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




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

                                                                                      Managed by


                                                  Eagle Asset Management (CP) Limited
                                                                         GLOBAL OFFERING
   Number of Units under the Global Offering:                                                    1,234,219,752 (subject to adjustment and the Over-allotment
                                                                                                 Option)
   Number of Units under the Hong Kong Public Offering:                                          123,422,000 (subject to adjustment and reallocation)
   Number of Units under the International Offering:                                             1,110,797,752 (subject to adjustment, reallocation and the
                                                                                                 Over-allotment Option)
   Maximum Offer Price:                                                                          HK$5.75 per Unit payable in full on application in Hong Kong
                                                                                                 dollars, plus brokerage of 1%, Hong Kong Stock Exchange trading
                                                                                                 fee of 0.005% and SFC transaction levy of 0.005%, subject to
                                                                                                 refund
   Stock Code:                                                                                   2778
                                                      Sole Global Coordinator and Sole Listing Agent



                                                                   Merrill Lynch Far East Limited
                                                      Joint Bookrunners and Joint Lead Underwriters


     Merrill Lynch Far East Limited                            Citigroup Global Markets Asia Limited                                                                 JPMorgan
                                                                             Joint Financial Advisors


Citigroup Global Markets Asia Limited                                                                                                            Merrill Lynch Far East Limited

The Securities and Futures Commission of Hong Kong, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited 10.10(u)
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 Lead Underwriters, Great Eagle and the Manager on the Price Determination
Date. The Price Determination Date is expected to be on May 16, 2006. The Offer Price will not be more than HK$5.75 and is currently expected to be not B14(a)
less than HK$5.00. Applicants for Hong Kong Public Offering Units and Reserved Units are required to pay, on application, the Maximum Offer Price of
HK$5.75 for each Hong Kong Public Offering Unit or Reserved Unit together with brokerage of 1%, Hong Kong Stock Exchange trading fee of 0.005% and
SFC transaction levy of 0.005%, subject to refund if the Offer Price is lower than the Maximum Offer Price.
The Joint Lead Underwriters (with the consent of Great Eagle and the Manager) may reduce the indicative Offer Price range below that stated in this
Offering Circular (which is HK$5.00 to HK$5.75 per Unit) at any time prior to the morning of the last day for lodging applications under the Hong Kong
Public Offering and the Preferential Offering. In such a case, notices of the reduction in the indicative Offer Price range will be published in The Standard (in
English) and 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 and the Preferential Offering. If applications for Hong Kong Public Offering Units and/or Reserved Units have been submitted prior to
the day which is the last day for lodging applications under the Hong Kong Public Offering and the Preferential Offering, as the case may be, 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 and Reserved Units’’ in this Offering Circular.
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement to subscribe for, and to procure applications for the
subscription of, the Hong Kong Public Offering Units, are subject to termination by the Joint Lead 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 ‘‘Underwriting’’ in this
Offering Circular. It is important that you refer to that section for further details.
                                                                                                                                                   May 11, 2006 B25
(This Page Intentionally Left Blank)
                   IMPACT OF INTEREST RATE SWAPS AND DISTRIBUTION WAIVER


           This summary is derived from, and should be read in conjunction with, the full text
      of this Offering Circular. This section is only a general summary of the more detailed
      information contained elsewhere in this Offering Circular.
             Investors should note the following features of Champion REIT:
      (      A significant part of the distribution for FY06 (approximately 89%) and part of the
             distribution for the subsequent four years are effectively funded by the proceeds of
             the Global Offering as a result of the upfront payments for the interest rate swaps;
      (      The five-year interest rate swaps have a ‘‘step-up’’ structure. This means that the
             cash finance costs of Champion REIT will increase over the next five years of the life
             of the swaps. In addition, the enhancement effects of the Distribution Waiver will
             decline over the next three years; and
      (      As such, should there be a significant decrease in rental income or should there be a
             major economic or property downturn, the increasing cash finance costs may have a
             material adverse effect on the Annual Distributable Income of Champion REIT such
             that distributions to Unitholders in later years of the interest rate swaps could be
             substantially less than those of the earlier years. In a worst case scenario, such a
             downturn could have such a significant impact on Champion REIT’s net property
             income that not only its ability to pay distributions to Unitholders but also its ability
             to service such cash finance costs will be affected. See the section headed ‘‘Risk
             Factors’’ in this Offering Circular.

      The following tables set forth certain distribution data and forecasted distribution and profit yields for
the Forecast Period. Please see the sections headed ‘‘Certain Factors Affecting Future Results of Operations
and Financial Condition’’ and ‘‘Profit Forecast’’ in this Offering Circular for more details.
                                                                                         Before taking into       After taking into
                                                                                         account the effect       account the effect
                                                                                         of the Distribution     of the Distribution
                                                                                               Waiver                  Waiver
                                                                                                            (HK$)
Forecasted DPU for the FY06 Distribution Period***************                                 0.0762                    0.1694
  Portion of forecasted DPU from net profit after taxation(1) ********                         0.0084                    0.0188
  Portion of forecasted DPU from the effective return of equity *****                          0.0678                    0.1507
                                                                                        Based on the                Based on the
                                                                                    Minimum Offer Price          Maximum Offer Price
                                                                                        of HK$5.00                   of HK$5.75

Forecasted annualized profit yield after taxation(2) **************                           0.48%                       0.42%
Forecasted annualized distribution yield after taxation(2) *********                          5.57%                       4.84%

Notes:
(1)       Includes deferred taxation of HK$5.1 million which has been added back to net profit after taxation.
(2)       After taking into account the effect of the Distribution Waiver and excluding brokerage of 1%, Hong Kong Stock Exchange
          trading fee of 0.005% and SFC transaction levy of 0.005%.

          Investors should note the following features of Champion REIT:
(         Upfront swap payments will effectively be distributed to Unitholders over a five-year period by way of a
          partial return of equity. The upfront swap payments and the debt front-end fee, totaling HK$1,453.0
          million, are funded by part of the proceeds of the Global Offering, and will effectively be distributed to the
          Unitholders by way of a partial return of equity over the five-year term of the interest rate swaps as follows:
                                                     Listing Date to
                                                     December 31,                 For the year ending December 31,
                                                           2006           2007       2008       2009      2010     2011(1)
Amount of equity effectively returned to
 Unitholders (HK$ millions) *********                     186.0           312.0       301.9        284.1         265.2       103.8
                  IMPACT OF INTEREST RATE SWAPS AND DISTRIBUTION WAIVER



Note:
(1)     Amount of equity effectively returned to Unitholders for the period from January 1, 2011 to the maturity date of the Facility,
        which is the 5th anniversary of the Listing Date.

        As a result, the Annual Distributable Income for the five-year term of the interest rate swaps will be
        enhanced by such return of equity. See the section headed ‘‘Certain Factors Affecting Future Results of
        Operations and Financial Condition — Finance Costs and Interest Rate Swaps’’ in this Offering
        Circular.
(       ‘‘Step-up’’ structure of interest rate swaps. The five-year interest rate swaps have a ‘‘step-up’’
        structure, whereby the cash finance costs will increase over the life of the swaps as follows:
                                                    Listing Date to                        For the year ending
                                                    December 31,                              December 31,
                                                          2006            2007          2008      2009       2010             2011(1)
Cash finance costs (HK$ millions) ***                       10.6            28.1         56.1         91.1        126.1          55.5

Note:
(1)     Cash finance costs for the period from January 1, 2011 to the maturity date of the Facility, which is the 5th anniversary of the
        Listing Date.

        If Rental Income decreases significantly or there is a major economic or property downturn in Hong
        Kong, the Annual Distributable Income for later years could be significantly less than that of the earlier
        years of the interest rate swaps. See the section headed ‘‘Risk Factors — Risks Relating to Champion
        REIT’s Organization and Operations’’ in this Offering Circular.
(       Distribution Waiver enhances DPU for FY06, FY07 and FY08 Distribution Periods. Each of GE
        Holder (together with Great Eagle as guarantor), KP Holder (together with Kerry Properties as
        guarantor) and Wing Tai (together with Great Eagle as guarantor) has agreed to waive its entitlement to
        receive all or part of the distribution payable for the FY06 Distribution Period, FY07 Distribution
        Periods and FY08 Distribution Periods as follows:
                                                                                       Distribution Period(s)
                                                               FY06         FY07        FY08         FY09          FY10         FY11

        Percentage of the Units held as of the
        Listing Date by GE Holder, KP Holder
        and Wing Tai subject to the Distribution
        Waiver*****************************                    100%         55%          20%            nil          nil          nil
        The percentage of the Units subject to the Distribution Waiver will decline over the FY06
        Distribution Period, FY07 Distribution Periods and FY08 Distribution Periods. As such, the DPU
        during the applicable periods of the Distribution Waiver will decrease in the absence of any
        increase in the Annual Distributable Income, and the Annual Distributable Income will decrease
        during the five-year term of the interest rate swaps in the absence of increased net property
        income. There is also no assurance that the DPU for future periods will not decrease. See the section
        headed ‘‘Statement of Distribution’’ in this Offering Circular.
(       Guaranteed FY06 DPU. GE Holder (together with Great Eagle as guarantor) has guaranteed
        that the DPU for the FY06 Distribution Period which each Public Unitholder will receive will not be
        less than HK$0.1694 (after taking into account the effect of the Distribution Waiver). See the section
        headed ‘‘Material Agreements and Other Documents Relating to Champion REIT — DPU Guarantee
        Deed’’ in this Offering Circular.
KEY INVESTMENT INFORMATION AND HIGHLIGHTS
(This Page Intentionally Left Blank)
                                                  EXPECTED TIMETABLE(1)

Dispatch of BLUE Application Forms on or around *****                                                 Wednesday, May 10, 2006
Hong Kong Public Offering and Preferential Offering
  commence and WHITE and YELLOW Application
  Forms available from ***************************                                      9:00 a.m. on Thursday, May 11, 2006
Application lists open(2) *****************************                                 11:45 a.m. on Tuesday, May 16, 2006
Latest time to lodge WHITE, YELLOW and BLUE
  Application Forms *******************************                                    12:00 noon on Tuesday, May 16, 2006
Latest time to give electronic application instructions to
  HKSCC(3) **************************************                                      12:00 noon on Tuesday, May 16, 2006
Application lists close ******************************                                 12:00 noon on Tuesday, May 16, 2006
Expected Price Determination Date(4) ******************                                              Tuesday, May 16, 2006
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 and the
  Preferential 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, to be
  published in The Standard (in English) and Hong Kong
  Economic Times (in Chinese) on or before ***********                                                    Tuesday, May 23, 2006
Dispatch of Unit certificates in respect of wholly or partially
  successful applications on(5) ***********************                                                   Tuesday, May 23, 2006
Dispatch of refund cheques in respect of wholly or partially
  unsuccessful applications on or before(5)(6) ************                                               Tuesday, May 23, 2006
Dealings in Units on the Hong Kong Stock Exchange to
  commence on ***********************************                                                     Wednesday, May 24, 2006

Notes:
(1)      All times refer to Hong Kong local time, except where otherwise stated. Details of the structure of the Global Offering,
         including the conditions of the Hong Kong Public Offering and the Preferential Offering, are set out in the sections headed
         ‘‘Structure of the Global Offering’’ and ‘‘Further Terms and Conditions of the Hong Kong Public Offering and the Preferential
         Offering’’ in this Offering Circular.
(2)      If there is a ‘‘black’’ rainstorm warning signal or a tropical cyclone warning signal number 8 or above in force in Hong Kong at
         any time between 8:00 a.m. and 12:00 noon on Tuesday, May 16, 2006, the application lists will not open on that day. See the
         sections headed ‘‘How to Apply for Hong Kong Public Offering Units and Reserved Units — How to apply for Hong Kong
         Public Offering Units — When to apply for Hong Kong Public Offering Units — Effect of bad weather on the opening of the
         application lists’’ and ‘‘How to Apply for Hong Kong Public Offering Units and Reserved Units — How to apply for Reserved
         Units — Effect of bad weather on the opening of the application lists’’ in this Offering Circular for further information.
(3)      Applicants who apply for Hong Kong Public Offering Units by giving electronic application instructions to HKSCC should
         refer to the section headed ‘‘How to Apply for Hong Kong Public Offering Units and Reserved Units — How to apply for
         Hong Kong Public Offering Units — How to make applications — Applying by giving electronic application instructions to
         HKSCC via CCASS’’ in this Offering Circular.
(4)      The Price Determination Date for the purposes of the Global Offering is expected to be on Tuesday, May 16, 2006.
         Notwithstanding that the Offer Price may be fixed at below the Maximum Offer Price, applicants who apply for Hong Kong
         Public Offering Units and/or Reserved Units must pay on application the Maximum Offer Price of HK$5.75 per Unit together
         with brokerage of 1%, 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 and the Preferential Offering — Refund of money — Additional information’’ in this Offering
         Circular.




                                                                     i
                                                 EXPECTED TIMETABLE(1)

(5)     Applicants who apply for 1,000,000 or more Hong Kong Public Offering Units or Reserved Units by using Application Forms
        and who have indicated in their Application Forms their wish to collect refund cheques or, in the case of applicants using
        WHITE and BLUE Application Forms only, to collect Unit certificates in person may do so from the Unit Registrar,
        Computershare Hong Kong Investor Services Limited, from 9:00 a.m. to 1:00 p.m. on Tuesday, May 23, 2006 (or any other
        dates notified by the Manager in The Standard (in English) and Hong Kong Economic Times (in Chinese) as the date of
        dispatch and availability of Unit certificates and refund cheques). 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 authorized representatives each bearing a letter of authorization from his corporation
        stamped with the corporation’s chop. Both individuals and authorized 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
        dispatched 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 sections headed ‘‘How to Apply for Hong Kong Public Offering Units and Reserved Units’’
        and ‘‘Further Terms and Conditions of the Hong Kong Public Offering and the Preferential Offering’’ in this Offering Circular.
(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.

     Unit certificates are expected to be issued by Tuesday, May 23, 2006, but will only become valid
at 8:00 a.m. on Wednesday, May 24, 2006, provided that (a) the Global Offering has become
unconditional in all respects; and (b) the right of termination as described in the section headed
‘‘Underwriting — Hong Kong Underwriting Agreement — Grounds for Termination by the Hong
Kong Underwriters’’ in this Offering Circular has not been exercised.

           This Offering Circular is being distributed in electronic format on CD ROM, or in printed form
      upon request, to Qualifying Great Eagle Shareholders. 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. Neither the CD ROM nor any of its contents is an offer of securities for sale in the
      United States and/or any other jurisdiction outside Hong Kong. Securities may not be offered or sold
      in the United States absent registration or an exemption from registration. Any offering of securities
      will be made by means of a printed Offering Circular that may be obtained from the Unit Registrar,
      Computershare Hong Kong Investor Services Limited, which contains detailed information about
      Champion REIT, as well as financial statements. Neither the CD ROM, any of its contents nor any
      copy of it may be taken or transmitted outside of Hong Kong or distributed, directly or indirectly
      outside of Hong Kong. By accepting the CD ROM, Qualifying Great Eagle Shareholders are deemed
      to agree to be bound by the foregoing instructions. Qualifying Great Eagle Shareholders may obtain a
      printed copy of this Offering Circular from the Unit Registrar, Computershare Hong Kong Investor
      Services Limited, during business hours at Shops 1712-1716, 17/F Hopewell Centre, 183 Queen’s
      Road East, Wanchai, Hong Kong from 9:00 am on Thursday, May 11, 2006 to 12:00 noon on Tuesday,
      May 16, 2006.




                                                                   ii
                                         CONTENTS

                                                                                             Page
Key Investment Information and Highlights
  Expected Timetable **********************************************************                 i
  Contents *******************************************************************                iii
  Offering Circular Summary ****************************************************               1
  The Global Offering**********************************************************               25
  Information About this Offering Circular and the Global Offering ********************       29
  Parties Involved in the Global Offering ******************************************          33
  Risk Factors ****************************************************************               36
  Use of Proceeds *************************************************************               55
  Ownership of the Units *******************************************************              56
  Distribution Policy ***********************************************************             57
Grade A Office Market in Hong Kong and in the Central District*******************             59
Strategy *********************************************************************                71
The Property and Business*****************************************************                75
Financial Information and Forecasts
  Selected Financial Information *************************************************            87
  Management’s Discussion and Analysis of Financial Condition and Results of Operations       89
  Certain Factors Affecting Future Results of Operations and Financial Condition *********   102
  Profit Forecast **************************************************************             111
  Statement of Distribution******************************************************            124
  Unaudited Pro Forma Balance Sheet ********************************************             126
Structure, Management and Agreements
  Reorganization, Structure and Organization of Champion REIT **********************         129
  The Manager ***************************************************************                134
  The Property Manager ********************************************************              147
  The DMC Manager **********************************************************                 150
  Overview of Great Eagle Holdings Limited, Kerry Properties Limited and Wing Tai
     Corporation Limited********************************************************             153
  Corporate Governance ********************************************************              156
  The Trust Deed *************************************************************               162
  Material Agreements and Other Documents Relating to Champion REIT***************           173
  Connected Party Transactions **************************************************            192
  Modifications, Waivers and Licensing Conditions **********************************         205




                                               iii
                                        CONTENTS

                                                                                       Page
Other Information
  Taxation *******************************************************************         207
  Underwriting****************************************************************         209
  Structure of the Global Offering ************************************************    215
  Experts ********************************************************************         224
  How to Apply for Hong Kong Public Offering Units and Reserved Units **************   225
  Further Terms and Conditions of the Hong Kong Public Offering and the Preferential
    Offering *****************************************************************         239
Definitions
  Technical Terms *************************************************************        254
  General Terms **************************************************************         257


Appendices
Appendix I      Accountants’ Report ********************************************        I-1
Appendix II     Unaudited Pro Forma Balance Sheets of Champion REIT *************      II-1
Appendix III    Profit Forecast *************************************************     III-1
Appendix IV     Letter from the Independent Property Valuer in Relation to Rental
                  Income*****************************************************         IV-1
Appendix   V    Independent Property Valuer’s Valuation Report *********************   V-1
Appendix   VI   Letter from Colliers in Relation to the Grade A Office Market in Hong
                  Kong and in the Central District ********************************   VI-1
Appendix   VII Letter from the Building Surveyor in Relation to its Building Survey
                  Report ***************************************************** VII-1
Appendix   VIII General Information ******************************************** VIII-1




                                             iv
                                 OFFERING CIRCULAR SUMMARY


       The following summary is derived from, and should be read in conjunction with, the full text of
  this Offering Circular. This section is only a general summary of the more detailed information
  contained elsewhere in this Offering Circular. You should read carefully the entire Offering Circular to
  understand Champion REIT’s business, statement of distributions, the Trust Deed, the rights attached
  to the Units, and tax and other considerations that are important to your decision to invest in the
  Units. As an investment in the Units involves risks, you should pay particular attention to the section
  headed ‘‘Risk Factors’’ in this Offering Circular.
        In making your investment decision, you should rely only on the information contained in this
  Offering Circular. Champion REIT has not authorized anyone to provide you with information that is
  different from that contained in 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 considers 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 Champion REIT, the Manager, the Trustee, the
  Underwriters, the Listing Agent, Great Eagle, GE Holder, Kerry Properties, KP Holder, Wing Tai, the
  Vendor Companies or any other person or that these results will be achieved or are likely to be
  achieved. Capitalized terms not defined in this summary are defined in the section headed
  ‘‘Definitions’’ in this Offering Circular.


A REIT AS AN INVESTMENT VEHICLE
      A REIT 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 stable returns to its Unitholders. Purchasing a
unit in a REIT allows investors to share the benefits and risks of owning the real estate assets held by the
REIT. An investment in the units of a REIT in Hong Kong is governed primarily by the REIT Code and
offers investors the following benefits:
     (    certainty as to business focus, as a REIT 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% of the REIT’s audited net       7.12
          income after tax for each financial year subject to certain adjustments (and, in the case of
          Champion REIT, a distribution which is required under the Trust Deed to be at least 90%, and a
          policy of the Manager to distribute 100%, of Annual Distributable Income for each financial
          year). The Annual Distributable Income is the consolidated audited net profit after tax of
          Champion REIT and each Special Purpose Vehicle owned by the Trustee on trust for and on
          behalf of Champion REIT, subject to certain adjustments as described in the section headed
          ‘‘Distribution Policy’’ in this Offering Circular;
     (    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.

