “If an application for the Hong Kong
Public Offering Units is successful (in whole or in part)” and “Refund of money — additional
information” in the section headed “Further Terms and Conditions of the Hong Kong Public
Offering” in this Offering Circular.


     Wholly or partly successful applicants will receive one Unit certificate for all the Hong Kong
Public Offer Units issued to them except pursuant to applications made on YELLOW application
form or by giving electronic application instructions to HKSCC where the Unit certificates will be
deposited into CCASS.


12   Commencement of dealings in the Units on the Hong Kong Stock Exchange


      Dealings in the Units on the Hong Kong Stock Exchange are expected to commence on
Wednesday, 21 December 2005. Units will be traded on the Hong Kong Stock Exchange in board
lots of 1,000 Units each.




                                               318
    FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

1     General

      (a)   If an applicant applies for Hong Kong Public Offering Units in the Hong Kong Public
            Offering, the applicant will be agreeing with the Manager and the Joint Global
            Coordinators (on behalf of the Hong Kong Underwriters) as set out below.

      (b)   If an applicant electronically instructs HKSCC via CCASS to cause HKSCC Nominees
            to apply for the Hong Kong Public Offering Units on the applicant’s behalf, the applicant
            will have authorised HKSCC Nominees to apply on the terms and conditions set out
            below, as supplemented and amended by the terms and conditions applicable to the
            relevant application method.

      (c)   In this section, references to “applicants”, “joint applicants” and other like references
            shall, if the context so permits, include references to both nominees and principals on
            whose behalf HKSCC Nominees is applying for the Hong Kong Public Offering Units;
            and references to the making of an application shall, if the context so permits, include
            references to making applications electronically by giving instructions to HKSCC.

      (d)   Applicants should read this Offering Circular carefully, including other terms and
            conditions of the Hong Kong Public Offering, and the terms and conditions set out in the
            sections headed “Structure of the Global Offering” and “How to apply for Hong Kong
            Public Offering Units” in this Offering Circular, and the relevant Application Form or
            imposed by HKSCC prior to making an application.

2     Offer to acquire the Hong Kong Public Offering Units

      (a)   Applicants offer to subscribe for at the Offer Price the number of the Hong Kong Public
            Offering Units indicated in their Application Forms or in their applications inputted via
            CCASS electronically as the case may be (or any smaller number in respect of which the
            application is accepted) on the terms and conditions set out in this Offering Circular and
            the relevant Application Form.

      (b)   For applicants using Application Forms, where applicable, a refund cheque in respect of
            the surplus application monies (if any) representing the Hong Kong Public Offering Units
            applied for but not allocated to them and representing the difference (if any) between the
            Offer Price and the Maximum Offer Price (including, in each case, the brokerage, Hong
            Kong Stock Exchange trading fee and SFC transaction levy attributable thereto), is
            expected to be sent to them at their own risk to the address stated on their Application
            Forms on or before Tuesday, 20 December 2005.

            Details of the procedure for refunds relating to each of the Hong Kong Public Offering
            methods are contained below in the sub-sections headed “If an application for the Hong
            Kong Public Offering Units is successful (in whole or in part)” and “Refund of money —
            additional information” in this section.

      (c)   Any application may be rejected in whole or in part.



                                                 319
FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

  (d)   Applicants under the Hong Kong Public Offering should note that in no circumstances
        can applications be withdrawn once submitted.


  (e)   The total number of Hong Kong Public Offering Units available under the Hong Kong
        Public Offering will initially be divided equally into two pools for allocation purposes:
        Pool A and Pool B. All valid applications that have been received for Hong Kong Public
        Offering Units with a total subscription amount (excluding brokerage, Hong Kong Stock
        Exchange trading fee and SFC transaction levy payable thereon) of HK$5,000,000 or
        below will fall into Pool A and all valid applications that have been received for Hong
        Kong Public Offering Units with a total subscription amount (excluding brokerage, Hong
        Kong Stock Exchange trading fee and SFC transaction levy payable thereon) of more
        than HK$5,000,000 will fall into Pool B.


        The number of Hong Kong Public Offering Units comprised in Pool A and Pool B will not
        be determined until after applications have been made. The Manager and the Joint
        Global Coordinators shall have discretion in determining the number of Hong Kong
        Public Offering Units which shall comprise each of Pool A and Pool B. The number of
        Hong Kong Public Offering Units comprised in each of Pool A and Pool B will initially be
        divided equally between the two pools. However, if demand for Hong Kong Public
        Offering Units falling within Pool A is significant or otherwise justified, and irrespective
        of whether Pool B is undersubscribed or not, it is expected that the number of Hong
        Kong Public Offering Units comprising Pool A will be increased in order to increase the
        allocation ratio of Pool A, with a view to allowing more Pool A applicants to receive
        allocations of Hong Kong Public Offering Units. Hong Kong Public Offering Units in each
        of Pool A and Pool B will be allocated on an equitable basis to applicants falling within
        each pool.


        Applicants should be aware that applications in Pool B are likely to receive different
        allocation ratios than applications in Pool A. Where either of the pools is
        undersubscribed, the surplus Hong Kong Public Offering Units will be transferred to
        satisfy demand in the other pool and be allocated accordingly. Applicants can only
        receive an allocation of Hong Kong Public Offering Units from Pool A or Pool B but not
        from both pools. Multiple or suspected multiple applications and any application for
        more than 50% of the Hong Kong Public Offering Units initially available under the Hong
        Kong Public Offering (that is, 30,000,000 Hong Kong Public Offering Units) will be
        rejected. Each applicant under the Hong Kong Public Offering will also be required to
        give an undertaking and confirmation in the Application Form submitted by him/her/it
        that he/she/it and any person(s) for whose benefit he/she/it is making the application
        have not indicated an interest for or taken up and will not indicate an interest for or take
        up any International Offering Units under the International Offering, and such applicant’s
        application will be rejected if the said undertaking and/or confirmation is breached
        and/or untrue (as the case may be).




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    FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

            In addition, the number of Hong Kong Public Offering Units comprised in Pool A and
            Pool B will not be determined until after applications have been made. Following such
            determination, applications in excess of the number of Hong Kong Public Offering Units
            finally determined to be comprised in Pool B (but not more than the initial maximum
            number) will be deemed to have been made at the number of Hong Kong Public Offering
            Units finally determined to be in Pool B.

            Further information is set out in the section headed “Structure of the Global Offering —
            The Hong Kong Public Offering” in this Offering Circular.

3     Acceptance of applicants’ offer

      (a)   The Hong Kong Public Offering Units will be allocated after the application lists close.
            The Manager expects to announce the Offer Price , the level of indications of interest
            in the International Offering, the level of applications in the Hong Kong Public Offering,
            the basis of allocations of the Hong Kong Public Offering Units and the final number of
            the Hong Kong Public Offering Units comprised in the Hong Kong Public Offering, Pool
            A and Pool B, and the Hong Kong identity card/passport/Hong Kong business
            registration numbers of successful applicants under the Hong Kong Public Offering
            respectively in the South China Morning Post (in English) and the Hong Kong Economic
            Times (in Chinese) on Tuesday, 20 December 2005.

      (b)   The Manager may accept an applicant’s offer to subscribe (if the application is received,
            valid, processed and not rejected) by announcing the basis of allocations and/or making
            available the results of allocations publicly.

      (c)   If the Manager accepts an applicant’s offer to subscribe (in whole or in part), there will
            be a binding contract under which the applicant will be required to subscribe for the
            Hong Kong Public Offering Units in respect of which the applicant’s offer has been
            accepted if the conditions of the Global Offering are satisfied or the Global Offering is
            not otherwise terminated. Further details are contained in the section headed “Structure
            of the Global Offering” in this Offering Circular.

      (d)   Applicants will not be entitled to exercise any remedy of rescission for innocent
            misrepresentation at any time after acceptance of their application. This does not affect
            any other right they may have.

4     Effect of making any application

      (a)   By making any application, the applicant (and if the application is made by joint
            applicants, each of the joint applicants jointly and severally) for himself/herself/itself or
            as agent or nominee and on behalf of each person for whom the applicant acts as agent
            or nominee:

            —    instructs and authorises the Manager, the Trustee and/or the Joint Global
                 Coordinators (or their respective agents or nominees) to execute any documents



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FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

         on the applicant’s behalf and to do on the applicant’s behalf all other things
         necessary to effect the registration of any Hong Kong Public Offering Units
         allocated to the applicant in the applicant’s name(s) or HKSCC Nominees, as the
         case may be, as required by the Trust Deed and otherwise to give effect to the
         arrangements described in this Offering Circular and the relevant Application
         Form;