OVERVIEW OF CHAMPION REIT
     Champion REIT is a real estate investment trust formed primarily to own and invest in an income-
producing portfolio of office and retail properties in Hong Kong. Its key objectives are to provide

                                                     1
                                 OFFERING CIRCULAR SUMMARY

Unitholders with stable and sustainable distributions and to achieve long-term capital growth. The Manager
aims to produce attractive total returns to Unitholders by, among other things, proactive management of the
Property and selective acquisition of properties that meet its investment criteria as described in the section
headed ‘‘Strategy — Acquisition Strategy’’ in this Offering Circular.
      Champion REIT offers investors direct exposure to a prime Grade A office property in the premier           B2(i)
central business district (‘‘CBD’’) in the core Central District in Hong Kong, which is the banking and
financial center in Hong Kong and one of the most important commercial hubs in Asia. Champion REIT
will initially invest in and own the Property, which comprises 91.5% of the Gross Rentable Area of Citibank
Plaza and substantially all of the parking spaces at Citibank Plaza. Citibank Plaza is a modern glass and
steel office complex that comprises Citibank Tower, a 47-storey building, and ICBC Tower, a 37-storey
building, and includes a retail podium and a carpark. It is located at 3 Garden Road, Central, near the
intersection of Garden Road and Queen’s Road Central, which is part of the hub of banking and financial
activities in the Central District.
      The Property has an aggregate Gross Rentable Area of 1,160,227 sq. ft., comprising 1,117,634 sq. ft.
of office space, 42,593 sq. ft. of retail space, 55 private carparking spaces and a public carpark with 500
carparking spaces and 50 motorcycle parking spaces. The Property (excluding the carpark) has a Total Floor
Area of 1,492,526 sq. ft., comprising 1,434,805 sq. ft. of office space and 57,721 sq. ft. of retail space.
      The Property has a high quality tenant base with 81 office and retail tenants under 106 tenancies as of
February 28, 2006, with a majority of Rental Income attributable to tenants in the banking and finance
sectors. The 10 largest tenants (in terms of Rental Income for the month ended February 28, 2006)
contributed approximately 69.2% of Rental Income for the month ended February 28, 2006. As of
February 28, 2006, the office space in the Property had an occupancy rate of 86.1%, while the retail space in
the Property enjoyed a 100% occupancy rate.
      Upon completion of the Global Offering, Great Eagle (through GE Holder, its wholly-owned                   B6/
subsidiary), Kerry Properties (through KP Holder, its wholly-owned subsidiary) and Wing Tai will own             7.8
49.2%, 4.2% and 1.6%, respectively, of the then outstanding Units (before any exercise of the Over-
allotment Option). Great Eagle, GE Holder, Kerry Properties, KP Holder and Wing Tai have entered into
certain lock-up arrangements with the Underwriters with respect to their Units for a period of 180 days from
and including the Listing Date, subject to certain exceptions.
      Each of GE Holder (together with Great Eagle as guarantor), KP Holder (together with Kerry
Properties as guarantor) and Wing Tai (together with Great Eagle as guarantor) has entered into a deed with
the Trustee and the Manager pursuant to which it has agreed to waive its entitlement to receive any
distributions payable (a) for the FY06 Distribution Period with respect to all of the Units it holds as of the
Listing Date; (b) for the FY07 Distribution Periods with respect to 55% of the Units it holds as of the
Listing Date; and (c) for the FY08 Distribution Periods with respect to 20% of the Units it holds as of the
Listing Date. Each such portion of the distributions waived will be available for distribution to holders of
Units with respect to which distributions have not been waived, thereby enhancing the DPU for such
periods. If any of such parties holds less than the number of Units in respect of which the Distribution
Waiver applies as of the relevant Record Dates, it will make a cash contribution to Champion REIT to make
up the shortfall so as to place the other Unitholders in a position that is no worse than if it had not so
reduced its holdings. See the section headed ‘‘Material Agreements and Other Documents Relating to
Champion REIT — Distribution Entitlement Waiver Deed’’ in this Offering Circular.
      GE Holder, a wholly-owned subsidiary of Great Eagle, together with Great Eagle as guarantor, has
entered into a deed of guarantee with the Trustee and the Manager pursuant to which GE Holder has
guaranteed that the DPU of Champion REIT payable to the Public Unitholders for the FY06 Distribution
Period will not be less than HK$0.1694 (after taking into account the effect of the Distribution Waiver). See
the section headed ‘‘Material Agreements and Other Documents Relating to Champion REIT — DPU
Guarantee Deed’’ in this Offering Circular.

                                                      2
                                          OFFERING CIRCULAR SUMMARY

OVERVIEW OF THE GRADE A OFFICE MARKET IN HONG KONG AND IN THE CENTRAL
DISTRICT

      The following has been extracted from the letter from Colliers in relation to the Grade A Office Market
in Hong Kong and in the Central District, the full text and sources of which are set out in Appendix VI to
this Offering Circular. You should read the following summary together with the full text of the report set out
in Appendix VI to this Offering Circular.

Executive Summary

    Stock

      As of December 31, 2004, the Central District was the district with the largest source of Grade A
office stock in Hong Kong, accounting for 17.0 million sq. ft. or 27% of the total.

    Supply

      The historical average new supply during the period between 1986 and 2004 in the Central District
was about 0.5 million sq. ft. per annum. In 2005, AIG Tower was the major source of supply, providing
0.32 million sq. ft. of floor area. In 2006, the only new supply is expected to be York House, containing
about 0.1 million sq. ft. of floor area. Going beyond 2006, no new publicly announced Grade A office
project has been planned for completion in the Central District during 2007 and 2008, and therefore no new
supply is expected by Colliers in 2007 and 2008.

      Although the site of Central Market at Jubilee Street (IL 8941) is likely to be taken off the
‘‘Application List’’* and put up for public auction in 2006, Colliers does not expect the physical completion
of the development before 2009. As such, Colliers predicts that, during the supply cycle from 2005 to 2010,
the prospective new supply in the Central District will fall below the historical average of 0.5 million sq. ft.
per annum seen between 1986 and 2004.

Note:

*    The Application List is a market-led system implemented by the HKSAR Government since April 1999 in order to supplement
     the regular land auction and tender program. Any developer interested in any of the sites on the Application List may submit an
     application to the Lands Department by offering a price for the site. If the offer price is considered reasonable and is accepted by
     the Government, the site would be put up for sale by auction or tender.




                                                                   3
                                                                                        OFFERING CIRCULAR SUMMARY

                                                                                         Central Grade A Office New Supply
                                                                                                                                                                                             Projected Central Grade A
                                                                                    1986-2004 Central Grade A Historical Average: 0.5                                                             Average: 0.16


                                        1.6




                                                                                                                                                                     1.47
       Supply per Annum (mm sq. ft.)




                                        1.4


                                        1.2




                                                                                        1.02
                                                            0.95




                                                                                                                                  0.92
                                        1.0




                                                                                                                                         0.88
                                                                   0.78
                                                     0.76




                                        0.8




                                                                                                                                                                                                                           0.57 (3)
                                                                          0.54

                                                                                 0.50



                                        0.6




                                                                                                                           0.50




                                                                                                                                                              0.42




                                                                                                                                                                                   0.32(1)
                                        0.4




                                                                                                                    0.27




                                                                                                                                                       0.18




                                                                                                                                                                                               0.10(2)
                                        0.2
                                              0.08




                                                                                               0.09




                                        0.0
                                              1986

                                                     1987

                                                            1988

                                                                   1989

                                                                          1990

                                                                                 1991

                                                                                        1992

                                                                                               1993

                                                                                                      1994

                                                                                                             1995

                                                                                                                    1996

                                                                                                                           1997

                                                                                                                                  1998

                                                                                                                                         1999

                                                                                                                                                2000

                                                                                                                                                       2001

                                                                                                                                                              2002

                                                                                                                                                                     2003

                                                                                                                                                                            2004

                                                                                                                                                                                   2005

                                                                                                                                                                                               2006F*

                                                                                                                                                                                                         2007F*

                                                                                                                                                                                                                  2008F#

                                                                                                                                                                                                                           2009F#

                                                                                                                                                                                                                                      2010F#
Source:                                   Rating and Valuation Department, HKSAR Government (1986 - 2007); Colliers (2008 - 2010)


Notes:
(1)                                    AIG Tower
(2)                                    York House
(3)                                    Assumes the successful sale and completion of the redevelopment of the Central Market on Jubilee Street.
F*:                                    Forecast by Rating and Valuation Department, HKSAR Government.
F#:                                    Forecast by Colliers.

      Vacancy
      Largely attributed to the buoyant finance and insurance industries, the average vacancy level in the
Central District contracted from 15.2% in 2003 to 10.8% in 2004, compared to the average historical
vacancy rate of 7.1% from 1986 to 2004. An internal survey undertaken by Colliers suggests the average
vacancy in the Central District was around 5% in December 2005. Given the supply gap in 2006 and 2007
and the expected buoyant demand for office space, Colliers predicts that the average vacancy rate in the
Central District will edge down in view of scarce supply in the Central District but that the degree of
downslide will depend on the number of companies relocating out of the Central District to other areas due
to sharp increases in rental rates in the Central District.




                                                                                                                            4
                                        OFFERING CIRCULAR SUMMARY

Historical Average Vacancy Rate
Period                                                             Hong Kong Grade A Office          Central Grade A Office

1986-2004 **********************************                                    8.8%                          7.1%
2001 ***************************************                                    8.7%                          8.5%
2002 ***************************************                                   10.8%                         10.2%
2003 ***************************************                                   13.7%                         15.2%
2004 ***************************************                                   13.1%                         10.8%
2005 ***************************************                                    8.1%                            5%(1)
Source:     Rating and Valuation Department, HKSAR Government (1986 - 2005)


Note:

(1)     Average vacancy rate in December 2005, based on an internal survey undertaken by Colliers.


      Rental growth

      Although the Hong Kong Grade A office sector is expected to see more new supply coming on line in
2007 and 2008, the anticipated effect on the Central District is expected by Colliers to be limited because
new developments are expected by Colliers to be concentrated in non-core areas such as West Kowloon.
Colliers believes that the Central District Grade A market will continue to experience a shortage of new
developments during the period from 2006 to 2010.

     During the current market upswing, the accumulated rental growth in Central Grade A office sector
was 99% between 4Q 2003 and 4Q 2005, based on data from the Rating and Valuation Department of the
HKSAR Government. However, the current rental level is only 60% of the peak achieved in 1994.

      The historical average YoY Central Grade A office rental growth between 1986 and 2004 was 5.8%,
based on the average of the YoY rental growth for each of the 76 quarters during such period from data from
the Rating and Valuation Department of the HKSAR Government, and Central Grade A office rental
increased by 50% YoY between 4Q 2004 and 4Q 2005, based on data from the Rating and Valuation
Department of the HKSAR Government. Since the Central District is the hub for the bulk of the companies
engaged in the FIRE sector, Colliers expects that prospective rental upside will be underpinned by the
buoyant finance industries. Colliers believes that even though certain tenants may be driven out of Central
by the increasing rental rates, the demand for Central Grade A office space will still exceed supply,
particularly given that no significant new supply is expected to be available in Central in the foreseeable
future. Central Grade A office rents are therefore predicted by Colliers to increase by 40% YoY between 4Q
2005 and 4Q 2006 and 15% YoY between 4Q 2006 and 4Q 2007. Beyond 2008, Colliers believes that the
long term rental growth trend for the Hong Kong Grade A and Central Grade A office rental market will be
in line with the historical annual average rental growth between 1Q 1986 and 4Q 2004 of 5.0% for the Hong
Kong Grade A office sector and 5.8% for the Central Grade A office sector. Essentially, the prospective
rental growth rate of the Central District Grade A office sector is predicted by Colliers to surpass the
average rental growth rate of the Hong Kong Grade A office sector as a whole.




                                                               5
                                                                                                       OFFERING CIRCULAR SUMMARY

Rental Growth

                                                                                                       Central Grade A Office Rental Index
                                     200



                                     180


                                                                                                                                                                                                                                      40%
                                     160                                                                                                                                                                                            below
                                                                                                                                                                                                                                     1994
         Rental Index (1999 = 100)




                                                                                                                                                                                                                                     peak
                                     140



                                     120



                                     100



                                     80



                                     60



                                     40




                                                                                                                                                                                                                                                      1Q 2006 F#

                                                                                                                                                                                                                                                                   1Q 2007 F#
                                           1Q 1986

                                                     1Q 1987

                                                               1Q 1988


                                                                         1Q 1989

                                                                                   1Q 1990

                                                                                             1Q 1991

                                                                                                         1Q 1992

                                                                                                                   1Q 1993

                                                                                                                             1Q 1994


                                                                                                                                       1Q 1995

                                                                                                                                                 1Q 1996

                                                                                                                                                           1Q 1997


                                                                                                                                                                     1Q 1998

                                                                                                                                                                               1Q 1999

                                                                                                                                                                                          1Q 2000


                                                                                                                                                                                                    1Q 2001

                                                                                                                                                                                                              1Q 2002

                                                                                                                                                                                                                        1Q 2003

                                                                                                                                                                                                                                  1Q 2004

                                                                                                                                                                                                                                            1Q 2005
Source:                              Rating and Valuation Department, HKSAR Government (1986-2005); Colliers (2006-2007)


Note:

F#:      Forecast by Colliers.

     The following table summarizes the historical rental growth rates for Grade A office in Hong Kong
and in the Central District from 1986-2005 and projected rental growth rates from 2006 to 2007.
Period                                                                                                                                                     Hong Kong Grade A Office                                                 Central Grade A Office

Historical Annual Average (1986-2004)(1) *********                                                                                                                                       5.0%                                                              5.8%(2)
2005 ***************************************                                                                                                                                             29%                                                               50%(3)
2006F# *************************************                                                                                                                                             30%                                                               40%(3)
2007F# *************************************                                                                                                                                             10%                                                               15%(3)

Source:                              Rating and Valuation Department, HKSAR Government (1986 - 2005); Colliers (2006 - 2007)


Notes:
(1)      The highest YoY rental growth during this period was 61.3% for the Hong Kong Grade A office market and 72.9% for the
         Central Grade A office market, both in 1989. The sharpest YoY decline during this period was 27.7% for the Hong Kong
         Grade A office market and 30.2% for the Central Grade A office market, both in 1999.
(2)      The average of the YoY rental growth for each of the 76 quarters during the period from 1986 to 2004.
(3)      Represents the YoY historical or forecasted rental growth, as the case may be, between the fourth quarter of the preceding year
         and the fourth quarter of that year.
F#:      Forecast by Colliers.




                                                                                                                                                     6
                                 OFFERING CIRCULAR SUMMARY

KEY INVESTMENT HIGHLIGHTS OF CHAMPION REIT
     The Manager believes that Champion REIT presents Unitholders with an attractive investment
proposition:
     (    First REIT with exposure to prime Grade A office property in the premier CBD in the core
          Central District in Hong Kong;
     (    Very little foreseeable new office supply in the Central District in Hong Kong for the period up to
          December 31, 2010;
     (    Potential upside from the leasing of existing vacant space at the Property;
     (    Tenancy expiries and contractual rental reviews present an opportunity for rental ‘‘catch up’’;
     (    Large scale office complex in a prime, strategic location;
     (    High quality tenant base;
     (    Distribution waiver by GE Holder, KP Holder and Wing Tai (for the FY06 Distribution Period
          with respect to all of the Units they hold as of the Listing Date, for the FY07 Distribution Periods
          with respect to 55% of the Units they hold as of the Listing Date and for the FY08 Distribution
          Periods with respect to 20% of the Units they hold as of the Listing Date) provides DPU support
          for other Unitholders;
     (    Manager’s objective to provide Unitholders with stable and sustainable distributions;
     (    Implied Purchase Price of the Property at a discount to its Appraised Value; and
     (    Potential attractive growth opportunities through proactive property management and
          acquisitions.

First REIT with exposure to prime Grade A office property in the premier CBD in the core Central
District in Hong Kong
      Champion REIT will be the first REIT that holds prime Grade A office property in the premier CBD
in the core Central District in Hong Kong, which is the banking and financial center in Hong Kong and one
of the most important commercial hubs in Asia. The core Central District is traditionally home to the
regional headquarters of many multinational financial and business services companies. After the end of the
SARS outbreak in 2003, the core Central District has experienced a robust recovery in demand for prime
office space by the financial and business services sectors. In addition, the Grade A office rental in the
Central District as a whole is predicted by Colliers to increase by 40% in 2006. Champion REIT offers
investors the opportunity to gain direct exposure to and to benefit from projected rental growth in a prime
Grade A office property in the premier CBD in the core Central District in Hong Kong.

Very little foreseeable new office supply in the Central District in Hong Kong for the period up to
December 31, 2010
      According to Colliers, from 1986 to 2004, an average of 2.4 million sq. ft. of office supply was added
to the Hong Kong Grade A office market each year, of which an average of 0.5 million sq. ft. was in the
Central District. From 2005 through 2010, Colliers projects an average new supply of only 1.6 million sq. ft.
per annum being added to the Hong Kong Grade A office stock, and Colliers expects only approximately
0.16 million sq. ft. per annum of such supply will be in the Central District. According to Colliers, in 2006,
the only new Grade A office development expected to be completed in the Central District will be York
House with total floor area of approximately 0.1 million sq. ft. No new supply of Grade A office space in
the Central District is expected in 2007 and 2008, according to Colliers. The scarcity of office space in the
Central District has driven the average vacancy rate down from 15.2% in 2003 to approximately 5% in
December 2005, based on an internal survey undertaken by Colliers. Citibank Plaza is one of the largest
office complexes in the Central District and the Manager believes that it will be a prime beneficiary of the

                                                      7
                                 OFFERING CIRCULAR SUMMARY

expected favorable supply/demand dynamics for prime office space in the Central District, should the
current market conditions continue.

Potential upside from the leasing of existing vacant space at the Property
      During the market low in 2003 and 2004, Great Eagle adopted a selective leasing strategy that was
intended to preserve the potential for rental upside, based on its view that there would be very little new
supply of Central Grade A office space for several years after 2004. Therefore, during such period when the
market rental for Central Grade A office was at a low level, Great Eagle did not focus on maximizing overall
occupancy. In particular, Great Eagle did not seek to attract tenants with atypical features, such as fixing
rents for periods in excess of the market norm of three years without interim rent revisions and capping
reversionary rent rates. As a result, the average occupancy rate for office space of the Property dropped to
85.2% in 2003 and 78.0% in 2004. As the rental market in the Central District subsequently strengthened,
Great Eagle took advantage of this favorable trend and selectively leased a portion of the Property’s vacant
office space. The occupancy rate for office space of the Property had improved to 86.1% as of February 28,
2006. The Manager believes that Champion REIT is in a position to benefit from any continued positive
momentum from the leasing of vacant space as the Property’s vacancy rate still remains above the average
vacancy rate in the Central District, which was approximately 5% in December 2005, based on an internal
survey undertaken by Colliers.

Tenancy expiries and contractual rental reviews present an opportunity for rental ‘‘catch up’’
      In light of the strong rental growth of prime office space in the Central District after the end of the
SARS epidemic in Hong Kong in the second quarter of 2003, the Manager anticipates favorable rental
income growth in 2006 and 2007 for the Property, assuming current market conditions continue. The
Manager expects such anticipated growth to be driven by the replacement or renewal of expiring tenancies
which were entered into during the market low in 2003 and 2004, with new tenancies at higher rental rates
as well as renegotiation of rental rates of existing tenancies in accordance with contractual rent review
arrangements. As of February 28, 2006, tenancies comprising approximately 7.2% of the Gross Rentable
Area will expire in the 10 months ending December 31, 2006 and tenancies comprising approximately
18.9% of the Gross Rentable Area will expire in 2007, totalling 26.1% of Gross Rentable Area in the
10 months ending December 31, 2006 and in 2007. While no tenancies are scheduled for rent review in
2006, tenancies comprising 29.5% of the Gross Rentable Area of the Property as of February 28, 2006 were
scheduled for rent review in 2007. Thus in aggregate, as of February 28, 2006, tenancies comprising 55.6%
of Gross Rentable Area can potentially be relet, renewed or renegotiated in the 10 months ending
December 31, 2006 and in 2007 to achieve higher rents, assuming current market conditions continue. None
of the existing tenancies with rent review provisions contains any cap on rent revisions. The rent review
mechanism ensures flexibility for Champion REIT to adjust rental rates on existing tenancies according to
prevailing market conditions at the time of the relevant rental reviews while maintaining a high level of
stability for its tenant base.