     —   undertakes to sign all documents and to do all things necessary to enable the
         applicant or HKSCC Nominees, as the case may be, to be registered as the holder
         of the Hong Kong Public Offering Units allocated to the applicant, and as required
         by the Trust Deed;


     —   represents and warrants that he/she/it understands that the Units have not been
         and will not be registered under the US Securities Act and the applicant is outside
         the United States when completing the Application Form and is not a US Person;


     —   confirms that the applicant has received a copy of this Offering Circular and has
         only relied on the information and representations contained in this Offering
         Circular in making the application, and not on any other information or
         representation concerning GZI REIT and agrees that none of the Manager, the
         Trustee or the Joint Global Coordinators or the Underwriters nor any of their
         respective directors, officers, employees, partners, agents or advisers will have
         any liability for any such other information or representations;


     —   agrees that (without prejudice to any other rights which the applicant may have)
         once the application has been accepted, the applicant may not rescind it because
         of an innocent misrepresentation;


     —   (if the application is made for the applicant’s own benefit) warrants that the
         application is the only application which will be made for the applicant’s benefit on
         a WHITE or YELLOW Application Form or by giving electronic application
         instructions to HKSCC via CCASS;


     —   (if the application is by an agent on the applicant’s behalf) warrants that the
         applicant has validly and irrevocably conferred on the agent all necessary power
         and authority to make the application;


     —   (if the applicant is an agent for another person) warrants that reasonable enquiries
         have been made of that other person that the application is the only application
         which will be made for the benefit of that other person on a WHITE or YELLOW
         Application Form or by giving electronic application instructions to HKSCC via
         CCASS, and that the applicant is duly authorised to sign the Application Form or
         to give electronic application instruction as that other person’s agent;



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FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

     —   undertakes and confirms that the applicant (if the application is made for the
         applicant’s benefit) or the person(s) for whose benefit the application is made has
         not applied for or taken up or indicated an interest in or received or been placed
         or allocated (including conditionally and/or provisionally) and will not apply for or
         take up or indicate any interest in any International Offering Units in the
         International Offering, nor otherwise participate in the International Offering;


     —   warrants the truth and accuracy of the information contained in the application;


     —   agrees to disclose to the Manager, the Trustee, the Joint Global Coordinators and
         their respective agents any personal data and information about the applicant
         which they require or the person(s) for whose benefit the applicant has made the
         application;


     —   agrees that the application, any acceptance of it and the resulting contract will be
         governed by and construed in accordance with the laws of Hong Kong;


     —   undertakes and agrees to accept the Hong Kong Public Offering Units applied for,
         or any lesser number allocated to the applicant under the application;


     —   authorises the Manager and the Trustee to place the applicant(s)’ name(s) or
         HKSCC Nominees, as the case may be, on the register of Unitholders of GZI REIT
         as the holder(s) of any Hong Kong Public Offering Units allocated to the applicant,
         and the Manager, the Trustee and/or and their respective agents to send any Unit
         certificate(s) (where applicable) and/or any refund cheque (where applicable) to
         the applicant or (in case of joint applicants) the first-named applicant in the
         Application Form by ordinary post at the applicant’s own risk to the address stated
         on the applicant’s Application Form (except that if an applicant has applied for
         500,000 Hong Kong Public Offering Units or more and has indicated in the
         Application Form that the applicant will collect the Unit certificate(s) (where
         applicable) and refund cheque (where applicable) in person, the applicant may do
         so from the Unit Registrar from 9:00 a.m. to 1:00 p.m. on Tuesday, 20 December
         2005 (or any other dates notified by the Manager in the South China Morning Post
         (in English) and the Hong Kong Economic Times (in Chinese) as the dates of
         despatch and availability of Unit certificates and refund cheques);


     —   understands that these declarations and representations will be relied upon by
         the Manager and the Joint Global Coordinators in deciding whether or not to
         allocate any Hong Kong Public Offering Units in response to the applicant’s
         application; and




                                         323
FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

        —    if the laws of any place outside Hong Kong are applicable to an applicant’s
             application, the applicant agrees and warrants that he/she/it has complied with all
             such laws and none of the Manager, the Trustee or the Joint Global Coordinators
             or the Underwriters nor any of their respective directors, employees, partners,
             agents, officers or advisers will infringe any laws outside Hong Kong as a result of
             the acceptance of the applicant’s offer to acquire, or any actions arising from the
             applicant’s rights and obligations under the terms and conditions contained in this
             Offering Circular.