Large scale office complex in a prime, strategic location
      Citibank Plaza is one of the largest Grade A office complexes in the Central District, comprising two
high-rise office towers, a retail podium and a carpark. It was awarded the Hong Kong Institute of Architects’
highest award, the Silver Medal, in 1995. Its two towers can be joined on 26 floors, and each of these
interconnecting floors can be configured to provide a floor plate with Gross Rentable Area of between
approximately 31,000 sq. ft., and 34,000 sq. ft., which is among the largest for Grade A office space in the
Central District in Hong Kong. Citibank Plaza is strategically located near the intersection of Garden Road
and Queen’s Road Central, the main road through the Central District, and is easily accessible by roads and
public transportation. It is also within a few minutes’ walk from the Central station of the Mass Transit
Railway. The Property comprises Gross Rentable Area of 1,160,227 sq. ft. in Citibank Plaza and includes

                                                     8
                                  OFFERING CIRCULAR SUMMARY

23 out of the 26 interconnecting floors. The Manager believes that the prime location and the large floor
plate of Citibank Plaza will continue to be key selling points to attract major tenants to the Property.

High quality tenant base

      The Property has a high quality tenant base with a total of 81 office and retail tenants under 106
tenancies as of February 28, 2006. These tenants include primarily banks and financial services firms, as
well as business and professional services firms and government and regulatory bodies. Major tenants
include multinational companies such as Barclays Capital Asia Limited, Citibank, N.A., The Hongkong and
Shanghai Banking Corporation Limited, Industrial and Commercial Bank of China (Asia) Limited and
Merrill Lynch (Asia Pacific) Limited. Certain major tenants have entered into long-term tenancies, with
terms of six years or more, rent review every three years, and expiries in 2010 and beyond, which provide a
high degree of stability for the tenant base.

Distribution waiver by GE Holder, KP Holder and Wing Tai (for the FY06 Distribution Period with
respect to all of the Units they hold as of the Listing Date, for the FY07 Distribution Periods with
respect to 55% of the Units they hold as of the Listing Date and for the FY08 Distribution Periods
with respect to 20% of the Units they hold as of the Listing Date) provides DPU support for other
Unitholders

      In order to support the distributions during the period before the Property is expected to fully benefit
from positive rental reversions from tenancy expiries and rent reviews and from the leasing of vacant
portions of the Property from below market occupancy levels, each of GE Holder (together with Great Eagle
as guarantor), KP Holder (together with Kerry Properties as guarantor) and Wing Tai (together with Great
Eagle as guarantor) has entered into a deed with the Trustee and the Manager pursuant to which it has
agreed to waive its entitlement to receive any distributions payable (a) for the FY06 Distribution Period with
respect to all of the Units it holds as of the Listing Date; (b) for the FY07 Distribution Periods with respect
to 55% of the Units it holds as of the Listing Date; and (c) for the FY08 Distribution Periods with respect to
20% of the Units it holds as of the Listing Date. Each such portion of the distributions waived will be
available for distribution to holders of Units with respect to which distributions have not been waived,
thereby enhancing the DPU for such periods.

Manager’s objective to provide Unitholders with stable and sustainable distributions

      One of the Manager’s primary objectives will be to provide Unitholders with stable and sustainable
after-tax distributions on a semi-annual basis. The Manager aims to accomplish this objective by adopting
proactive asset management, which is supported by the prime location and the high quality tenant base of
the Property, as well as through the anticipated rental income growth derived from the replacement of
expiring tenancies with new tenancies at higher rents, assuming current market conditions continue. In
addition, the New Property Companies have entered into interest rate swap arrangements whereby the
floating interest rate of the term loan of Champion REIT will be swapped into fixed interest rates, thereby
minimizing interest rate risk and increasing the stability of Champion REIT’s cash flow. Furthermore, in
order to reflect its confidence in Champion REIT, GE Holder (together with Great Eagle as guarantor) has
entered into a deed of guarantee with the Trustee and the Manager pursuant to which GE Holder has
guaranteed that the DPU payable to the Public Unitholders for the FY06 Distribution Period will not be less
than HK$0.1694 (after taking into account the effect of the Distribution Waiver). In the event the actual
DPU achieved (after taking into account the effect of the Distribution Waiver) is below the guaranteed level,
GE Holder will make up the shortfall in the form of a cash contribution to Champion REIT. The Manager
believes that the combination of the above factors, along with the Distribution Waiver, enhances Champion
REIT’s ability to provide Unitholders with stable and sustainable distributions.

                                                      9
                                  OFFERING CIRCULAR SUMMARY

Implied Purchase Price of the Property at a discount to its Appraised Value
      Champion REIT will be purchasing the Property at a discount to the Appraised Value of the Property
of HK$22,670 million as determined by the Independent Property Valuer as of February 28, 2006. The
Implied Purchase Price of the Property, based on the Maximum Offer Price of HK$5.75, is
HK$21,064 million, which is at a discount of 7.1% to the Appraised Value. The Implied Purchase Price of
the Property, based on the Minimum Offer Price of HK$5.00, is HK$19,030 million, which is at a discount
of 16.1% to the Appraised Value.

Potential attractive growth opportunities through proactive property management and acquisitions
      Champion REIT will be managed by the Manager which has a team of experienced professionals with
established track records in the real estate industry headed by Mr. Jeremy Bellinger Stewardson, the Chief
Executive Officer of the Manager. The Manager intends to proactively manage the Property in order to
maintain high occupancy levels, achieve strong rental growth and maximize net property income. The
Manager will work closely with the Property Manager and the DMC Manager to drive organic growth and
build and maintain strong relationships with tenants.
      In addition, as a publicly listed entity, Champion REIT will have access to capital through public
markets to facilitate growth through acquisitions. Although the Manager has not currently identified any
potential acquisitions, the Manager intends to pursue acquisition opportunities that may arise in the future
and enhance Champion REIT’s cash flows and yield. The Manager will evaluate acquisitions based on
various factors, including, but not limited to, the level of yield accretion, tenant mix and occupancy
characteristics, location, asset enhancement opportunities, and building and facilities specifications. See the
section headed ‘‘Strategy — Acquisition Strategy’’ in this Offering Circular.

SUMMARY STATISTICS OF THE PROPERTY


  Description                                 The Property comprises 91.5% of the Gross Rentable Area
                                              of Citibank Plaza, a modern glass and steel office complex
                                              comprising two high-rise office towers, a retail podium and
                                              a carpark, located at 3 Garden Road, Central, Hong Kong

  Year of Completion                          May 1992

  Occupancy                                    Average for year ended                     As of
                                                 December 31, 2005                  February 28, 2006
     — Office                                           86.3%                             86.1%
     — Retail                                           100.0%                            100.0%

  Number of Parking Spaces                    55 out of 58 private carparking spaces
                                              Public carpark with 500           carparking    spaces    and
                                              50 motorcycle parking spaces

  Total Floor Area (excluding the             1,492,526 sq. ft. (comprising 1,434,805 sq. ft. of office
    carpark)                                  space and 57,721 sq. ft. of retail space)

  Gross Rentable Area                         1,160,227 sq. ft. (comprising 1,117,634 sq. ft. of office
                                              space and 42,593 sq. ft. of retail space)


                                                      10
                           OFFERING CIRCULAR SUMMARY


Appraised Value                      HK$22,670 million (or HK$15,189 per sq. ft.), based on
  (As of February 28, 2006)          Total Floor Area of 1,492,526 sq. ft. (which excludes the
                                     carpark) and including the value of the private carparking
                                     spaces, the public carpark and the naming and signage rights

Implied Purchase Price               HK$19,030 million (or HK$12,750 per sq. ft. based on
                                     Total Floor Area), based on the Minimum Offer Price of
                                     HK$5.00, which represents a discount of 16.1% to the
                                     Appraised Value of the Property
                                     HK$21,064 million (or HK$14,113 per sq. ft. based on
                                     Total Floor Area), based on the Maximum Offer Price of
                                     HK$5.75, which represents a discount of 7.1% to the
                                     Appraised Value of the Property

Number of Tenants                    81 office and retail tenants under 106 tenancies
  (As of February 28, 2006)

Top Five Tenants by Rental           Citibank, N.A.
  Income for the month ended         Merrill Lynch (Asia Pacific) Limited
  February 28, 2006
                                     Industrial and Commercial Bank of China (Asia) Limited
                                     The Hongkong and Shanghai Banking Corporation Limited*
                                     The Financial Secretary Incorporated
                                     *
                                         a connected person

Rental Income from Top Five          56.3%
  Tenants as a percentage of total
  Rental Income for the month
  ended February 28, 2006

Gross Rentable Area Leased to Top    50.2%
  Five Tenants as a percentage of
  total Gross Rentable Area as of
  February 28, 2006

Government Grant Expiry              June 30, 2047




                                              11
                                               OFFERING CIRCULAR SUMMARY

OVERVIEW OF CHAMPION REIT STRUCTURE
      The following diagram depicts the ownership structure of Champion REIT and the primary contractual
relationships between Champion REIT, the Unitholders, the Manager, the Trustee, the Property Manager,
the DMC Manager and the DMC Sub-manager upon completion of the Global Offering (before any exercise
of the Over-allotment Option).
                                                                          Unitholders
                                                                 Great Eagle         49.2%
                                                                 Kerry Properties     4.2%
                                                                 Wing Tai             1.6%
                           Great Eagle
                                                                 Public Unitholders 45.0%



                                        100%
                                                                                        Distributions



                                                 Manager’s Fee                                          Trustee Fee


                            Manager                                    CHAMPION REIT
                                                                         CHAMPION                                                Trustee
                                                  Management               REIT                         Holds assets
                                                   Services(1)                                          on trust for
                                                                                                        Unitholders


                                                                        100%         Distributions
                                                                                                                   100%
                                                  Property and
                                                     lease
                                                  management
             100%                                     fees
                                                                                                        Interest
                           Property                                    Holding Companies and                                    Finance
                           Manager(2)                                   Property Companies                                      Company
                                                  Property and                                             Loan
                                                      lease
                                                  management
                                                   services(2)

                                      DMC                               100%
                                  management fees




             100%

                         DMC Manager

                                                                            The
                                                                          Property
             100%                                       DMC
                                                     management
                             DMC                     services(3)
                          Sub-manager

         Legend

                      Payments and services pursuant to contractual relationships under Trust Deed, Property Management Agreement and DMC


Notes:
(1)      The Manager will provide management services to Champion REIT and the Group Companies. The Manager will receive a
         Manager’s Fee from Champion REIT. See the section headed ‘‘The Manager — Fees, Costs and Expenses of the Manager’’ in
         this Offering Circular.




                                                                         12
                                      OFFERING CIRCULAR SUMMARY

(2)   The Property Manager will provide property and lease management services to the New Property Companies pursuant to the
      Property Management Agreement. The Property Manager will receive property and lease management fees from the New
      Property Companies. See the section headed ‘‘Material Agreements and Other Documents Relating to Champion REIT —
      Property Management Agreement’’ in this Offering Circular.
(3)   The DMC Manager has a general power of management in relation to Citibank Plaza in accordance with the provisions of the
      DMC, which has been delegated to the DMC Sub-manager. Each New Property Company, as an owner of a portion of Citibank
      Plaza, is obliged to pay management fees to the DMC Manager pursuant to the DMC. See the section headed ‘‘The DMC
      Manager’’ in this Offering Circular.

      Pursuant to the Reorganization, which was completed on April 26, 2006, the Trustee, as trustee of
Champion REIT, acquired the Holding Company Shares from the relevant Vendor Companies. See the
section headed ‘‘Reorganization, Structure and Organization of Champion REIT’’ in this Offering Circular.
Immediately following the completion of the Reorganization, the Predecessor Property Companies entered
into the Property Sale and Purchase Agreements with the New Property Companies pursuant to which each
New Property Company agreed to acquire the entire portion of the Property owned by the relevant
Predecessor Property Company. Under the Property Sale and Purchase Agreements, legal assignment of the
relevant portion of the Property will take place on the earlier of: (a) such date as may be notified by the
relevant New Property Company to the relevant Predecessor Property Company by not less than 14 clear
days’ notice in writing; and (b) the 10th anniversary of the date of the relevant Property Sale and Purchase
Agreement. Hong Kong stamp duty payable on the legal assignment of the Property would amount to
approximately HK$850.1 million at the current Hong Kong ad valorem stamp duty rate of 3.75%, based on
the stated consideration in the Property Sale and Purchase Agreements, and would be payable by the
respective New Property Companies (and effectively by Champion REIT since it wholly owns the New
Property Companies) on the legal assignment of the Property to the New Property Companies. See the
section headed ‘‘Risk Factors — Risks Relating to Champion REIT’s Organization and Operations —
Champion REIT may have to raise further equity and/or debt to fund stamp duty payment required in
connection with the Property Sale and Purchase Agreements and may be subject to such stamp duty prior to
the actual completion of the sale and purchase of the Property by the New Property Companies’’ in this
Offering Circular. An accrual for such stamp duty has been made, as reflected in the section headed
‘‘Unaudited Pro Forma Balance Sheet’’ in this Offering Circular.

THE MANAGER
     The Manager, Eagle Asset Management (CP) Limited, was incorporated in Hong Kong on January 12,
2006. The Manager is a wholly-owned subsidiary of Great Eagle and is an affiliate of the Property Manager,
which is also a wholly-owned subsidiary of Great Eagle.
     The Manager is licensed by the SFC to conduct the regulated activity of asset management. The
Manager is responsible for Champion REIT’s investment and financing strategies, asset enhancement and
acquisition and disposal policies and for overall management of the Property. See the section headed ‘‘The
Manager’’ in this Offering Circular for further details on the Manager.

OBJECTIVES AND STRATEGIES
      The Manager’s key objectives for Champion REIT are to provide Unitholders with stable and
sustainable distributions per Unit and to achieve long-term growth in the NAV per Unit. The Manager’s
principal investment strategy is to invest in income-producing office and retail properties in Hong Kong and
it aims to produce attractive total returns to Unitholders by proactively managing the Property and other
properties that Champion REIT may acquire in the future, and maintaining a high level of investment
discipline and financial flexibility. The Manager intends to hold the Property for long-term investment




                                                             13
                                 OFFERING CIRCULAR SUMMARY

purposes while also seeking yield-enhancing acquisition opportunities. The implementation of the
Manager’s strategy can be broadly categorized as follows:
     (    Asset Management Strategy. The Manager intends to proactively manage the Property to
          maximize rental income, improve occupancy levels, increase tenancy renewal rates and maintain
          a high quality tenant base. The Manager will work closely with both the Property Manager and
          the DMC Manager to drive organic growth and build and maintain strong relationships with
          tenants.
     (    Acquisition Strategy. The Manager intends to seek to selectively acquire additional income-
          producing properties that meet its investment criteria.
     (    Financing Strategy. The Manager will strive to employ appropriate debt and equity financing
          policies.
     For further details, see the section headed ‘‘Strategy’’ in this Offering Circular.

CORPORATE GOVERNANCE
     Detailed corporate governance policies and procedures have been established to promote the operation
of Champion REIT in a transparent manner and with built-in checks and balances. The Trustee and the
Manager are independent of each other, with their respective roles in relation to Champion 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 the Trustee also owes fiduciary duties.
     The Board comprises nine members, four of whom are independent non-executive Directors.
      Policies and procedures have been established for, among other things, monitoring and supervising
dealings in Units by the Directors and the Manager. For further details, see the section headed ‘‘Corporate
Governance’’ in this Offering Circular.

THE TRUSTEE
      The Trustee of Champion REIT is HSBC Institutional Trust Services (Asia) Limited. The Trustee is 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 authorized under
the SFO pursuant to the REIT Code. As of 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.

THE PROPERTY MANAGER
     The Property Manager is Eagle Property Management (CP) Limited and is a wholly-owned subsidiary
of Great Eagle.
      Under the Property Management Agreement, the Manager has appointed the Property Manager to
manage, supervise, maintain and market the Property for the benefit of the New Property Companies. The
Property Manager is responsible, subject to the overall management and supervision of the Manager, for all
property level accounting, lease management and administration, rent collection, property marketing,
insurance procurement, building safety, maintenance and repairs for the Property, management and
supervision of fitting out works carried out by tenants, contract management and financial management
matters, including preparation of the annual budget and tracking of expenditures.

                                                     14
                                OFFERING CIRCULAR SUMMARY

      For further information on the Property Manager, see the section headed ‘‘The Property Manager’’ in
this Offering Circular.

THE DMC MANAGER

      The DMC for Citibank Plaza provides for Longworth Management Limited to be the DMC Manager
unless it resigns or is removed by a resolution of owners holding not less than 75% of the undivided shares
in Citibank Plaza, in each case with three months’ notice. Longworth Management Limited, a wholly-
owned subsidiary of Great Eagle, has been the DMC Manager for Citibank Plaza since its completion in
1992.

     The DMC Manager has a general power of management in relation to Citibank Plaza in accordance
with the provisions of the DMC. Its scope of responsibilities under the DMC include, among others, the
maintenance, repair and upkeep of common areas, common facilities and public structures, the operation of
the building services systems and the maintenance of building security.

     Pursuant to the DMC, the DMC Manager is permitted to appoint a sub-manager, and has appointed
The Great Eagle Properties Management Company, Limited, another wholly-owned subsidiary of Great
Eagle, as the DMC Sub-manager to assume and perform the obligations of the DMC Manager under the
DMC.

     For further information on the DMC Manager and the DMC Sub-manager, see the section headed
‘‘The DMC Manager’’ in this Offering Circular.

SUMMARY HISTORICAL FINANCIAL INFORMATION

    The following tables set forth summary financial information on a combined historical basis for the
Group Companies.

      The summary historical combined income statements and combined cash flow statements data for
each of the years ended December 31, 2003, 2004 and 2005 and the combined balance sheets data as of
December 31, 2003, 2004 and 2005 have been derived from the Group Companies’ audited combined
financial information and related notes thereto which have been included in Appendix I to this Offering
Circular. The audited combined financial information and the related notes thereto have been prepared in
accordance with Hong Kong GAAP and have been audited by Deloitte Touche Tohmatsu, independent
auditors.

      The summary historical combined financial information for the Group Companies included below and
set forth in Appendix I to this Offering Circular is not indicative of Champion REIT’s future performance.
You should read the following summary financial information together with the sections headed ‘‘The
Property and Business’’, ‘‘Management’s Discussion and Analysis of Financial Condition and Results of
Operations’’, ‘‘Certain Factors Affecting Future Results of Operations and Financial Condition’’ and
‘‘Unaudited Pro Forma Balance Sheet’’ in this Offering Circular and the historical combined financial
information for the Group Companies and related notes thereto set forth in Appendix I to this Offering
Circular.