  (b)   If an applicant applies for the Hong Kong Public Offering Units using a YELLOW
        Application Form, in addition to the confirmations and agreements referred to in (a)
        above, the applicant (and in the case of joint applicants, each of the joint applicants
        jointly and severally) agrees that:


        —    any Hong Kong Public Offering Units allocated to the applicant shall be registered
             in the name of HKSCC Nominees and deposited directly into CCASS for credit to
             the applicant’s CCASS Investor Participant stock account or the stock account of
             the applicant’s designated CCASS Participant, in accordance with the applicant’s
             election on the Application Form;


        —    each of HKSCC and HKSCC Nominees reserves the right at its absolute discretion:
             (i) not to accept any or part of the Hong Kong Public Offering Units allocated to
             the applicant in the name of HKSCC Nominees or not to accept such allocated
             Hong Kong Public Offering Units for deposit into CCASS; (ii) to cause such
             allocated Hong Kong Public Offering Units to be withdrawn from CCASS and
             transferred into the applicant’s name (or, in the case of joint applicants, to the
             name of the first-named applicant) at the applicant’s own risk and costs; and (iii)
             to cause such allocated Hong Kong Public Offering Units to be issued in the
             applicant’s name (or, in the case of joint applicants, to the first-named applicant)
             and in such a case, to post the Unit certificates for such allocated Hong Kong
             Public Offering Units at the applicant’s own risk to the address on the applicant’s
             Application Form by ordinary post or to make available the same for the
             applicant’s collection;


        —    each of HKSCC and HKSCC Nominees may adjust the number of the Hong Kong
             Public Offering Units issued in the name of HKSCC Nominees;


        —    neither HKSCC nor HKSCC Nominees shall have any liability for the information
             and representations not so contained in this Offering Circular and the Application
             Form; and


        —    neither HKSCC nor HKSCC Nominees shall be liable to the applicant in any way.




                                             324
FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

  (c)   In addition, by giving electronic application instructions to HKSCC or instructing a broker
        or custodian who is a CCASS Broker Participant or a CCASS Custodian Participant to
        give such instructions to HKSCC via CCASS, an applicant (and in the case of joint
        applicants, each of the joint applicants jointly and severally) is deemed to do the
        following additional things and neither HKSCC nor HKSCC Nominees will be liable to
        the Manager nor any other person in respect of such things:


        —    instruct and authorise HKSCC to cause HKSCC Nominees (acting as nominee
             for the CCASS Participants) to apply for the Hong Kong Public Offering Units on
             the applicant’s behalf;


        —    instruct and authorise HKSCC to arrange payment of the Maximum Offer Price,
             brokerage, the Hong Kong Stock Exchange trading fee and the SFC transaction
             levy by debiting the applicant’s designated bank account and, in the case of wholly
             or partly unsuccessful applications and/or if the Offer Price is less than the
             Maximum Offer Price, refund the appropriate portion of the application money by
             crediting the applicant’s designated bank account; and


        —    (in addition to the confirmations and agreements set out in paragraph (a) above)
             instruct and authorise HKSCC to cause HKSCC Nominees to do on the
             applicant’s behalf the following and any other thing which it is stated to do on the
             applicant’s behalf in the WHITE Application Form:


             —    agree that the Hong Kong Public Offering Units to be allocated shall be
                  registered in the name of HKSCC Nominees and deposited directly into
                  CCASS for credit to the applicant’s CCASS Investor Participant stock account
                  or the stock account of the CCASS Participant who has inputted electronic
                  application instructions on the applicant’s behalf;


             —    undertake and agree to accept the Hong Kong Public Offering Units in
                  respect of which the applicant has given electronic application instructions or
                  any lesser number;


             —    undertake and confirm that the applicant has not applied for or taken up any
                  International Offering Units under the International Offering nor otherwise
                  participated in the International Offering;


             —    (if the electronic application instructions are given for the applicant’s own
                  benefit) declare that only one set of electronic application instructions has
                  been given for the applicant’s benefit;


             —    (if the applicant is an agent for another person) declare that the applicant has
                  given only one set of electronic application instructions for the benefit of that
                  other person, and that the applicant is duly authorised to give those
                  instructions as that other person’s agent;