                                                    15
                                OFFERING CIRCULAR SUMMARY

                                                                              Year ended December 31,
                                                                       2003           2004            2005
                                                                                 (HK$ thousands)
Combined income statements data:
Rental and building management fee income
   Rental Income ****************************************             449,328        329,142         319,549
   Carpark income ***************************************              11,111          8,321           9,011
   Building management fee income*************************             73,548         66,126          72,723
Total rental and building management fee income *************         533,987        403,589         401,283
Rental related income ************************************              1,966          2,107           1,993
Rental related outgoings **********************************          (120,567)      (111,398)       (116,998)
Net rental income ***************************************             415,386        294,298         286,278
Other operating income ***********************************                770            104             109
Fitting out works of investment properties written off **********          —          (2,148)         (1,746)
Administrative expenses **********************************               (416)          (434)           (569)
(Decrease) increase in fair value of investment properties *******   (494,000)     1,988,859      11,925,276
Finance costs *******************************************            (101,183)       (63,450)        (88,242)
(Loss) profit before taxation *******************************        (179,443)     2,217,229      12,121,106
Taxation ***********************************************              (49,956)      (381,988)     (2,095,810)
(Loss) profit for the year**********************************         (229,399)     1,835,241      10,025,296
Attributable to
  Unitholders of the trust ********************************* (201,976)             1,648,435       8,973,397
  Minority interests **************************************   (27,423)               186,806       1,051,899
                                                             (229,399)             1,835,241      10,025,296

                                                                               As of December 31,
                                                                     2003            2004             2005
                                                                                (HK$ thousands)
Combined balance sheets data:
Non-current assets
  Investment properties ********************************* 8,763,000               10,752,500      22,670,000
  Amounts due from fellow subsidiaries *******************    72,638                  72,642              —
    Total non-current assets ***************************** 8,835,638              10,825,142      22,670,000
Current assets
  Accounts receivable, deposits and prepayments ************  15,860                  28,119          48,488
  Amounts due from fellow subsidiaries *******************    35,019                  29,537         111,118
  Tax prepaid *****************************************           —                    3,534           4,847
  Pledged bank deposits ********************************       3,600                   3,604           3,690
  Cash at bank****************************************         1,092                   3,561           3,606
    Total current assets*********************************     55,571                  68,355         171,749
Current liabilities
  Accounts payable and accruals *************************     15,069                  18,411            6,842
  Deposits received ************************************      64,698                  61,362           75,258
  Amounts due to fellow subsidiaries *********************     9,517                  15,641        2,096,879
  Provision for taxation*********************************      5,569                      —             9,562
    Total current liabilities ******************************  94,853                  95,414        2,188,541



                                                   16
                               OFFERING CIRCULAR SUMMARY

                                                                              As of December 31,
                                                                    2003             2004              2005
                                                                               (HK$ thousands)
Net current liabilities ***********************************         (39,282)         (27,059)       (2,016,792)
Total assets less current liabilities *************************   8,796,356       10,798,083        20,653,208
Non-current liabilities
  Deferred taxation ************************************            862,045        1,213,890         3,282,381
  Amounts due to fellow subsidiaries *********************        2,424,021        2,238,662                —
     Total non-current liabilities **************************     3,286,066        3,452,552         3,282,381
Net assets ********************************************           5,510,290        7,345,531        17,370,827
Issued equity******************************************              859                 859               859
Retained profits *************************************** 4,878,245                 6,526,680        15,500,077
Amounts attributable to unitholders of the trust************** 4,879,104           6,527,539        15,500,936
Minority interests **************************************        631,186             817,992         1,869,891
                                                               5,510,290           7,345,531        17,370,827

                                                                              Year ended December 31,
                                                                           2003         2004            2005
                                                                                   (HK$ thousands)
Combined cash flow statements data:
Net cash from operating activities ***************************** 270,825               190,612         160,280
Net cash from (used in) investing activities *********************        724           (2,784)         (3,548)
Net cash used in financing activities *************************** (326,644)           (185,359)       (156,687)
(Decrease) increase in cash and cash equivalents *****************    (55,095)           2,469              45
Cash and cash equivalents at the beginning of the year ************    56,187            1,092           3,561
Cash and cash equivalents at the end of the year representing cash at
  bank ***************************************************              1,092               3,561        3,606




                                                  17
                                  OFFERING CIRCULAR SUMMARY

SUMMARY PROFIT FORECAST


       Statements contained in the Summary Profit Forecast set out below that are not historical facts may
  be forward-looking statements. Such statements are based on the assumptions set forth 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 projected.
       Under no circumstances should the inclusion of such information herein be regarded as a
  representation, warranty or prediction by Champion REIT, the Manager, the Trustee, the
  Underwriters, the Listing Agent, Great Eagle, GE Holder, Kerry Properties, KP Holder, Wing Tai, the
  Vendor Companies or any other person that the underlying assumptions used in preparing the profit
  forecast will materialize or that the profit forecast results will be achieved or are likely to be achieved.
  See the section headed ‘‘Risk Factors — Risks relating to an investment in the Units — The forward-
  looking and certain other information in this Offering Circular may prove inaccurate’’ in this Offering
  Circular.
       The forecast and calculations made in preparing the profit forecast have been reviewed by
  Deloitte Touche Tohmatsu and the Listing Agent. Please refer to Appendix III to this Offering Circular
  for letters from Deloitte Touche Tohmatsu and the Listing Agent on the accounting policies adopted
  and calculations made in arriving at the profit forecast. The Manager and the Listing Agent consider
  the assumptions made in arriving at the profit forecast to be reasonable.
      The profit forecast assumes that the Listing Date will be May 24, 2006 and will vary if the Listing
  Date is different.


      The following table sets forth data extracted from the historical income statements of the Group
Companies for the years ended December 31, 2004 and 2005, and data extracted from Champion REIT’s
forecast combined income statements and Champion REIT’s distribution data for the Forecast Period, which
is from May 24, 2006 to December 31, 2006. Investors should note that the figures for the Forecast Period
are for less than a full year whereas those for 2004 and 2005 are for a full year.
                                                                                                       For the
                                                                          Year ended December 31,     Forecast
                                                                            2004          2005        Period(1)
                                                                          (HK$ thousands, except per Unit data)
                                                                          (audited)     (audited)
Combined income statements data:
  Rental Income *******************************************                329,142         319,549      256,850
  Carpark income ******************************************                  8,321           9,011        5,905
  Building management fee income ***************************                66,126          72,723       46,496
Rental and building management fee income ******************               403,589         401,283      309,251
  Surplus on forbearance fee *********************************               2,057           1,960           —
  Interest income from tenants********************************                  40              33           —
  Others **************************************************                     10              —            —
Rental related income **************************************                 2,107           1,993           —
  Building management fee **********************************               (76,146)        (79,810)     (48,494)
  Carpark operating costs ************************************              (1,266)         (1,349)        (820)
  Government rent and rates *********************************              (11,472)        (10,913)     (10,426)
  Lease agency fee *****************************************               (18,453)        (20,072)      (9,418)
  Property and lease management services fees ******************                —               —        (7,726)
  Property marketing services fees ****************************                 —               —        (1,258)
  Legal cost and stamp duty *********************************               (1,870)         (1,222)      (1,318)
  Property miscellaneous expenses ****************************              (1,771)           (530)      (2,556)



                                                      18
                                           OFFERING CIRCULAR SUMMARY

                                                                                                                       For the
                                                                                          Year ended December 31,     Forecast
                                                                                            2004          2005        Period(1)
                                                                                          (HK$ thousands, except per Unit data)
                                                                                          (audited)     (audited)
  Repairs and maintenance***********************************                                   (420)            (3,102)         (1,506)
Rental related outgoings ************************************                              (111,398)          (116,998)        (83,522)
Net rental income******************************************             294,298                               286,278          225,729
Other operating income **************************************               104                                   109               —
Manager’s fee *********************************************                  —                                     —               —(2)
Trustee’s fee and expenses ***********************************               —                                     —            (4,427)
Fitting out works of investment properties written off *************     (2,148)                               (1,746)          (1,627)
Administrative expenses *************************************              (434)                                 (569)              —
Increase in fair value of investment properties(3) ****************** 1,988,859                            11,925,276               —
Finance costs **********************************************            (63,450)                              (88,242)        (196,515)
Profit before taxation*************************************** 2,217,229                                    12,121,106           23,160
   Hong Kong Profits Tax ************************************           (30,143)                              (27,319)              —
   Deferred taxation ***************************************** (351,845)                                   (2,068,491)          (5,113)
Taxation ************************************************** (381,988)                                      (2,095,810)          (5,113)
Profit for the year/period *********************************** 1,835,241                                   10,025,296           18,047


Profit for the year/period excluding increase in fair value of
  investment properties and related deferred taxation**************                         188,832             172,175         18,047

Distribution data:
Profit for the period****************************************************************** 18,047
Adjustments(4) *********************************************************************** 191,071
Distributable income ***************************************************************** 209,118
                                                                                                  Based on the            Based on the
                                                                                                   Minimum                 Maximum
                                                                                                   Offer Price             Offer Price
Offer Price (HK$) ***********************************************                                        5.00                    5.75
Assumed number of Units held by Public Unitholders as of the Record
  Date for the FY06 Distribution Period (millions) ********************                             1,234.2(5)               1,234.2(5)
Forecasted distribution per Unit (HK$) of the Units held by Public
  Unitholders as of record date for FY06 Distribution Period (after taking
  into account the effect of the Distribution Waiver) *******************                             0.1694                  0.1694
Forecasted annualized profit yield after taxation
  Before taking into account the effect of the Distribution Waiver(6) ******                             0.22%                   0.19%
  After taking into account the effect of the Distribution Waiver(6) ********                            0.48%                   0.42%
Forecasted annualized distribution yield after taxation
  Before taking into account the effect of the Distribution Waiver(7) ******                             2.51%                   2.18%
  After taking into account the effect of the Distribution Waiver(7) ****                                5.57%                   4.84%

Notes:
(1)      In preparing the profit forecast for the Forecast Period, the Manager has excluded (a) any goodwill or negative goodwill; and
         (b) the costs and expenses of obtaining the listing status of Champion REIT of HK$31.3 million which have to be charged to
         the income statement. The Manager considers that these items are non-recurring in nature and the inclusion of such items will
         distort the comparability of profit/loss from period to period. In any case, such items will have no impact on the distributable
         income of Champion REIT.
(2)      Under the Trust Deed, provided that Champion REIT achieves net property income (before deduction therefrom of the
         Manager’s Fee) of HK$270 million for the period from the Listing Date to December 31, 2006, the Manager will receive a




                                                                    19
                                        OFFERING CIRCULAR SUMMARY

      Manager’s Fee of 12% of the net property income of Champion REIT (before deduction therefrom of the Manager’s Fee) for
      such period. Based on a projected net property income of HK$225.7 million, the Manager will receive no Manager’s Fee for
      the Forecast Period.
(3)   The Manager considers that there is no reliable basis for determining the market value for the Property as of any future date.
      Accordingly, for the purpose of the profit forecast, the Manager has assumed that the market value of the Property as of
      December 31, 2006 will be the same as the Appraised Value. Changes in the fair value of investment properties will not affect
      Annual Distributable Income.
(4)   Adjustments are made to add back (a) the non-cash portion (HK$186.0 million) of the finance cost (HK$196.5 million) for the
      Forecast Period (the difference of HK$10.6 million being the cash finance costs payable to the swap counterparty); and
      (b) deferred taxation of HK$5.1 million for the Forecast Period. The finance cost of HK$196.5 million includes amortization of
      the front-end fee of HK$36.0 million payable in respect of the Facility.
(5)   For the purpose of calculating the distribution per Unit (HK$) of the Units held by Public Unitholders as of the Record Date
      for the FY06 Distribution Period set forth in the table above, it is assumed the number of Units held by the Public Unitholders
      as of such Record Date will be the same as that as of the Listing Date. Investors should note that the DPU for the FY06
      Distribution Period, the FY07 Distribution Periods and the FY08 Distribution Periods will be enhanced by the Distribution
      Waiver as well as by the interest rate swaps, the enhancement effect of which will diminish over the applicable periods of the
      Distribution Waiver ending with the Final FY08 Distribution Period and over the five-year term of the interest rate swaps.
      There is no assurance that the DPU for future periods will not decrease.
(6)   The forecasted annualized profit yield for the Forecast Period is provided for illustrative purposes only, and calculated as
      follows: (Profit for the Forecast Period assuming no change in fair value of investment properties/number of days in the
      Forecast Period) x 365/number of Units held by Public Unitholders as of the Record Date for the FY06 Distribution
      Period/Offer Price and excludes brokerage of 1%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy
      of 0.005%.
(7)   The forecasted annualized distribution yield for the Forecast Period is provided for illustrative purposes only and the actual
      annualized distribution yield may differ. Investors should note that GE Holder (together with Great Eagle as guarantor) has
      entered into the DPU Guarantee Deed with the Trustee and the Manager pursuant to which GE Holder has guaranteed that the
      DPU for the FY06 Distribution Period which each Public Unitholder will receive will not be less than HK$0.1694 (after taking
      into account the effect of the Distribution Waiver). The forecasted annualized distribution yield for the Forecast Period is
      calculated as follows: (DPU for Forecast Period/number of days in the Forecast Period x 365)/Offer Price and excludes
      brokerage of 1%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.005%.

      Investors should note that the distribution yield after taxation is different from the profit yield
after taxation. The difference between the distribution yield and the profit yield is due to the
adjustments as described in footnote 4 above. Investors should also note that the distribution yield for
the Forecast Period is higher than the profit yield partly as a result of the lower cash finance cost
payable under the interest rate swaps as compared to the amount of ‘‘effective interest’’ to be charged
to the income statement of Champion REIT as ‘‘Finance costs’’. As the upfront swap payments of
HK$1,417.0 million and the debt front-end fee of HK$36.0 million, totaling HK$1,453.0 million, are
funded by the proceeds of the Global Offering, this effectively means that part of the distribution over the
concurrent five-year term of the Facility and the interest rate swaps represents a partial return of equity. The
upfront swap payments and the debt front-end fee will effectively be distributed to the Unitholders over such
five-year term based on the amount of ‘‘effective interest’’ charged to the income statement of Champion
REIT as ‘‘Finance costs’’ in each financial year less the amount of cash finance cost actually paid during the
same period, as follows:
                                                         Listing Date
                                                               to
                                                         December 31,               For the Year Ending December 31,
                                                             2006            2007        2008        2009        2010        2011

Amount of equity effectively returned to
 Unitholders (HK$ millions) **********                        186.0          312.0       301.9       284.1        265.2       103.8
      See the section headed ‘‘Certain Factors Affecting Future Results of Operations and Financial
Condition — Change in Nature of Existing Costs — Finance Costs and Interest Rate Swaps’’ in this
Offering Circular.

                                                                20
                                         OFFERING CIRCULAR SUMMARY

      GE Holder (together with Great Eagle as guarantor) has entered into a deed of guarantee with the
Trustee and the Manager pursuant to which GE Holder has guaranteed that the DPU for the FY06
Distribution Period which each Public Unitholder will receive will not be less than HK$0.1694 (after taking
into account the effect of the Distribution Waiver). Except for such deed of guarantee, none of Champion
REIT, the Manager, the Trustee, the Underwriters, the Listing Agent, Great Eagle, GE Holder, Kerry
Properties, KP Holder, Wing Tai, the Vendor Companies or any other person guarantees the performance of
Champion REIT, the repayment of capital or the payment of any distributions, or any particular return on
the Units. The profit forecast and projected distribution and profit yields stated in the table above are
calculated based on the Maximum Offer Price and the Minimum Offer Price. Such yields will vary for
investors who purchase Units in the secondary market at a market price that differs from the Maximum
Offer Price and the Minimum Offer Price.

CERTAIN FEES AND CHARGES

     The following is a summary of certain fees and charges payable by Unitholders in connection with the
subscription of Units:

                   Payable by Unitholders directly                                      Amount Payable                 B14(a)

 (a)        Brokerage                                            1% of Maximum Offer Price, subject to refund(1)
 (b)        Hong Kong Stock Exchange trading fee                 0.005% of Maximum Offer Price, subject to refund(1)
 (c)        SFC transaction levy                                 0.005% of Maximum Offer Price, subject to refund(1)


Note:

(1)     Subject to refund, if and to the extent the Offer Price is lower than the Maximum Offer Price.




                                                                21
                              OFFERING CIRCULAR SUMMARY

      The following is a summary of certain fees and charges payable by Champion REIT in connection        B14(b)
with the establishment and ongoing management of Champion REIT:

              Payable by Champion REIT                              Amount Payable

 (a)    Manager’s management fee (payable        A Manager’s Fee of 12% of the net property income
        by Champion REIT)                        (before deduction therefrom of the Manager’s Fee)
                                                 for the period between the Listing Date and
                                                 December 31, 2006, if the net property income
                                                 (before deduction therefrom of the Manager’s Fee)
                                                 for such period is equal to or exceeds
                                                 HK$270 million.
                                                 In respect of each semi-annual period after the first
                                                 financial year of Champion REIT, if the net property
                                                 income (before deduction therefrom of the Manager’s
                                                 Fee) for that semi-annual period is equal to or exceeds
                                                 HK$200 million, a Manager’s Fee of 12% of the net
                                                 property income (before deduction therefrom of the
                                                 Manager’s Fee) for that semi-annual period.
                                                 Accordingly, if the net property income for any
                                                 period is below the applicable threshold, the
                                                 Manager will not receive any Manager’s Fee for
                                                 such period. If the net property income for any
                                                 period is equal to or more than the applicable
                                                 threshold, the Manager will be entitled to receive the
                                                 Manager’s Fee, calculated based on 12% of the
                                                 entirety of the net property income achieved. See the
                                                 section headed ‘‘The Manager — Fees, Costs and
                                                 Expenses of the Manager’’ in this Offering Circular.




                                                22
                            OFFERING CIRCULAR SUMMARY

             Payable by Champion REIT                          Amount Payable

(b)   Trustee’s fee                         Ongoing fee — Currently not more than 0.03% per
                                            annum of the value of the Deposited Property,
                                            subject to a minimum of HK$200,000 per month
                                            (maximum 0.06% per annum of the value of the
                                            Deposited Property).
                                            Champion REIT will also pay to the Trustee a
                                            one-time inception fee of no more than HK$200,000.
                                            Additional fees may be payable to the Trustee in
                                            certain circumstances. The Trustee may also charge
                                            Champion REIT additional fees on a time-cost basis
                                            at a rate to be agreed with the Manager from time to
                                            time, if the Trustee were to undertake duties that are
                                            of an exceptional nature or otherwise outside the
                                            scope of its normal duties in the ordinary course of
                                            normal day-to-day business operation of Champion
                                            REIT, such as acquisition or divestment of
                                            investments by Champion REIT after the IPO. Such
                                            fees shall be subject to the following limits:
                                            (i)   where such fees relate to a transaction, an
                                                  aggregate amount not exceeding 0.05% of the
                                                  acquisition price or sale price (as the case may
                                                  be) of the real estate; and
                                            (ii) the aggregate amount of such fees that do not
                                                 relate to any specific transaction described in
                                                 (i) above shall be limited to 20% of the
                                                 Trustee’s ongoing fees (as stated above) for that
                                                 financial year.
                                            See the section headed ‘‘The Trust Deed —
                                            Trustee’s Fee’’ in this Offering Circular.


(c)   Property management fee (payable to   3.0% per annum of Gross Property Revenue
      the Property Manager by each New
      Property Company)




                                            23
                                           OFFERING CIRCULAR SUMMARY

                      Payable by Champion REIT                                            Amount Payable

 (d)         (i)    Marketing services fee (payable to             (1) One month’s base rent for securing a tenancy
                    the Property Manager by each                       of three years or more
                    New Property Company)(1)                       (2) One-half month’s base rent for securing a
                                                                       tenancy of less than three years
                                                                   (3) One-half month’s base rent for securing a
                                                                       renewal of tenancy irrespective of duration of
                                                                       the renewal term
                                                                   (4) 10.0% of the total licence fee for securing a
                                                                       licence for a duration of less than 12 months

             (ii)   Lease agency fee (payable to                   Negotiated on a case-by-case basis based on market
                    third party agents)(1)                         conditions for securing a tenancy

 (e)         Acquisition fee (payable to the                       Up to 1.0% of the acquisition price of real estate
             Manager)                                              property acquired (but no acquisition fee is payable
                                                                   for the acquisition of the Holding Company
                                                                   Shares)(2)

 (f)         Divestment fee (payable to the                        Up to 0.5% of the sale price of real estate property
             Manager)                                              divested(2)

 (g)         Others                                                Champion REIT and the Manager will also need to
                                                                   pay certain other ongoing fees and expenses for the
                                                                   daily operations of Champion REIT, such as annual
                                                                   listing fees, financial report printing fees, auditors’
                                                                   fees, legal advisors’ fees, fees of its appointed
                                                                   independent property valuer and fees of other
                                                                   professional advisors. See the section headed ‘‘The
                                                                   Manager — Fees, Costs and Expenses of the
                                                                   Manager’’ in this Offering Circular.


Notes:
(1)      For any new tenancy, Champion REIT will pay a leasing commission either to the Property Manager (in the form of property
         marketing service fees under the Property Management Agreement) or to the third party leasing agent (in the form of lease
         agency fees). On that basis, such leasing commission will only be paid once to the party that introduces the new tenant.
(2)      Any payment to third party agents or brokers in connection with the acquisition or divestment of any real estate for Champion
         REIT shall be paid by the Manager to such persons out of the acquisition fee or the divestment fee received by the Manager,
         and not additionally by Champion REIT or out of the assets of the relevant property company. See the section headed ‘‘The
         Manager — Fees, Costs and Expenses of the Manager’’ in this Offering Circular.




                                                                  24
                                    THE GLOBAL OFFERING

Champion REIT ***************** Champion Real Estate Investment Trust is a collective investment
                                scheme constituted as a unit trust by the Trust Deed and
                                authorized under section 104 of the SFO.
The Manager******************** Eagle Asset Management (CP) Limited.
The Trustee ********************* HSBC Institutional Trust Services (Asia) Limited.
The Hong Kong Public Offering *** An initial offer of 123,422,000 Units to the public in Hong Kong,       B8
                                  subject to reallocation.
The International Offering ******** An initial offer of 1,110,797,752 Units (subject to reallocation      B8
                                    and the exercise of the Over-allotment Option) to institutional,
                                    professional and other investors (a) outside the United States in
                                    offshore transactions in reliance on Regulation S and (b) in the
                                    United States only to qualified institutional buyers in reliance on
                                    Rule 144A or other applicable exemptions from the registration
                                    requirements of the US Securities Act, subject to the terms and
                                    conditions described in this Offering Circular.
The Preferential Offering ********* An initial offer of 53,822,174 Units to Qualifying Great Eagle        B8
                                    Shareholders out of the Units being offered under the
                                    International Offering.
The Global Offering************** An initial offer of 1,234,219,752 Units and consisting of the
                                  Hong Kong Public Offering and the International Offering. The
                                  Units allocated to the Hong Kong Public Offering and the
                                  International Offering are subject to reallocation and the exercise
                                  of the Over-allotment Option.
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 for US Securities Act   The Units are being offered and sold outside the United States in
  purposes ********************** reliance on Regulation S and in the United States in reliance on
                                  Rule 144A or other applicable exemptions from the registration
                                  requirements of the US Securities Act. The Units have not been
                                  and will not be registered under the US Securities Act.
Offer Price Range**************** The Offer Price of the Units will not be more than HK$5.75 and
                                  is currently expected to be not less than HK$5.00.
Charges Payable by Investors****** In addition to the Maximum Offer Price, investors applying for         B14(a)
                                   Units in the Global Offering must pay brokerage of 1%, Hong
                                   Kong Stock Exchange trading fee of 0.005% and SFC transaction
                                   levy of 0.005%, subject to refund if the Offer Price is lower than
                                   the Maximum Offer Price.
Over-allotment Option ************ The International Underwriters are expected to be granted an
                                   Over-allotment Option by GE Holder (together with Great Eagle
                                   as guarantor), KP Holder (together with Kerry Properties as
                                   guarantor) and Wing Tai pursuant to the Over-allotment
                                   Agreement, exercisable in full or in part, on one occasion on or
                                   after the Listing Date but before the expiry of 30 days after the
                                   last day for lodging Application Forms under the Hong Kong

                                                  25
                                   THE GLOBAL OFFERING

                                       Public Offering, to purchase from such parties up to an aggregate
                                       of 165,619,949, 14,088,618 and 5,424,396 Units, respectively.
                                       The exercise of the Over-allotment Option will not increase the
                                       total number of outstanding Units. The total number of Units
                                       subject to the Over-allotment Option will constitute
                                       approximately 15% 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.

Lock-ups************************ Great Eagle, GE Holder, Kerry Properties, KP Holder and Wing               B6
                                 Tai have entered into certain lock-up arrangements with the
                                 Underwriters with respect to their Units for a period of 180 days
                                 from and including the Listing Date, subject to certain exceptions.
                                 See the section headed ‘‘Underwriting’’ in this Offering Circular.

Market Capitalization ************ HK$15,771 million, based on the Maximum Offer Price or
                                   HK$13,714 million, based on the Minimum Offer Price.

Pro Forma NAV per Unit as of the                                                                            B10
  Listing Date ******************* HK$5.94


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 Wednesday, May 24, 2006. 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 Champion 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.

Stabilization ********************* In connection with the Global Offering, Merrill Lynch Far East
                                    Limited, as the Stabilizing Manager, may over-allot or effect
                                    transactions with a view to supporting the market price of the

                                                 26
                                     THE GLOBAL OFFERING

                                        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.
No Redemption Right for
  Unitholders ******************* Unitholders have no right to request that the Manager
                                  redeem their Units at any time. Listing of the Units on the
                                  Hong Kong Stock Exchange does not guarantee a liquid
                                  market for the Units.
Profit Forecast (for the FY06
  Distribution Period) ************ The Manager forecasts that, in the absence of unforeseen
                                    circumstances and on the basis and assumptions set out in the
                                    section headed ‘‘Profit Forecast’’ in this Offering Circular, the
                                    Annual Distributable Income of Champion REIT for the FY06
                                    Distribution Period will be not less than HK$209.1 million. For
                                    further details, including the principal 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                     B2(l)
                                   distributions an amount equivalent to 100% of Champion REIT’s               7.12
                                   Annual Distributable Income for each financial year, as more
                                   fully described in the section headed ‘‘Distribution Policy’’ in this
                                   Offering Circular. Pursuant to the Trust Deed, Champion REIT is,
                                   in any event, required to distribute at least 90% of its Annual
                                   Distributable Income for each financial year. Distributions will be
                                   declared in Hong Kong dollars.
                                        See the section headed ‘‘Risk Factors’’ in this Offering Circular
                                        for a discussion of factors that may adversely affect the ability of
                                        Champion REIT to make distributions to Unitholders.
DPU Guarantee****************** GE Holder (together with Great Eagle as guarantor) has entered
                                into a deed of guarantee with the Trustee and the Manager
                                pursuant to which GE Holder has guaranteed that the DPU for the
                                FY06 Distribution Period payable to the Public Unitholders will
                                not be less than HK$0.1694 (after taking into account the effect
                                of the Distribution Waiver).
Distribution Waiver ************** Each of GE Holder (together with Great Eagle as guarantor), KP
                                   Holder (together with Kerry Properties as guarantor) and Wing
                                   Tai (together with Great Eagle as guarantor) has entered into a
                                   deed with the Trustee and the Manager pursuant to which it has
                                   agreed to waive its entitlement to receive any distributions
                                   payable (a) for the FY06 Distribution Period with respect to all of
                                   the Units it holds as of the Listing Date; (b) for the FY07
                                   Distribution Periods with respect to 55% of the Units it holds as
                                   of the Listing Date and (c) for the FY08 Distribution Periods with
                                   respect to 20% of the Units it holds as of the Listing Date. Each
                                   such portion of the distributions waived will be available for
                                   distribution to holders of Units with respect to which distributions

                                                   27
                                    THE GLOBAL OFFERING

                                       have not been waived, thereby enhancing the DPU for such
                                       periods. Each of GE Holder (together with Great Eagle as
                                       guarantor), KP Holder (together with Kerry Properties as
                                       guarantor) and Wing Tai (together with Great Eagle as guarantor)
                                       has further agreed with respect to itself that if it holds less than
                                       the number of Units in respect of which the Distribution Waiver
                                       applies as of the relevant Record Dates for distributions payable
                                       in respect of the FY06 Distribution Period, the FY07 Distribution
                                       Periods or the FY08 Distribution Periods, as the case may be, it
                                       will make a cash contribution to Champion REIT to make up the
                                       shortfall so as to place the other Unitholders in a position that is
                                       no worse than if it had not so reduced its holdings. This will
                                       enhance the cash flows available for distribution to the other
                                       Unitholders.

Statement of Distribution ********* Champion REIT intends to achieve a total distribution amount per
                                    Unit of not less than HK$0.1694 in respect of the FY06
                                    Distribution Period, representing an annualized distribution yield
                                    of 4.84% based on the Maximum Offer Price and 5.57% based on
                                    the Minimum Offer Price (in each case after taking into account
                                    the effect of the Distribution Waiver and the interest rate swaps,
                                    and excluding other transaction costs). The forecasted annualized
                                    profit yield is 0.42% based on the Maximum Offer Price and
                                    0.48% based on the Minimum Offer Price (in each case after
                                    taking into account the effect of the Distribution Waiver and
                                    excluding other transaction costs). The distribution amount
                                    declared for the FY06 Distribution Period will be paid to the
                                    Public Unitholders as of the Record Date for such
                                    distribution.

Tax Considerations *************** See the section headed ‘‘Taxation’’ in this Offering Circular for
                                   further information on certain tax consequences of the purchase,
                                   ownership and disposition of the Units.

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

Termination of Champion REIT *** Champion REIT may be terminated by the Trustee or the                        B29
                                 Manager 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 the risks
                                  connected with an investment in the Units. Certain of these
                                  risks are discussed in the section headed ‘‘Risk Factors’’ in
                                  this Offering Circular.




                                                 28
                      INFORMATION ABOUT THIS OFFERING CIRCULAR                                                  B28
                              AND THE GLOBAL OFFERING

MANAGER’S RESPONSIBILITY FOR THE CONTENTS OF THIS OFFERING CIRCULAR
     The Manager and the Directors (whose names appear in the section headed ‘‘Parties Involved in the          B26
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 material facts the omission of which
would make any statement in this Offering Circular misleading.

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

UNDERWRITING
      This Offering Circular is published solely in connection with the Hong Kong Public Offering and the
Preferential Offering, which form part of the Global Offering. For applicants under the Hong Kong Public
Offering, this Offering Circular and the WHITE and YELLOW Application Forms contain the terms and
conditions of the Hong Kong Public Offering. For applicants under the Preferential Offering, this Offering
Circular and the BLUE Application Form set out the terms and conditions of the Preferential Offering. The
Global Offering is managed by the Sole Global Coordinator. Pursuant to the Hong Kong Underwriting
Agreement, the Hong Kong Public Offering is underwritten by the Hong Kong Underwriters. Pursuant to
the International Underwriting Agreement, the Preferential Offering is expected to be underwritten by the
International Underwriters. 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 and the Reserved 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 authorized to give any
information in connection with the Hong Kong Public Offering and the Preferential 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 authorized by the Manager, the Trustee, the Sole Global
Coordinator, the Underwriters, any of their respective directors, agents, employees or advisors or any other
parties involved in the Global Offering.
       The Units have not been registered under the US Securities Act or with a securities regulatory
authority of any state of the United States. The Global Offering is being made in accordance with
Rule 144A, Regulation S or other exemptions under the US Securities Act. 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 Champion REIT
or the Units in any country or jurisdiction other than Hong Kong and, accordingly, the Units may not be
offered, sold, pledged or otherwise transferred or delivered within the United States except to qualified
institutional buyers in reliance on the exemption from the registration requirements of the US Securities Act
provided by Rule 144A or other exemptions to the registration requirements under the US Securities Act
and in offshore transactions to persons outside the United States in reliance on Regulation S. 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.

                                                     29
                       INFORMATION ABOUT THIS OFFERING CIRCULAR
                               AND THE GLOBAL OFFERING

      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 advisors if they are in any
doubt as to the regulatory implications of subscribing for, purchasing, holding, disposing of or
otherwise dealing in Units.

Units Offered Outside the United States
     Each purchaser of Units outside the United States, by accepting delivery of this Offering Circular and
the Units, will be deemed to have represented and agreed as follows:
     (a)   The purchaser acknowledges (if it is a broker-dealer, its customer has confirmed to it that such
           customer acknowledges) that the Units have not been and will not be registered under the
           US Securities Act or with any securities regulatory authority of any state or territory of the
           United States or other jurisdiction and that the purchaser will not offer, sell, pledge or otherwise
           transfer such Units other than in accordance with US federal securities laws, and any applicable
           laws of any state or territory of the United States and any other jurisdiction.
     (b)   The purchaser, and the person, if any, for whose account it is acquiring the Units, is purchasing
           such Units outside the United States in an offshore transaction meeting the requirements of
           Regulation S and the purchaser is not an affiliate of Champion REIT or a person acting on behalf
           of Champion REIT or such an affiliate.
     (c)   Any resale or other transfer, or attempted resale or other transfer, of the Units made other than in
           compliance with the above-stated restrictions shall not be recognized by Champion REIT.
     (d)   The purchaser acknowledges that Champion REIT, the Manager, the Trustee, the Underwriters,
           Great Eagle, GE Holder, Kerry Properties, KP Holder, Wing Tai and others will rely upon the
           truth and accuracy of the foregoing acknowledgements, representations and agreements and
           agrees that, if any of such acknowledgements, representations or warranties deemed to have been
           made by virtue of its purchase of the Units are no longer accurate, it will promptly notify the
           Manager, and if it is acquiring any Units as a fiduciary or agent for one or more accounts, it
           represents that it has sole investment discretion with respect to each such account and that it has
           full power to make the foregoing acknowledgements, representations and agreements on behalf
           of each such account.

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 (including the Units which may be sold pursuant to the
Over-allotment Option). Dealings in the Units on the Hong Kong Stock Exchange are expected to
commence on Wednesday, May 24, 2006.

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.

                                                      30
                       INFORMATION ABOUT THIS OFFERING CIRCULAR
                               AND THE GLOBAL OFFERING

     All activities under CCASS are subject to the General Rules of CCASS and the 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 or the Preferential Offering. Subsequent dealings in Units
will be subject to Hong Kong stamp duty.

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
advisor.

      None of Champion REIT, the Trustee, the Manager, the Directors, the Underwriters, the Listing
Agent, Great Eagle, GE Holder, Kerry Properties, KP Holder, Wing Tai, the Vendor Companies nor any
other person involved in the Global Offering accepts any 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$5.75 and the Offer Price is expected to be determined by agreement
between Great Eagle, the Manager and the Joint Lead Underwriters (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$5.75 per Unit (plus brokerage of            B14(a)
1%, 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 and Reserved Units’’ immediately
below.

PROCEDURES FOR APPLICATION FOR HONG KONG PUBLIC OFFERING UNITS AND
RESERVED UNITS

      The procedures for applying for the Hong Kong Public Offering Units and Reserved Units are set out
in the sections headed ‘‘How to apply for Hong Kong Public Offering Units and Reserved Units’’ and
‘‘Further Terms and Conditions of the Hong Kong Public Offering and the Preferential Offering’’ in this
Offering Circular and in the relevant Application Forms.

CONDITIONS OF THE HONG KONG PUBLIC OFFERING AND THE PREFERENTIAL
OFFERING

      Details of the conditions of the Hong Kong Public Offering and the Preferential Offering are set out in
the section headed ‘‘Structure of the Global Offering — Conditions of the Hong Kong Public Offering and
the Preferential Offering’’ in this Offering Circular.

                                                      31
                      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.

ROUNDING
      For the purpose of consistency, where applicable and not otherwise stated, percentage figures in this
Offering Circular have been rounded to up to two decimal places and certain financial figures have been
rounded to the nearest thousand or million, or up to two decimal places, as applicable. Such figures and
calculations derived from such figures are therefore subject to rounding adjustments.
      Any discrepancies in any table or the notes to such table between totals and sums of amounts listed
therein are due to rounding adjustments.




                                                    32
                     PARTIES INVOLVED IN THE GLOBAL OFFERING


Champion REIT **************************         As constituted by the Trust Deed entered into on    B1
                                                 April 26, 2006 in Hong Kong

Great Eagle ******************************       Great Eagle Holdings Limited
                                                 33/F, Great Eagle Centre
                                                 23 Harbour Road
                                                 Wanchai
                                                 Hong Kong

Manager *********************************        Eagle Asset Management (CP) Limited                 B4(a)
                                                 Suite 2804, 28/F, Great Eagle Centre
                                                 23 Harbour Road
                                                 Wanchai
                                                 Hong Kong

Directors

  Chairman*******************************        Dr. LO Ka Shui

  Executive Director ***********************     Mr. STEWARDSON, Jeremy Bellinger

  Non-executive Directors *******************    Dr. LO Ka Shui
                                                 Mr. ANG Keng Lam
                                                 Mr. CHENG Wai Chee, Christopher
                                                 Mr. LO Kai Shui

  Independent Non-executive Directors ********   Mr. CHA Mou Sing, Payson
                                                 Professor K.C. CHAN
                                                 Mr. ELDON, David Gordon
                                                 Mr. SHEK Lai Him, Abraham

Trustee **********************************       HSBC Institutional Trust Services (Asia) Limited    B4(b)
                                                 1 Queen’s Road Central
                                                 Hong Kong

Unit Registrar ****************************      Computershare Hong Kong Investor Services Limited   B4(f)
                                                 Shops 1712-1716
                                                 17/F, Hopewell Centre
                                                 183 Queen’s Road East
                                                 Wanchai
                                                 Hong Kong

Sole Global Coordinator and Listing Agent ***    Merrill Lynch Far East Limited
                                                 17/F, ICBC Tower
                                                 3 Garden Road, Central
                                                 Hong Kong




                                                 33
                    PARTIES INVOLVED IN THE GLOBAL OFFERING

Joint Bookrunners ************************     Merrill Lynch Far East Limited
                                               17/F, ICBC Tower
                                               3 Garden Road, Central
                                               Hong Kong
                                               Citigroup Global Markets Asia Limited
                                               50/F, Citibank Tower
                                               Citibank Plaza
                                               3 Garden Road, Central
                                               Hong Kong
                                               J.P. Morgan Securities (Asia Pacific) Limited
                                               28/F, Chater House
                                               8 Connaught Road, Central
                                               Hong Kong
Joint Lead Underwriters *******************    Merrill Lynch Far East Limited
                                               17/F, ICBC Tower
                                               3 Garden Road, Central
                                               Hong Kong
                                               Citigroup Global Markets Asia Limited
                                               50/F, Citibank Tower
                                               Citibank Plaza
                                               3 Garden Road, Central
                                               Hong Kong
                                               J.P. Morgan Securities Ltd.
                                               28/F, Chater House
                                               8 Connaught Road, Central
                                               Hong Kong
Joint Financial Advisors *******************   Citigroup Global Markets Asia Limited
                                               50/F, Citibank Tower
                                               Citibank Plaza
                                               3 Garden Road, Central
                                               Hong Kong
                                               Merrill Lynch Far East Limited
                                               17/F, ICBC Tower
                                               3 Garden Road, Central
                                               Hong Kong
Auditors and Reporting Accountants*********    Deloitte Touche Tohmatsu                        B4(e)
                                               26/F, Wing On Centre
                                               111 Connaught Road
                                               Central
                                               Hong Kong
Legal Advisors to the Manager *************    As to Hong Kong and United States law
                                               Baker & McKenzie
                                               14/F, Hutchison House
                                               10 Harcourt Road
                                               Central
                                               Hong Kong

                                               34
                     PARTIES INVOLVED IN THE GLOBAL OFFERING

Legal Advisors to the Sole Global
  Coordinator, the Joint Bookrunners and the
  Joint Lead Underwriters *****************     As to Hong Kong and United States law
                                                Freshfields Bruckhaus Deringer
                                                11/F, Two Exchange Square
                                                Central
                                                Hong Kong
Legal Advisors to the Trustee ***************   As to Hong Kong law
                                                Simmons & Simmons
                                                35/F, Cheung Kong Center
                                                2 Queen’s Road Central
                                                Hong Kong
Tax Advisor to the Manager ****************     PricewaterhouseCoopers Limited
                                                21/F, Edinburgh Tower
                                                15 Queen’s Road
                                                Central
                                                Hong Kong
Independent Property Valuer ***************     Savills Valuation and Professional Services Limited   B4(d)
                                                23/F, Two Exchange Square
                                                Central
                                                Hong Kong
Building Surveyor *************************     Savills Project Consultancy Limited
                                                805-13 CityPlaza One
                                                1111, King’s Road
                                                Taikoo Shing
                                                Hong Kong
Market Consultant ************************      Colliers International (Hong Kong) Limited
                                                Suite 5701, Central Plaza
                                                18 Harbour Road
                                                Wanchai
                                                Hong Kong
Receiving Bankers*************************      The Bank of East Asia, Limited
                                                Hang Seng Bank Limited
                                                The Hongkong and Shanghai Banking Corporation
                                                 Limited
                                                Industrial and Commercial Bank of China (Asia)
                                                 Limited




                                                35
                                              RISK FACTORS

       An investment in the Units involves significant risks. Prospective investors should consider                B3/B21
  carefully, together with all other information contained in this Offering Circular, the risk factors
  described below before deciding to invest in the Units.
       As an investment in a collective investment scheme is meant to produce returns over the long-
  term, investors should not expect to obtain short-term 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
  investment and that they may not receive any distributions.
       Before deciding to invest in the Units, prospective investors should seek professional advice from
  their relevant advisors regarding their prospective investment in the context of their particular
  circumstances.