                                              325
FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

        —   understand that the above declaration will be relied upon by the Manager
            and the Joint Global Coordinators in deciding whether or not to make any
            allocation of the Hong Kong Public Offering Units in respect of the electronic
            application instructions given by the applicant and that the applicant may be
            prosecuted if the applicant makes a false declaration;

        —   authorise the Manager and the Trustee to place the name of HKSCC
            Nominees on the register of unitholders of GZI REIT as the holder of the Hong
            Kong Public Offering Units allocated in respect of the applicant’s electronic
            application instructions and to send Unit certificates and/or refund monies in
            accordance with arrangements separately agreed between the Manager or
            the Trustee and HKSCC;

        —   confirm that the applicant has read the terms and conditions and application
            procedures set out in this Offering Circular and agrees to be bound by them;

        —   confirm that the applicant has only relied on the information and
            representations in this Offering Circular in giving the applicant’s electronic
            application instructions or instructing the applicant’s broker/custodian to give
            electronic application instructions on the applicant’s behalf;

        —   agree that the Manager, the Trustee, the Joint Global Coordinators, the
            Underwriters and any other parties involved in the Hong Kong Public Offering
            are liable only for the information and representations contained in this
            Offering Circular;

        —   agree without prejudice to any other rights which the applicant may have) that
            once the application of HKSCC Nominees has been accepted, the application
            cannot be rescinded for innocent misrepresentation;

        —   agree to disclose the applicant’s personal data to the Manager, the Trustee,
            the Joint Global Coordinators, the Unit Registrar, the receiving banker(s),
            their respective agents and advisers together with any information about the
            applicant which they require;

        —   agree that the applicant cannot revoke electronic application instructions,
            such agreement to take effect as a collateral contract with the Manager and
            to become binding when the applicant gives the instructions and such
            collateral contract to be in consideration of the Manager agreeing that it will
            not offer any Hong Kong Public Offering Units to any person except by means
            of one of the procedures referred to in this Offering Circular;

        —   agree that once the application of HKSCC Nominees is accepted, neither that
            application nor the applicant’s electronic application instructions can be
            revoked and that acceptance of that application will be evidenced by the
            results of the Hong Kong Public Offering made available by the Manager; and



                                       326
    FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

                  —    agree to the arrangements, undertakings and warranties specified in the
                       participant agreement between the applicant and HKSCC, read with the
                       General Rules of CCASS and the CCASS Operational Procedures, in respect
                       of the giving of electronic application instructions relating to the Hong Kong
                       Public Offering Units.

      (d)   The Manager, the Trustee, the Joint Global Coordinators, the Underwriters, any other
            parties involved in the Hong Kong Public Offering and their respective directors, officers,
            employees, partners, agents and advisers are entitled to rely on any warranty,
            representation or declaration made by the applicants in their applications.

      (e)   All the warranties, representations, declarations and obligations expressed to be made
            given or assumed by or imposed on the joint applicants shall be deemed to have been
            made, given or assumed by or imposed on the applicants jointly and severally.

5     Circumstances in which applicants may not be allocated Hong Kong Public Offering
      Units

     Details of the circumstances in which applicants may not be allocated any Hong Kong Public
Offering Units under the Hong Kong Public Offering are set out in the notes attached to the
Application Forms, and should be read carefully. The Joint Global Coordinators and their agents
or nominees have full discretion to reject or accept any application, or to accept only part of any
application, without having to give any reasons for any rejection or acceptance. Applicants should
note in particular the following situations in which Hong Kong Public Offering Units will not be
allocated to them or their applications are liable to be rejected or satisfied only in part (as
applicable):

      (a)   If the conditions of the Hong Kong Public Offering set out in the section headed
            “Structure of the Global Offering — Conditions of the Hong Kong Public Offering” in this
            Offering Circular remain unfulfilled by Wednesday, 11 January 2006.

      (b)   If the Joint Global Coordinators or their agents or nominees exercise their discretion to
            reject or to accept only part of an application.