RISKS RELATING TO CHAMPION REIT’S ORGANIZATION AND OPERATIONS
The level of Annual Distributable Income will be adversely affected if anticipated rental growth rates
do not materialize, due to the ‘‘step-up’’ nature of the interest rate swap arrangements. There is no
assurance that Champion REIT will be able to service the potentially higher cash finance costs during
or after the term of such swaps or to make any distributions to Unitholders.
      Each of the New Property Companies has entered into an interest rate swap agreement. Upfront swap
payments of HK$1,417.0 million in aggregate will be paid by the New Property Companies to the swap
counterparty on the Listing Date in relation to the interest rate swap agreements. In return, the swap
counterparty will pay the New Property Companies on a quarterly basis an aggregate amount equivalent to
the floating rate interest payable in respect of the term loan under the Facility Agreement.
      The interest rate swaps have a ‘‘step-up’’ structure, in that the aggregate amount of the cash finance
costs payable by the New Property Companies increases over the life of the interest rate swaps. The lower
cash finance costs in the early periods of the interest rate swaps are intended to enhance the DPU payable to
Unitholders for such periods. Increases in net property income in later periods of the interest rate swaps will
be required to be used to cover the higher cash finance costs incurred in the later periods of the interest rate
swaps. However, there is no assurance that rental growth and increased net property income in the later
periods will materialize. If Champion REIT does not achieve rental growth and increased net property
income in the later periods of the interest rate swaps, the Annual Distributable Income available to
Unitholders will decrease compared to earlier periods of the interest rate swaps. For further details on the
interest rate swap arrangements, see the section headed ‘‘Certain Factors Affecting Future Results of
Operations and Financial Condition — Change in Nature of Existing Costs — Finance Costs and Interest
Rate Swaps’’ in this Offering Circular.
      After the end of the five-year term of the interest rate swaps, Champion REIT may be exposed to
interest rate fluctuations and higher cash finance costs. There is no assurance that Champion REIT will be
able to service the higher cash finance costs. There is also no assurance as to the level of distributable
income available to be distributed or that Champion REIT will be able to make any distributions to
Unitholders.

Yield enhancement mechanisms, which will have the effect of increasing the DPU, have been put in
place for a limited period of time. When such enhancement mechanisms end, the DPU and/or the
price of the Units may be adversely affected.
     Champion REIT has put in place certain arrangements which will have the effect of increasing the
Annual Distributable Income and the DPU above the level which would otherwise be the case based solely
on the operating results of Champion REIT. These arrangements include: (a) the interest rate swaps, under
which, as a result of the upfront swap payments to the swap counterparty, the fixed interest payable by the

                                                      36
                                              RISK FACTORS

New Property Companies to the swap counterparty during the term of the interest rate swaps is substantially
lower than the prevailing market rates for a hedging arrangement which did not include any upfront swap
payments; and (b) the Distribution Waiver, pursuant to which each of GE Holder (together with Great Eagle
as guarantor), KP Holder (together with Kerry Properties as guarantor) and Wing Tai (together with Great
Eagle as guarantor) has agreed to waive its entitlement to receive any distributions payable (i) for the FY06
Distribution Period with respect to all of the Units it holds as of the Listing Date; (ii) for the FY07
Distribution Periods with respect to 55% of the Units it holds as of the Listing Date; and (iii) for the FY08
Distribution Periods with respect to 20% of the Units it holds as of the Listing Date.

      Such yield enhancement arrangements are designed to enhance the Annual Distributable Income
and/or the DPU to a level which is higher than would otherwise be the case based solely on the operating
results of Champion REIT. These yield enhancement arrangements will only have effect for a limited period
of time. The interest rate swaps will have a yield-enhancing effect for a period of five years from the Listing
Date, such effect diminishing in each year of the five-year period. See the section headed ‘‘Certain Factors
Affecting Future Results of Operations and Financial Condition — Change in Nature of Existing Costs —
Finance Costs and Interest Rate Swaps’’ in this Offering Circular. The Distribution Waiver will enhance the
DPU for the FY06 Distribution Period, FY07 Distribution Periods and FY08 Distribution Periods. When
these yield enhancement arrangements cease to have effect, the Annual Distributable Income, the DPU
and/or the price of the Units may be materially adversely affected.

Champion REIT may have to raise further equity and/or debt to fund stamp duty payment required
in connection with the Property Sale and Purchase Agreements and may be subject to such stamp
duty prior to the actual completion of the sale and purchase of the Property by the New Property
Companies.

      Immediately following the completion of the Reorganization, the Predecessor Property Companies
entered into the Property Sale and Purchase Agreements with the New Property Companies pursuant to
which each New Property Company agreed to acquire the entire portion of the Property owned by the
relevant Predecessor Property Company. The Property Sale and Purchase Agreements are conditional upon
the listing of Champion REIT on the Hong Kong Stock Exchange on or before December 31, 2006. Upon
the Property Sale and Purchase Agreements becoming unconditional, the consideration will be paid by the
New Property Companies to the Predecessor Property Companies on the Listing Date.

      Legal assignment of the relevant portion of the Property will take place on the earlier of: (a) such date
as may be notified by the relevant New Property Company to the relevant Predecessor Property Company by
not less than 14 clear days’ notice in writing; and (b) the 10th anniversary of the date of the relevant
Property Sale and Purchase Agreement.

      Based on tax advice obtained by the Manager from leading counsel, the Property Sale and Purchase
Agreements will not be chargeable with Hong Kong ad valorem stamp duty under the Stamp Duty
Ordinance (Chapter 117 of the Laws of Hong Kong). Currently, such stamp duty will only be payable on the
legal assignment of the Property to the New Property Companies at the then prevailing Hong Kong
ad valorem stamp duty rate, and the amount of such stamp duty is determined on the basis of the higher of
(a) the consideration for the transfer of the Property as stated in the Property Sale and Purchase Agreements;
and (b) the market value of the Property as at the date of the Property Sale and Purchase Agreements.
Although the Manager believes that the consideration as stated in the Property Sale and Purchase
Agreements reflects the market value of the Property as of the date of the Property Sale and Purchase
Agreements, there is no assurance that the stated consideration will be accepted as the value of the Property
on which Hong Kong ad valorem stamp duty is charged. There is also no assurance that taxation legislation
in Hong Kong will not change in a manner so as to require (a) Hong Kong ad valorem stamp duty to be paid
by Champion REIT before the completion of the purchase of the Property by the New Property Companies;
(b) Hong Kong ad valorem stamp duty to be paid on the value of the Property as at the date of the legal

                                                      37
                                             RISK FACTORS

assignment; or (c) Champion REIT to bear all or part of such stamp duty in the event that Champion REIT
disposes of all or part of the Property to a third party purchaser.
      Hong Kong stamp duty payable on the legal assignment of the Property would amount to
approximately HK$850.1 million at the current Hong Kong ad valorem stamp duty rate of 3.75%, based on
the stated consideration in the Property Sale and Purchase Agreements, and would be payable by the
respective New Property Companies (and effectively by Champion REIT since it wholly owns the New
Property Companies) on the legal assignment of the Property to the New Property Companies. No tax
indemnity has been provided with respect to such stamp duty under the Deeds of Tax Covenant. Champion
REIT may not have sufficient cash resources to pay such stamp duty and may therefore have to wholly or
partly fund such payment by raising further equity (which may have a dilutive effect on existing
Unitholders) and/or debt in accordance with the REIT Code and its accounting policies. Assuming that
stamp duty in the amount of HK$850.1 million was to be raised by Champion REIT solely by way of an
equity offering, such amount would constitute approximately 5.4% to 6.2% of the market capitalization of
Champion REIT (based on a range between the Minimum Offer Price and the Maximum Offer Price).
Assuming that stamp duty in the amount of HK$850.1 million was to be raised by Champion REIT solely
by way of debt, this would increase Champion REIT’s overall gearing from approximately 28.8% to 32.2%
as of the Listing Date. In the event that interest rates have increased at the time such amount is required to
be raised, Champion REIT will have to bear the increased costs of such funds. There is no assurance that
Champion REIT will be able to raise additional equity or debt, should that become necessary, on terms
acceptable to it or at all.

The fair value of the Property increased 110.9% in 2005, and the fair value of Champion REIT’s
investment properties may decline or be subject to a high degree of volatility in the future due to
cyclical changes and volatility in the Hong Kong real estate industry.
      Cyclical changes in the Hong Kong real estate industry could result in significant fluctuations in fair
value of investment properties of Champion REIT and Champion REIT’s net profit. Between December 31,
2001 and December 31, 2003, the valuation of the Property as determined by an independent third party
valuer decreased by 14.0%. Fair value of the Property as of December 31, 2005 was HK$22,670.0 million,
following an increase of HK$11,925.3 million for 2005. This represented a 110.9% increase in the fair value
of the Property from December 31, 2004. There is no assurance that fair value of the Property and of any
other investment properties that Champion REIT may acquire in the future will not decline or be subject to a
high degree of volatility.

Distributions to Unitholders of Champion REIT may include return of equity in addition to its
reported net profit after tax.
      Unlike companies incorporated in Hong Kong, which require a court sanction to make distributions by
way of capital reduction, it is possible for Champion REIT to effectively make distributions out of capital
without court sanction. Distributions to Unitholders of Champion REIT may include return of equity in
addition to its reported net profit after tax. The upfront swap payments and the debt front-end fee, totaling
HK$1,453.0 million, are funded by the proceeds of the Global Offering, and will effectively be distributed
to the Unitholders over the concurrent five-year term of the Facility and the interest rate swaps as a partial
return of equity as follows:
                                                  Listing Date to        For the year ending December 31,
                                                 December 31, 2006    2007     2008    2009    2010     2011

Amount of equity effectively returned to
 Unitholders (HK$ millions) ************                186.0         312.0 301.9 284.1 265.2           103.8




                                                     38
                                             RISK FACTORS

      See the section headed ‘‘Certain Factors Affecting Future Results of Operations and Financial
Condition — Change in Nature of Existing Costs — Finance Costs and Interest Rate Swaps’’ in this
Offering Circular.

Champion REIT and the Manager, which are each newly established entities, do not have established
operating histories for investors to rely on in making an investment decision.

      The Manager was incorporated on January 12, 2006 and Champion REIT was established on April 26,
2006. The Property was acquired by Champion REIT on April 26, 2006 from the Vendor Companies
pursuant to the Reorganization. Prior to the Reorganization, the Property was managed by Great Eagle.
Accordingly, neither Champion REIT nor the Manager have operating histories by which their past
performance may be judged and investors may find it difficult to evaluate their business and prospects. In
particular, the historical combined financial information of the Group Companies included in this Offering
Circular may not necessarily reflect Champion REIT’s results of operations, financial condition and cash
flows in the future or what its results of operations, financial condition and cash flows would have been had
it been a separate, stand-alone entity during each of the periods presented. In addition, after the Listing
Date, there will be certain changes to Champion REIT’s cost structure, level of indebtedness and operations.
For example, certain historical costs of the Group Companies will no longer be costs of Champion REIT.
Similarly, there are certain costs, such as the Manager’s, the Property Manager’s and the Trustee’s fees, that
will be costs of Champion REIT going forward that were not costs of the Group Companies historically.
Further, the presentation format of Champion REIT’s financial information may differ from that of the
audited financial information set forth in Appendix I to this Offering Circular. See the section headed
‘‘Certain Factors Affecting Future Results of Operations and Financial Condition’’ in this Offering Circular.
There can be no assurance that the Manager will be able to successfully manage Champion REIT as a REIT
or as a publicly listed entity.

The amount that Champion REIT may borrow is limited and such limit may be exceeded if there is a
downward revaluation of assets.

      Champion REIT is expected to use leverage in connection with its investments. Its borrowings are           7.9
limited by the REIT Code to no more than 45% of its total gross asset value. From time to time Champion
REIT may need to draw down on its banking facilities and use overdrafts but may be unable to do so due to
the 45% borrowing limit. Upon completion of the Global Offering, Champion REIT is expected to have
aggregate external borrowings of HK$7,000 million, or 28.8% of Champion REIT’s total gross asset value
as of the Listing Date (based on the information in the section headed ‘‘Unaudited Pro Forma Balance
Sheet’’ in this Offering Circular). A downward revaluation of assets, including with respect to the Property
and the fair value of the interest rate swaps, or other circumstances may result in a breach of the borrowing
limit under the REIT Code. In the event of such a breach, Champion REIT would not be able to incur
further borrowings. In such circumstances, while Champion REIT may not be required to dispose of its
assets to reduce its indebtedness where such disposal is prejudicial to the interest of the Unitholders, the
Manager must use its best endeavors to reduce excess borrowings, which may constrain its operational
flexibility.

      In addition, a downward revaluation of assets may result in a breach of certain financial covenants
under Champion REIT’s loan agreements. See the sub-section headed ‘‘Champion REIT will depend on
external financing and its ability to pay distributions may be adversely affected by current or future loan
agreements’’ immediately below.




                                                     39
                                               RISK FACTORS

Champion REIT will depend on external financing and its ability to pay distributions may be
adversely affected by current or future loan agreements.

      Champion REIT will be subject to risks normally associated with debt financing.

      Champion REIT’s level of debt and the limitations imposed on it by its current or future loan
agreements could have significant adverse consequences, including, but not limited to, the following: (a) its
cash flows may be insufficient to meet its required principal and interest payments; (b) payments of
principal and interest on borrowings may leave Champion REIT with insufficient cash resources to operate
its properties or pay distributions to Unitholders necessary to maintain its qualification as a REIT; (c) it may
be unable to borrow additional funds as needed or on favorable terms; (d) it may be unable to refinance its
indebtedness at maturity or the refinancing terms may be less favorable than the terms of the original
indebtedness; (e) increases in interest rates could materially increase its finance costs; (f) it may be subject
to certain restrictive covenants, which may limit or otherwise adversely affect Champion REIT’s operations,
such as its ability to incur additional indebtedness, acquire properties, make certain other investments, make
capital expenditures, or make distributions to Unitholders; and (g) it may also be subject to certain
affirmative covenants, which may require it to set aside funds for maintenance or repayment of security
deposits.

      Further, the terms of Champion REIT’s loan agreements may require Champion REIT to maintain
certain financial ratios. Champion REIT’s ability to meet these financial ratios may be affected by events
beyond its control, such as a downward revaluation of assets, and the Manager cannot guarantee that
Champion REIT will always be able to meet these ratios.

     Failure by Champion REIT to meet any payment obligation or to comply with any affirmative
covenant or any financial ratio or violation of any restrictive covenant will constitute an event of default or a
potential event of default which, if not rectified within the applicable cure period, will constitute an event of
default. Champion REIT’s default under any one of its loan agreements may also result in a cross default
under its other loan agreements.

       If an event of default under any of Champion REIT’s loan agreements occurs, the lenders will be
entitled to accelerate payment of all or any part of the indebtedness owing under the relevant loan agreement
and to enforce all or any of the security held by the lenders for such indebtedness, the Property Companies
and the Finance Company will be prohibited from declaring and making any dividend payments to
Champion REIT or repaying any advances made to them by Champion REIT or paying interest on such
advances and Champion REIT will be prohibited from making any distribution to its Unitholders.

      The Property will be mortgaged on the Listing Date to secure repayment of the indebtedness of
Champion REIT under its existing loan agreements. If an event of default occurs, the Property could be
foreclosed and sold by the lenders. Furthermore, the mortgage will contain negative covenants limiting,
among other things, Champion REIT’s ability to sell, pledge, lease or otherwise dispose of all or any part of
the Property, or to create any further mortgage, charge or pledge over all or any part of the Property, assets,
rights or revenues of Champion REIT, without the prior written consent of the security trustee/agent in
respect of the Facility. These negative covenants with respect to the Property could prevent the Manager
from operating the Property in the manner it desires, which could in turn affect Champion REIT’s results of
operations. The procedures required for releasing a mortgage may take an extended period of time, which
may result in delays or otherwise adversely affect its ability to obtain new debt arrangements on attractive
terms or to dispose of the Property.

      If any one of these events was to occur, Champion REIT’s financial condition, results of operations,
cash flow, cash available for distributions to Unitholders, per Unit trading price, and its ability to satisfy its
debt service obligations could be materially adversely affected.

                                                       40
                                              RISK FACTORS

Champion REIT’s growth depends on external sources of capital which are outside of its control.

      Under the Trust Deed, Champion REIT is required to distribute at least 90% of Annual Distributable
Income. Because of this distribution requirement, it may not be able to fund future capital needs, including
any necessary acquisition financing, from its operating cash flows. Consequently, it may need to rely on
external sources of funding to expand its portfolio, which may not be available on favorable terms or at all.
If Champion REIT cannot obtain capital from external sources, it may not be able to acquire properties
when strategic opportunities exist, satisfy its debt service obligations or make the cash distributions to the
Unitholders necessary to maintain its qualification as a REIT.

Champion REIT depends on certain key personnel, and the loss of any key personnel may adversely
affect its business, financial condition and results of operations.

      Champion REIT’s success depends, in part, upon the continued service and performance of the
Manager’s key executive officers, Mr. Jeremy Bellinger Stewardson, Mr. Kwong Chi Kwong, Mr. Patrick
Choo Chong Yao, Ms. Rosana Sung Kar Wai and certain other key senior personnel. These persons may
leave the Manager in the future, and may also thereafter compete with the Manager and Champion REIT.
The loss of any of these individuals could have a material adverse effect on Champion REIT’s business,
financial condition and results of operations. Further, in so far as certain of these individuals are designated
as responsible officers of the Manager for the purposes of the Manager’s licensing by the SFC to conduct
the regulated activity of asset management, the loss of one or more of such individuals may affect the
Manager’s ability to continue to satisfy the licensing requirement on the Manager to have a minimum
number of responsible officers, which in turn could affect the Manager’s eligibility to continue as the
manager of Champion REIT and Champion REIT’s continued authorization by the SFC.

There are potential conflicts of interests between Champion REIT, the Manager, the Property                        8.3(a)
Manager, the DMC Manager, the DMC Sub-manager and Great Eagle. Affiliates of the Manager
manage real estate assets in Hong Kong and may in the future manage other REITs.

       Upon completion of the Global Offering, assuming the Over-allotment Option is not exercised, Great
Eagle will beneficially own, directly or indirectly, approximately 49.2% of the Units then in issue. In
addition, the Manager, the Property Manager, the DMC Manager and the DMC Sub-manager are each a
wholly-owned subsidiary of Great Eagle and two members of the board of directors of the Manager are
directors of Great Eagle and/or its affiliated companies. Champion REIT has put in place various procedures
and other measures to address potential conflicts of interests and the REIT Code also contains provisions
regulating connected party transactions (as described in the sections headed ‘‘The Manager —
Independence of Directors’’, ‘‘Corporate Governance — Conflicts of Interests and Business Competition
with Great Eagle’’, ‘‘Connected Party Transactions — Waivers for Certain Connected Party Transactions
between Champion REIT Group, the Great Eagle Connected Persons Group and/or the SFK Connected
Persons Group’’, ‘‘Connected Party Transactions — Role of the Audit Committee for Connected Party
Transactions’’ and ‘‘Connected Party Transactions’’ generally in this Offering Circular). However, subject to
Champion REIT’s Trust Deed, the REIT Code and other applicable laws and regulations, Great Eagle will
have the ability to exercise its rights as a Unitholder in respect of the affairs of Champion REIT (insofar as
such matters are subject to a vote by the Unitholders and Great Eagle is not required to abstain from voting),
including in relation to the approval of significant corporate transactions, such as asset acquisitions or
disposals. The two non-executive directors of the Manager who are also directors of Great Eagle and/or its
affiliated companies may from time to time be placed in a conflict of interests position with regard to their
involvement in both the business, policies and other affairs of Champion REIT and those of Great Eagle
and/or its relevant affiliated companies, although they are required to disclose any conflicts of interests and
to abstain from voting with respect to these conflicts of interests. There can be no assurance that conflicts of
interests will not arise between Champion REIT, the Manager, the Property Manager, the DMC Manager,
the DMC Sub-manager and Great Eagle.

                                                      41
                                              RISK FACTORS

      Great Eagle, its subsidiaries and associates are engaged in, and/or may engage in, amongst other
things, investment in, and the development and management of, properties in the office, retail, residential
and hotel sectors in Hong Kong and elsewhere and portfolio management. Affiliates of the Manager,
including Great Eagle, invest in and manage real estate assets in Hong Kong and may in the future sponsor
and/or manage other REITs that may compete directly with Champion REIT. As a result, there may be
circumstances where Champion REIT competes directly with Great Eagle and/or its subsidiaries or
associates for acquisitions or disposals of properties as well as for tenants within the Hong Kong market.
There are no non-compete agreements between Great Eagle and Champion REIT. In addition, under the
deeds relating to the Distribution Waiver and the DPU guarantee, the Manager has undertaken to the
Relevant Holders that it shall not effect, without the prior written consent of the Relevant Holders during the
FY06 Distribution Period, the FY07 Distribution Periods and the FY08 Distribution Periods, any sale or
disposal of any of the real estate held by Champion REIT.

     Great Eagle may also in the future invest in other REITs which may compete directly with Champion
REIT. Further, as of December 31, 2005, 30,517 sq. ft. of retail space and 1,853 sq. ft. of office space in the
Property have been leased to wholly-owned subsidiaries of Great Eagle, for use as a fitness center and spa
and the building management office, respectively, representing in aggregate 2.8% of total Gross Rentable
Area of the Property and 1.8% of total Rental Income generated by the Property for the month ended
February 28, 2006. With respect to such tenancies, Champion REIT will be required to comply with the
procedures described in the section headed ‘‘Connected Party Transactions — Waivers for Certain
Connected Party Transactions between Champion REIT Group, the Great Eagle Connected Persons Group
and/or the SFK Connected Persons Group’’ in this Offering Circular.

     There can be no assurance that the interests of Champion REIT will not conflict with those of Great
Eagle in such circumstances. Potential investors should note that Great Eagle may exercise its rights as a
Unitholder or otherwise in a manner that may conflict with the best interests of Champion REIT’s other
Unitholders.

Champion REIT’s success depends on the ability of the Manager, the DMC Manager, the DMC Sub-
manager and the Property Manager, which are all wholly-owned subsidiaries of Great Eagle, to
operate and manage the Property and their failure to operate and manage the Property in an efficient
or effective manner could have a material adverse effect on the value of the Property and Champion
REIT’s results of operations and ability to make distributions.

    Champion REIT depends on the Manager to manage its operations and its real estate assets. The
Manager has no operating history.

      In turn, the Manager depends on the DMC Manager and the DMC Sub-manager for, among other
matters, the maintenance and management of the common areas, common facilities and public structures of
Citibank Plaza, and on the Property Manager, pursuant to the Property Management Agreement, for
property management, lease management and marketing services.

      Under the DMC relating to Citibank Plaza, the DMC Manager, which is a wholly-owned subsidiary of
Great Eagle and which has sub-contracted its responsibilities to the DMC Sub-manager (which is also a
wholly-owned subsidiary of Great Eagle), is responsible for, among other matters, the maintenance, repair
and upkeep of common areas, common facilities and public structures, the operation of the various building
services systems such as the air-conditioning system, electrical and mechanical systems and the fire services
system, the maintenance of building security and refuse collection and disposal. It is also empowered to do
all things which it in its discretion deems necessary or desirable for the purposes of maintaining and
improving all facilities and services in or on the lot or the buildings for the better enjoyment or use of the
buildings by the owners and their respective agents, tenants and licensees. See the section headed ‘‘The
DMC Manager’’ in this Offering Circular.

                                                      42
                                             RISK FACTORS

      Under the Property Management Agreement, the Manager has appointed the Property Manager to
manage, supervise, maintain and market the Property for the benefit of the New Property Companies. The
Property Manager is responsible, subject to the overall management and supervision of the Manager, for all
property level accounting, lease management and administration, rent collection, property marketing,
insurance procurement, building safety, maintenance and repairs for the Property, management and
supervision of fitting out works carried out by tenants, contract management and financial management
matters, including preparation of the annual budget and tracking of expenditures. See the section headed
‘‘The Property Manager’’ in this Offering Circular.

     Although the appointment of the Property Manager may be terminated by Champion REIT for
underperformance pursuant to the Property Management Agreement, the failure of the Property Manager,
the DMC Manager or the DMC Sub-manager to manage the Property will adversely affect the underlying
value of the Property and Champion REIT’s results of operations and ability to make distributions to
Unitholders and pay amounts due on its indebtedness. In addition, any adverse changes in Champion
REIT’s relationship with the Manager, or the Manager’s relationship with the Property Manager, the DMC
Manager or the DMC Sub-manager, could hinder their respective abilities to manage Champion REIT’s
operations and its portfolio of real estate assets.

      Further, if the Property Management Agreement is terminated or the services of the DMC Manager or
the DMC Sub-manager are terminated, the New Property Companies could face a substantial disruption to
their operations and an increase in costs incurred for the management of the Property and for certain
corporate and administrative services. The New Property Companies would also lose the benefit of the
extensive expertise and experience of the Great Eagle Group, of which the Property Manager, the DMC
Manager and the DMC Sub-manager are members, in managing and operating properties. The Manager’s
operations could also suffer if Great Eagle sold its shareholding in the Manager, the Property Manager, the
DMC Manager or the DMC Sub-manager and/or discontinued its involvement in such entities’ affairs. In
this regard, investors should note that there is no restriction on Great Eagle selling all or any of its
shareholding in the Manager, the Property Manager, the DMC Manager or the DMC Sub-manager.

Champion REIT is exposed to the risk that its swap counterparty will not perform its obligations
under interest rate swap arrangements.

      Each of the New Property Companies has entered into an interest rate swap agreement with an affiliate
of Merrill Lynch Far East Limited, the Sole Global Coordinator, with a guarantee by Merrill Lynch &
Co., Inc. (rated ‘‘Aa3’’ by Moody’s Investors Service). Upfront swap payments of HK$1,417.0 million in
aggregate will be paid by the New Property Companies to the swap counterparty on the Listing Date in
relation to the interest rate swap agreements. In return, the swap counterparty will pay the New Property
Companies on a quarterly basis an aggregate amount equivalent to the floating rate interest payable in
respect of the term loan under the Facility Agreement. Champion REIT, through the New Property
Companies, is exposed to the risk that the counterparty and its guarantor will not perform their respective
obligations under the interest rate swap agreements. Such counterparty and its guarantor may default on
their respective obligations to Champion REIT due to bankruptcy, lack of liquidity, operational failure or
other reasons. In addition, the counterparty and its guarantor may fail to honor their respective obligations
under the interest rate swap agreements, the agreements may not be effective in reducing Champion REIT’s
exposure to interest rate changes and a court could rule that such agreements are not legally enforceable. In
these circumstances, Champion REIT may not generate any Annual Distributable Income or have sufficient
cash resources to make any distributions.




                                                     43
                                              RISK FACTORS

A downturn in the business of Champion REIT’s tenants could reduce its Rental Income and have a
material adverse effect on its financial condition, results of operations and future levels of
distributions.
      If a tenant experiences a downturn in its business or other types of financial distress, such as
bankruptcy or insolvency, it may be unable to make timely rental payments. Champion REIT’s claims for
unpaid rent against a bankrupt tenant may not be paid in full. In addition, Champion REIT would incur time
and expense relating to any eviction proceedings and would be unable to collect rent during such
proceedings. Further, if its tenants decide not to renew their tenancies or terminate early (in cases where a
tenant has termination rights exercisable by notice), it may not be able to re-let the space. Even if tenants
decide to renew or lease new space, the terms of renewals or new tenancies, including the cost of required
renovations or concessions to tenants, may be less favorable to Champion REIT than current lease terms. As
a result of these events, Champion REIT’s cash flows could decrease and it may not be able to make
distributions to Unitholders. Although the Group Companies have not experienced any write-offs or
provisions for unpaid rents in the three years ended December 31, 2005, there is no assurance that there will
not be delinquencies in future periods.

The loss of key tenants could reduce Champion REIT’s Rental Income and have an adverse effect on
its financial condition and results of operations.
      Champion REIT depends on a number of major tenants. For the month ended February 28, 2006, the
10 largest tenants of the Property in terms of Rental Income represented approximately 69.2% of the total
Rental Income generated by the Property. The two largest tenants for the month ended February 28, 2006,
Citibank, N.A. and Merrill Lynch (Asia Pacific) Limited, accounted in the aggregate for approximately
39.5% of the total Rental Income of the Property. These major tenants may experience a downturn in their
business, which may weaken their financial conditions and result in their failure to make timely rental
payments or a default by them under their tenancies. The tenants may also fail to renew their tenancies for
other reasons. In addition, two of Champion REIT’s 10 largest tenants have a right to terminate their
tenancies early. The Hongkong and Shanghai Banking Corporation Limited has a right to terminate its
tenancy with six months’ notice given on or after September 1, 2007 and The Financial Secretary
Incorporated has a right under certain conditions to terminate its tenancy with nine months’ notice given on
or after January 17, 2007 with respect to a portion of its leased area. The portion of these tenancies subject
to early termination represent in aggregate 5.1% of the total Gross Rentable Area of the Property and the
portion of all tenancies subject to early termination as of February 28, 2006 (eight in total) represent in
aggregate 6.4% of the total Gross Rentable Area of the Property. If any key tenant defaults, terminates its
tenancy, fails to make timely rental payments, or fails to renew its tenancy, Champion REIT may experience
delays in enforcing its rights as landlord, may incur substantial costs in protecting its investment and may be
unable to re-let the space.

A majority of the Property’s tenancies are for, or subject to rent reviews within, periods of up to three
years and Champion REIT may be unable to renew tenancies, lease vacant space or re-lease space as
tenancies expire at the same or higher rents or at all.
      A majority of the tenancies for the Property are for periods of three years or less or subject to rent
reviews within such periods, which reflects the general practice in the Hong Kong office and retail property
market for tenancies. As a result, the Property experiences lease cycles in which a significant number of the
tenancies expire each year. This frequency of renewals makes Champion REIT susceptible to rental market
fluctuations. The tenancy renewal rates by expired leased area for office tenancies were 56.2% in 2003,
56.6% in 2004 and 50.1% in 2005. As of February 28, 2006, tenancies representing 7.2% and 18.9% of the
total Gross Rentable Area of the Property were scheduled to expire in the 10 months ending December 31,
2006 and in 2007, respectively, and 13.4% of the total Gross Rentable Area of the Property was vacant and
available to be leased. There are no tenancies scheduled for rent review in 2006 and as of February 28,

                                                      44
                                              RISK FACTORS

2006, tenancies comprising 29.5% of the Gross Rentable Area of the Property were scheduled for rent
review in 2007.

      Champion REIT may not be able to secure replacement tenants at rent rates equal to or higher than
those of the expiring tenancies, may not be able to secure replacement tenants in time so as to minimize
periods in between tenancies and may not be able to obtain rental rates equal to or above the current rental
rates for tenancies subject to rent review. If the rental rates for the Property decrease, Champion REIT’s
existing tenants do not renew their tenancies or Champion REIT does not or is unable to re-lease a
significant portion of its vacant space and space for which tenancies are scheduled to expire, Champion
REIT’s financial condition, results of operations, cash flows, per Unit trading price, and ability to satisfy its
debt service obligations could be materially adversely affected.

Champion REIT faces significant competition.

      The office property market in Hong Kong is highly competitive. Champion REIT competes for tenants
with numerous developers, owners and operators of office properties, many of which own properties similar
to or which compete with those of Champion REIT. In addition, Colliers anticipates significant new supply
outside the Central District to come onto the market between 2007 and 2008, which will also result in
additional competition for tenants. This new supply includes Millennium City 6 at Kwun Tong Road,
16 Westlands Road in Quarry Bay, International Commerce Centre in West Kowloon and NKIL 6268 at
Kowloon Bay. In addition, Colliers expects York House in the Central District to come onto the market in
2006. Historically, between 2003 and 2005 the vacancy rates for office space of the Property were higher
than the average vacancy rates of Grade A office space in the Central District. The annual average vacancy
of office space at the Property was 14.8% in 2003, 22.0% in 2004 and 13.7% in 2005. The average vacancy
of Grade A office space in the Central District was 15.2% in 2003 and 10.8% in 2004, based on data from
the Rating and Valuation Department of the HKSAR Government, and 5% in December 2005 (and therefore
not directly comparable to annual average vacancy), based on an internal survey undertaken by Colliers.
Champion REIT will also compete with other property companies in Hong Kong for property acquisitions
and property-related investments. An inability to compete effectively could reduce Champion REIT’s Rental
Income and thus adversely affect Champion REIT’s business, financial condition and results of operations.

Failure by Great Eagle to fulfill its obligations under its DPU guarantee or failure by Great Eagle,
Kerry Properties or Wing Tai to fulfill their obligations under certain distribution top-up payment
obligations may have a material adverse effect on the amount of DPU for 2006, 2007 and 2008, and
there is no assurance that the DPU for future periods after the DPU guarantee and the Distribution
Waiver cease will not decrease.

     GE Holder (together with Great Eagle as guarantor) has entered into a deed of guarantee to guarantee
the DPU of Champion REIT for the FY06 Distribution Period. See the section headed ‘‘Material
Agreements and Other Documents Relating to Champion REIT — DPU Guarantee Deed’’ in this Offering
Circular.

      In addition, each of GE Holder (together with Great Eagle as guarantor), KP Holder (together with
Kerry Properties as guarantor) and Wing Tai (together with Great Eagle as guarantor) has entered into a
deed with the Trustee and the Manager pursuant to which each has agreed to waive its entitlement to receive
any distributions payable (a) for the FY06 Distribution Period with respect to all of the Units it holds as of
the Listing Date; (b) for the FY07 Distribution Periods with respect to 55% of the Units it holds as of the
Listing Date; and (c) for the FY08 Distribution Periods with respect to 20% of the Units it holds as of the
Listing Date. Each such portion of the distributions waived will be available for distribution to holders of
Units with respect to which distributions have not been waived, thereby enhancing the DPU for such
periods. There is no assurance that the DPU for future periods will not decrease.

                                                       45
                                              RISK FACTORS

       Each of GE Holder (together with Great Eagle as guarantor), KP Holder (together with Kerry
Properties as guarantor) and Wing Tai (together with Great Eagle as guarantor) has further agreed with
respect to itself that if it holds less than the number of Units in respect of which the Distribution Waiver
applies as of the relevant Record Dates for distributions payable in respect of the FY06 Distribution Period,
the FY07 Distribution Periods and the FY08 Distribution Periods, as the case may be, it will make a cash
contribution to Champion REIT to make up the shortfall so as to place the other Unitholders in a position
that is no worse than if it had not so reduced its holdings. See the section headed ‘‘Material Agreements and
Other Documents Relating to Champion REIT — Distribution Entitlement Waiver Deed’’ in this Offering
Circular.

      Failure by any of these parties to fulfill their obligations described above could have a material adverse
effect on the amount of DPU for 2006, 2007 and 2008. The obligation of GE Holder under the deed of
guarantee also assumes the payment of any applicable distribution waiver top-up by GE Holder, KP Holder
and Wing Tai, or their respective guarantors, under the deed relating to the Distribution Waiver, and
therefore, failure by such parties to fulfill their obligations to pay any applicable distribution waiver top-up
could also affect the DPU amount payable for the FY06 Distribution Period.

      In addition, under bankruptcy laws, fraudulent transfer laws, insolvency or unfair preference or similar
laws in Hong Kong, a guarantee or distribution waiver and top-up payment obligation could be declared
void if, among other things, the guarantor or promisor, at the time it gives its guarantee or promise, did so
with the intent to defraud creditors or was influenced by a desire to put the beneficiary of the guarantee or
distribution waiver and top-up payment obligation in a position which, in the event of the guarantor’s or the
promisor’s insolvency, would be better than the position the beneficiary would have been in had the
guarantee or distribution waiver and top-up payment obligation not been given. Although the Manager does
not have any reason to believe that the guarantee or the distribution waiver and top-up payment obligation
will be declared void or unenforceable for any of the foregoing reasons, if a court declares the performance
guarantee or distribution waiver and top-up payment obligation to be void, or holds that the guarantee or the
distribution waiver and top-up payment obligation is unenforceable for any other reason, Champion REIT
would cease to have a claim against GE Holder, Great Eagle, KP Holder, Kerry Properties or Wing Tai, as
the case may be, based upon the guarantee or distribution waiver and top-up payment obligation. In
addition, there is no guarantee of the DPU for distribution periods after 2006 and there is no assurance that
the DPU for distribution periods after 2006 will not decrease.

RISKS RELATING TO THE PROPERTY                                                                                     B2(e)/
                                                                                                                   B20(a)/
Champion REIT’s Property is at one location at 3 Garden Road, Central, in Hong Kong and
                                                                                                                   B20(b)
Champion REIT presently relies on the Property for all of its net property income.

      Champion REIT currently depends only on the Property at Citibank Plaza at 3 Garden Road, Central,
in Hong Kong for all of its net property income. This concentration may entail a higher level of risk as
compared to some other REITs that have properties spread over several different locations or have a more
diverse range of investments. Any circumstance which adversely affects the operations or business of
Citibank Plaza, or its attractiveness to tenants, may affect the Property, and Champion REIT will not have
income from other properties to mitigate any ensuing loss arising from such circumstance. A concentration
of investments in a single development will cause Champion REIT to be highly susceptible to a downturn in
the Grade A office market in the Central District in Hong Kong. Physical damage or destruction to Citibank
Plaza resulting from fire, terrorism or other causes could lead to significant disruption of the business and
operations of Champion REIT.




                                                      46
                                              RISK FACTORS

Champion REIT relies on tenants in the banking, finance and securities sectors for a substantial
majority of its Rental Income.
      For the month ended February 28, 2006, approximately 59.5% of Champion REIT’s Rental Income
for office tenancies was attributable to tenants in the banking sector, a further 14.4% of Rental Income for
office tenancies was attributable to tenants in the finance sector and a further 6.8% of Rental Income for
office tenancies was attributable to tenants in the securities sector. These sectors tend to be cyclical. A
prolonged decline in any of these sectors in Hong Kong would affect the Property’s ability to attract and
maintain tenants from the banking sector, and the departure of any of the major tenants for any reason could
materially reduce Champion REIT’s Rental Income and have a material adverse effect on Champion REIT’s
business, financial condition and results of operations.

The appraisal of the Property is based on various assumptions and the price at which Champion
REIT is able to sell the Property may be different from the Appraised Value or the initial acquisition
price of the Property.
      The valuation of the Property prepared by Savills, the Independent Property Valuer, is contained in
Appendix V to this Offering Circular. In conducting its valuation, the Independent Property Valuer used
principally the income capitalization approach, counter checked by the direct comparison approach. The
valuation was based on certain assumptions, which, by their nature, are subjective and uncertain and may
differ materially from actual measures of the market. In addition, property valuations generally, and the
valuation conducted by the Independent Property Valuer in particular, include a subjective determination of
certain factors relating to the Property, such as its relative market position, financial and competitive
strengths, location, and physical condition. Accordingly, there can be no assurance that the assumptions are
accurate measures of the market or that the Property was valued accurately. Further, the appraised value of a
property is not an indication of, and does not guarantee, a sale price at that value at present or in the future.
The price at which Champion REIT may sell the Property or any portion thereof may be lower than the
Appraised Value or the initial acquisition price of the Property.

The due diligence exercise on buildings and equipment may not have identified all material defects,                 B2(f)
breaches of laws and regulations and other deficiencies.
      In connection with the Reorganization, due diligence reviews, surveys and inspections in connection
with Citibank Plaza and the Property were conducted by Savills Project Consultancy Limited, an
independent building surveyor. A letter from Savills Project Consultancy Limited in relation to its building
survey report is set out in Appendix VII to this Offering Circular. Nevertheless, the due diligence process
with respect to the physical condition of Citibank Plaza and the Property has been limited to (a) a building
condition survey of Citibank Plaza in January 2006 in order to confirm the structural integrity of Citibank
Plaza and to identify any existing defects; (b) a review of the current building layouts and usage against the
latest approved building plans to identify any unauthorized building works; (c) a review of existing or
potential hazards in respect of general building health and safety; (d) an inspection of all main electrical and
mechanical plans and systems including air-conditioning, fire services, plumbing and drainage so as to
identify any deficiencies or apparent defects; and (e) an evaluation of the reliability of the information
provided to Savills Project Consultancy Limited for the purposes of its review. There can be no assurance
that such reviews, surveys or inspections (or the relevant review, survey or inspection reports on which
Champion REIT, the Manager and the Underwriters have relied) would have revealed all defects or
deficiencies affecting the Property. In particular, there can be no assurance as to the absence of (a) latent or
undiscovered defects or deficiencies; or (b) inaccuracies or deficiencies in such reviews, surveys or
inspection reports, any of which could have a material adverse impact on Champion REIT’s business,
financial condition and results of operations.