      (c)   If:

            —     the application is a multiple or a suspected multiple application; or


            —     the application is made with more than one other joint applicant; or

            —     the Application Form is not completed correctly; or

            —     the payment is not made correctly or payment by cheque or banker’s cashier order
                  and the cheque or banker’s cashier order is dishonoured on its first presentation;
                  or



                                                  327
    FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

            —    the applicant or the person for whose benefit the applicant is applying has applied
                 for and/or received or will receive Units under the International Offering; or


            —    either of the Underwriting Agreements does not become unconditional or it is
                 terminated in accordance with the terms thereof; or


            —    the applicant applies for more than 30,000,000 Units, representing 50% of the
                 Hong Kong Public Offering Units initially made available for subscription under the
                 Hong Kong Public Offering; or


            —    the application for Units is not in one of the numbers or multiples set out in the table
                 in the Application Form.


      (d)   If an applicant is giving electronic application instructions to HKSCC to apply for Hong
            Kong Public Offering Units on his/her/its behalf, the applicant will also not be allocated
            any Hong Kong Public Offering Units if the relevant HKSCC Nominees’ application is not
            accepted.


6     If an application for the Hong Kong Public Offering Units is successful (in whole or
      in part)


      (a)   If applicants are applying using a WHITE Application Form and the applicants elect to
            receive any Unit certificate(s) in their names:


            —    For those applicants who apply for less than 500,000 Units, their Unit certificates
                 and/or refund cheques are expected to be sent on or before Tuesday, 20 December
                 2005 to the address as stated in their Application Forms by ordinary post and at
                 their own risk. Applicants should note that there is no guarantee when
                 he/she/it will receive his/her/its Unit certificates by post. Therefore if such
                 applicant sells his/her/its Units in the first few days after the Units commence
                 trading on the Hong Kong Stock Exchange, he/she/it may not receive
                 his/her/its Unit certificates in time for settlement.


            —    Applicants who apply on WHITE Application Forms for 500,000 Units or more
                 under the Hong Kong Public Offering and have indicated in their Application Forms
                 that they wish to collect Unit certificates and (where applicable) refund cheques in
                 person may do so from the Unit Registrar from 9:00 a.m. to 1:00 p.m. on Tuesday,
                 20 December 2005 (or any other dates notified by the Manager in the South China
                 Morning Post (in English) and the Hong Kong Economic Times (in Chinese) as the
                 dates of despatch and availability of Unit certificates and refund cheques).




                                                  328
FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

        —    Applicants being individuals who opt for personal collection cannot authorize any
             other person to make collection on their behalf. Applicants being corporations who
             opt for personal collection must attend by personal authorised representatives
             each bearing a letter of summarization from the corporation stamped with the
             corporation’s chop. Both individuals and authorised representatives (if applicable)
             must produce, at the time of collection, evidence of identity acceptable to the Unit
             Registrar.


        —    Uncollected Unit certificates and refund cheques will be despatched by ordinary
             post to the addresses specified in the relevant Application Forms at the applicants’
             own risk.


  (b)   If: (i) applicants are applying on a YELLOW Application Form; or (ii) applicants are
        giving electronic application instructions to HKSCC, and in each case the applicants
        elect to have allocated Hong Kong Public Offering Units deposited directly into CCASS:


        If an application is wholly or partly successful, the Unit certificate(s) will be issued in the
        name of HKSCC Nominees and deposited into CCASS for credit to the applicant’s
        CCASS Investor Participant stock account or the stock account of the applicant’s
        designated CCASS Participant as instructed by the applicant (on the Application Form
        or electronically, as the case may be), at the close of business on Tuesday, 20
        December 2005 or, under contingent situation, on any other date HKSCC or HKSCC
        Nominees chooses.


        —    If an applicant is applying through a designated CCASS Participant (other than a
             CCASS Investor Participant) on a YELLOW Application Form:


             For Hong Kong Public Offering Units credited to the stock account of the
             applicant’s designated CCASS Participant (other than a CCASS Investor
             Participant), the applicant can check the number of Hong Kong Public Offering
             Units allocated to him/her/it with that CCASS Participant.


        —    If an applicant is applying as a CCASS Investor Participant on a YELLOW
             Application Form:


             The Manager is expected to make available the results of the Hong Kong Public
             Offering, including the results of CCASS Investor Participants’ applications, in the
             manner described in the sub-section headed “How to apply for Hong Kong Public
             Offering Units — Publication of results” above, on Tuesday, 20 December 2005.
             Applicants should check the results made available by the Manager and report any
             discrepancies to HKSCC before 5:00 p.m. o