                                                       47
                                               RISK FACTORS

As the Property Sale and Purchase Agreements were entered into on April 26, 2006 and full payment
under such agreements will be made on the Listing Date, which is less than 30 days after the
execution of the Property Sale and Purchase Agreements, Champion REIT will not be able to confirm
whether there will be any other option, right of first refusal, encumbrance or sale and purchase
agreement until after full payment has been made.
      The Property Sale and Purchase Agreements were entered into on April 26, 2006 and full payment
under such agreements will be made on the Listing Date. Under Section 5 of the Land Registration
Ordinance (Chapter 128 of the Laws of Hong Kong), if a document for the transfer of property is registered
within one month after its execution, it will take priority from its date. However, if the document is not
registered within one month after the date of its execution, it will only take priority from the date of
registration. The Property Sale and Purchase Agreements will be submitted to the Land Registry for
registration within one month from the date of their execution. As a result, the priority of the Property Sale
and Purchase Agreements will date back to the date of their execution, which was on April 26, 2006, unless
another buyer were to submit a sale and purchase agreement of any part of the Property dated earlier than
the date of the Property Sale and Purchase Agreements for registration within 30 days after the execution of
that agreement. Although the Vendor Companies have, by way of the Reorganization Agreements,
confirmed that the Predecessor Property Companies have not granted any option, right of first refusal or
entered into any agreement to sell or create any other encumbrance on the Property (other than the
encumbrance which will be released on the Listing Date), the Manager will not be able to confirm that the
Property is not subject to any option, right of first refusal, other encumbrance or sale and purchase
agreement until one month after the date of the Property Sale and Purchase Agreements (i.e. May 26, 2006).

Any occurrence or recurrence of severe acute respiratory syndrome, or SARS, avian influenza or
other widespread public health problems could adversely affect Champion REIT’s business, financial
condition and results of operations.
      In 2003, there was an outbreak of SARS in Hong Kong, other Asian countries and Canada. The SARS
outbreak had a significant adverse impact on the economies of many of the countries affected. During the
outbreak of SARS in early 2003, certain segments of the office market in Hong Kong experienced declining
average occupancy rates and rental rates. Recently, there have been media reports regarding the spread of
the H5N1 virus or avian influenza among birds and in particular poultry, as well as some isolated cases in
countries outside Hong Kong of transmission of the virus to humans. There can be no assurance that there
will not be a serious outbreak of a contagious disease in Hong Kong in the future. A renewed outbreak of
SARS, pandemic avian influenza or other widespread public health problems in Hong Kong could have a
material adverse effect on the Hong Kong economy and its property market generally, and on Champion
REIT’s business, financial condition and results of operations.

RISKS RELATING TO INVESTING IN REAL ESTATE                                                                           B2(e)
                                                                                                                     B20(a)/
There are general risks attached to investments in real estate.
                                                                                                                     B20(b)
       Investments in real estate are subject to various risks, including, but not limited to, (a) adverse changes
in political or economic conditions; (b) adverse local market conditions; (c) the financial condition of
tenants and buyers and sellers of properties; (d) changes in availability of debt or equity financing, which
may result in an inability by Champion REIT to finance future acquisitions on favorable terms or at all;
(e) changes in interest rates and other operating expenses; (f) changes in environmental laws and
regulations, zoning laws and other governmental rules and fiscal policies; (g) environmental claims arising
in respect of real estate; (h) changes in market rents; (i) changes in energy prices; (j) 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; (k) competition among property owners for tenants which
may lead to vacancies or an inability to rent space on favorable terms; (l) inability to renew tenancies or
re-let space as existing tenancies expire; (m) inability to collect rents from tenants on a timely basis or at all

                                                       48
                                               RISK FACTORS

due to bankruptcy or insolvency of tenants or otherwise; (n) insufficiency of insurance coverage or increases
in insurance premiums; (o) increases in the rate of inflation; (p) inability of the portfolio manager to provide
or procure the provision of adequate maintenance and other services; (q) defects affecting the portfolio
properties which need to be rectified, or other required repair and maintenance of the portfolio properties,
leading to unforeseen capital expenditure; (r) unapproved uses of the portfolio properties which may result
in the relevant Property Company being in breach of the terms and conditions in the relevant Government
Grant, which may give rise to the right on the part of the Government to terminate the Government Grant
and re-enter the property; (s) the relative illiquidity of real estate investments; (t) considerable dependence
on cash flows for the maintenance of, and improvements to, the portfolio properties; (u) increased operating
costs, including real estate taxes; (v) any interest and encumbrance that cannot be or has not been revealed
by a land search conducted at the Land Registry at the time of the search; (w) fire or other damage to the
properties; and (x) acts of God, uninsurable losses and other factors.
      Many of these factors may cause fluctuations in occupancy rates, rental rates or operating expenses,
causing a materially negative effect on the value of real estate and income derived from real estate. The
annual valuation of the Property will reflect such factors and as a result, such valuation may fluctuate
significantly upwards or downwards. The capital value of Champion REIT’s real estate assets may be
significantly diminished in the event of a sudden downturn in real estate market prices or the economy in
Hong Kong.

Champion REIT is exposed to cyclicality and volatility in the overall Grade A office rental property                 B20(a)/
market in Hong Kong.                                                                                                 B20(b)

      Property values and rental rates, including for Grade A office properties in Hong Kong, are cyclical in
nature. Historically, the office rental property market in Hong Kong has been volatile and has experienced
significant price fluctuations. Rental rates for office space declined significantly in 1991 and 1992 when
substantial amounts of new office space become available. Rental rates and property values for office space
peaked in 1994, decreased sharply towards the end of 1995 and early 1996 and increased again in the later
part of 1996 and the first half of 1997. As a result of the Asian economic crisis, volatile interest rates, a
general decline in business activity in Asia and decreased consumer confidence, the Hong Kong economy
and property market was adversely affected, resulting in significantly lower rents from the latter half of
1997 through 1999. Rental rates increased sharply again in 2000 during the internet/technology sector
boom, and declined again from 2001 through 2003. The market was also adversely affected by SARS in
2003. The office market began its latest recovery in 2004, which continued throughout 2005. Hong Kong
property values and rental rates have been affected by, among other factors, supply and demand dynamics,
the rate of economic growth in Hong Kong, interest rates, inflation and political and economic
developments in Hong Kong and the PRC. There is no assurance that rental rates and property values will
not decline sharply again or will not experience a high degree of volatility in the future.

Continuing expansion of rental gap between the Central District and non-core business districts may                  B20(a)
accelerate relocation of certain tenants out of the Central District, which may impact rental yields
and property values in the Central District.
      In the last property downturn in Hong Kong from 2001 to 2003, the rental gap between the Central
District and non-Central districts narrowed significantly. Many tenants took advantage of the phenomenon
and relocated from non-Central districts to the Central District. However, as the rental gap between the
Central District and non-Central business districts increased sharply in late 2004 and 2005, many tenants
relocated part or all of their operations out of the Central District to other non-core business districts such as
North Point on Hong Kong Island and the Hung Hom District of Kowloon. Although the Manager believes
that there is continued healthy demand for office space in the Central District primarily from the financial
services sector and the overall supply situation is tight, a continuation or escalation of the re-location trend
may limit the rental growth in the Central District in a rising market and may result in a sharper rental

                                                       49
                                              RISK FACTORS

decline in the Central District in a declining market. This may materially impact the rental yield and capital
value of the Property, thereby affecting the overall performance of Champion REIT.

Champion REIT may be adversely affected by the illiquidity of property investments.

       Champion REIT invests in office and retail real property, which entails a higher level of risk than a
portfolio which has a diverse range of investments. Property investments, particularly investments in high
value properties such as those in which Champion REIT intends to invest, are relatively illiquid. Such
illiquidity may affect Champion REIT’s ability to vary its investment portfolio or liquidate part of its assets
in response to changes in economic, property market or other conditions. For example, Champion REIT
may be unable to liquidate its assets on short notice or may be forced to agree to a substantial reduction in
the price that may otherwise be sought for such assets, to ensure a quick sale. In addition, Champion REIT,
the Finance Company and the Property Companies may face difficulties in securing timely and
commercially favorable financing in asset-based lending transactions secured by real property due to the
illiquid nature of real property assets. These factors could have an adverse effect on Champion REIT’s
business, financial condition and results of operations, with a consequential adverse effect on Champion
REIT’s ability to make expected distributions to Unitholders.

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

      The Property could suffer physical damage caused by fire or other causes and Champion REIT or the
relevant Property Company may suffer public liability claims, resulting in losses (including loss of rent)
which may not be fully compensated for by insurance proceeds. In addition, there are other types of losses,
such as those resulting from war, terrorism, nuclear contamination and earthquakes, for which Champion
REIT cannot obtain insurance at a reasonable cost or at all. Should an uninsured loss or a loss in excess of
insured limits occur, Champion REIT or the relevant Property Company could be required to pay
compensation and/or lose the capital invested in the affected property as well as anticipated future revenue
from that property. Nonetheless, Champion REIT or the relevant Property Company would remain liable for
any debt or other financial obligation related to that property. It is also possible that third party insurance
carriers will not be able to maintain reinsurance sufficient to cover any losses that may be incurred. Any
material uninsured loss could materially adversely affect Champion REIT’s business, financial condition
and results of operations.

      In addition, Champion REIT will have to renew its insurance policies every year and negotiate
acceptable terms for coverage, exposing it to the volatility of the insurance markets, including the possibility
of rate increases for premiums. The Manager will regularly monitor the state of the insurance market, but it
cannot anticipate what coverage will be available on commercially reasonable terms in future policy years.
Any material increase in insurance rates or decrease in available coverage in the future could adversely
affect Champion REIT’s business, financial condition and results of operations.

The Property or a part thereof may be acquired compulsorily and there is a risk that its Government
lease may not be renewed at the end of its term.

      The Government has the power to acquire compulsorily any land in Hong Kong pursuant to the
provisions of applicable legislation including the Lands Resumption Ordinance (Chapter 124 of the Laws of
Hong Kong), Roads (Works, Use and Compensation) Ordinance (Chapter 370 of the Laws of Hong Kong),
Railways Ordinance (Chapter 519 of the Laws of Hong Kong), Land Acquisition (Possessory Title)
Ordinance (Chapter 130 of the Laws of Hong Kong), Land Drainage Ordinance (Chapter 446 of the Laws of
Hong Kong), Urban Renewal Authority Ordinance (Chapter 563 of the Laws of Hong Kong) and Mass
Transit Railway (Land Resumption and Related Provisions) Ordinance (Chapter 276 of the Laws of
Hong Kong).

                                                      50
                                              RISK FACTORS

      In the event of any compulsory acquisition of property in Hong Kong, the amount of compensation to
be awarded is based on the open market value of the relevant property and is assessed on the basis
prescribed in the relevant ordinances. If the Property is acquired compulsorily by the Government, the level
of compensation paid to Champion REIT pursuant to this basis of calculation may be less than the price
which Champion REIT paid for such Property and/or the market value of such Property at the relevant time.
In addition, Citibank Plaza is held under a lease from the Government, which will expire on June 30, 2047.
There is no assurance that such lease will be renewed on acceptable terms or at all.

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.
      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 the 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. The
Manager is required under the Trust Deed to use reasonable efforts to ensure that a minimum of 25% (or any
other percentage specified or permitted by the SFC from time to time) of the outstanding Units are held in
public hands. There can be no assurance as to the percentage of the Champion REIT’s unit capital which
will be held by the public or as to the number of Unitholders in Champion REIT at any time. In addition, as
REITs are relatively new investment products in Hong Kong, there are presently no official, and little or no
directly comparable, benchmarks against which Champion REIT’s performance can be measured.

An investment in the Units presents taxation risk.
      Champion REIT, as a collective investment scheme constituted as a unit trust and authorized under
section 104 of the SFO, is exempt from Hong Kong profits tax, although the Finance Company and the
Property Companies are subject to taxation in Hong Kong. In addition, although it is understood that, under
the Hong Kong Inland Revenue Department’s current practice, Hong Kong profits tax will not be payable by
a Unitholder on distributions made by Champion REIT, there is no assurance that the Hong Kong Inland
Revenue Department will not change its practice. Any change in the tax status of Champion REIT or any of
the Group Companies or in taxation legislation in Hong Kong generally or any other jurisdiction affecting
Unitholders, or the practice of the Hong Kong Inland Revenue Department, could affect the value of the
investments held by Champion REIT or affect Champion REIT’s ability to achieve its investment objectives
or alter after-tax returns to Unitholders. If you have any doubt as to your tax position, you should consult
your own tax advisor.

Unitholders will be effectively subordinated to all existing and future claims of creditors of the
Finance Company and the Property Companies.
      The claims of creditors of the Finance Company and the Property Companies will have priority to the
assets of such entities over the claims of Champion REIT. The Finance Company is expected to incur
indebtedness under the Facility and the Property Companies may in the future incur unsecured or secured
obligations directly. Secured creditors of the Finance Company and the Property Companies would have
prior rights of claim over the secured assets, and all creditors of the Finance Company and the Property
Companies would rank ahead of the claims of Champion REIT. In addition, as a condition precedent to the
drawdown of the Facility, a subordination deed is required to be entered into between the Finance Company,
the Property Companies, and the facility agent of the Facility whereby the liabilities of the Finance
Company and the Property Companies to Champion REIT will be subordinated to the liabilities of the
Finance Company to the lenders. See the section headed ‘‘Material Agreements and Other Documents
Relating to Champion REIT — The Facility’’ in this Offering Circular for further details of the Facility and
the subordination deed.

                                                      51
                                              RISK FACTORS

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

      Unitholders have no right to require the redemption of 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 between Great Eagle, the Manager and
the Joint Lead Underwriters (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 after the Global Offering and the price of the Units may be volatile. The price of the Units
will depend on many other factors, which may change from time to time, including, but not limited to,
(a) the perceived prospects of Champion REIT’s business and investments and the Hong Kong real estate
market; (b) differences between Champion REIT’s actual financial and operating results and those expected
by investors and analysts; (c) changes in Champion REIT’s revenues or earnings estimates or analysts’
recommendations or projections; (d) changes in general economic or market conditions both domestically
and internationally; (e) the market value of Champion REIT’s assets; (f) changes in market valuations of
similar companies or REITs; (g) increases in interest rates; (h) the perceived attractiveness of the Units
against those of other equity securities, including those not relating to the real estate sector; (i) the future
size and liquidity of the market for the Units and the Hong Kong real estate investment trust market
generally; (j) any future changes to the regulatory system, including the tax system, both generally and
specifically in relation to Hong Kong real estate investment trusts and owners and operators of property;
(k) the ability on Champion REIT’s part to implement successfully its investment and growth strategies and
to retain its key personnel; and (l) 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 net asset value per Unit. If Champion REIT retains operating cash flows for investment
purposes, as working capital reserves or for 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
Champion 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 principal-protected products and there is no guarantee that Unitholders
can regain the amount invested. If Champion 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 and certain other information in this Offering Circular may prove inaccurate.

      This Offering Circular contains forward-looking statements regarding, among other things, forecast
net profits and distribution levels. These forward-looking statements and certain other statements including
those with respect to asset valuations are based on a number of assumptions which are subject to significant
uncertainties and contingencies, many of which are outside of Champion REIT’s control. These include
information and statements contained in reports or documents prepared by various experts, including
Savills, Savills Project Consultancy Limited and Colliers. Moreover, Champion REIT’s income is
dependent on a number of factors, including the receipt of dividends and distributions, directly or indirectly,
from the Property Companies as well as rent from the Property. Such rent, dividends and distributions may
decrease for a number of reasons, including the lowering of occupancy and rental rates, and insolvency or
delay in rent payment by tenants, which may adversely affect Champion REIT’s ability to achieve the
forecasted distributions as some or all events and circumstances assumed may not occur as expected, or

                                                      52
                                               RISK FACTORS

events and circumstances which are not currently anticipated may arise. No assurance can be given that the
assumptions will be realized.

Operating losses incurred by the Property Companies may adversely affect levels of distributions.

      Champion REIT will operate principally through the Property Companies and its ability to make
distributions to Unitholders is ultimately dependent on the financial position of the Property Companies.
The net operating profit earned from property investments depends on, among other things, the amount of
rental income received, and the level of property, operating and other expenses incurred. If properties held
by Champion REIT directly or indirectly do not generate sufficient net operating profit, Champion REIT’s
income, cash flows and ability to make distributions and service its loans will be adversely affected. In order
to meet its payment obligations and to pay distributions to Unitholders, Champion REIT will ultimately rely
on the operating revenues from the Property Companies, which are dependent on, among other things, the
Property Companies’ business and financial condition, the availability of distributable profits, applicable
laws and regulations (which may restrict the payment of dividends by the Property Companies) or the terms
of agreements (including the Facility Agreement) to which they are, or may become, a party. In particular, if
an event of default under the Facility Agreement is outstanding, or if the dividend is derived from any profit
arising solely from revaluation surplus, the Property Companies are prohibited under the Facility Agreement
from declaring and making dividend payments to Champion REIT. For further details, see the section
headed ‘‘Material Agreements and Other Documents Relating to Champion REIT — The Facility’’ in this
Offering Circular.

      No assurance can be given as to Champion REIT’s ability to pay or maintain distributions. The level
of profit or surplus of each Property Company available for distribution by way of dividend to Champion
REIT may be affected by a number of factors, including operating losses incurred by the Property
Companies in any financial year. Operating losses may arise due to a revaluation of the Property that results
in a decrease in fair value of the Property, or for other reasons. Although GE Holder (together with Great
Eagle as guarantor) has agreed to guarantee the DPU of Champion REIT for the FY06 Distribution Period,
the occurrence of these or other factors may adversely affect the level of distributions paid to Unitholders in
future periods. See the section headed ‘‘Distribution Policy’’ in this Offering Circular.

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

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

The number of Units available for future sale could adversely affect the market price of the 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, Great
Eagle, Kerry Properties and Wing Tai will own 49.2%, 4.2% and 1.6%, respectively, of the then outstanding
Units (assuming the Over-allotment Option is not exercised at all). Although there are restrictions on the
disposal of Units held by these parties until 180 days after the Listing Date, there can be no assurance that
sales of substantial amounts of Units by other parties will not occur or that Great Eagle, Kerry Properties
and Wing Tai will not dispose of a substantial portion of their respective Units upon the lapse of such
restrictions. Sales of substantial amounts of Units in the public market following the Global Offering, or the
perception that such sales could occur, could adversely affect prevailing market prices for the Units.

                                                        53
                                              RISK FACTORS

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 Champion REIT. Where new Units are issued at less than NAV,
the NAV of existing Units will be diluted.

Unitholders’ interests will be diluted because all or part of the Manager’s compensation will be paid
in Units.
      For an initial period from the Listing Date until December 31, 2010, the Manager’s Fee referable only
to the Property will be paid entirely in Units and after this period the Manager’s Fee will be paid in cash
and/or Units as the Manager may elect. In addition, payment in the form of Units to the Manager, which is
based on the trading price range of the Units within a specified period, may be based on a price below
Champion REIT’s NAV, which would result in immediate dilution to Unitholders including in the amount
of DPU. See the section headed ‘‘The Manager — Fees, Costs and Expenses of the Manager’’ in this
Offering Circular.

The Hong Kong Takeovers Code does not apply to Unit acquisitions.
     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 REITs, 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.

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 Manager, who shall
forward to the Trustee, information in relation to the acquisition or disposal of interests in the Units. If the
Manager or the Trustee 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 Manager or the Trustee (as the case
may be according to the terms of the Trust Deed) 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, and suspending the transfer and registration of such Units.




                                                      54
                                                        USE OF PROCEEDS

      The Manager estimates that the total proceeds to Champion REIT from the Global Offering will be                                           B2(b)
approximately HK$7,097 million (based on the Maximum Offer Price), and approximately HK$6,171
million (based on the Minimum Offer Price).
      The net proceeds from the Units issued under the Global Offering, together with the funds drawn
down from the Facility, will be wholly used to make payment to the Vendor Companies, for the upfront
swap payments, and to meet the costs and expenses of the Global Offering and debt related costs. The
following table sets forth the sources of Champion REIT’s funds following the completion of the Global
Offering and the intended application of those funds.
                                                                                              Based on the               Based on the
                                                                                            Minimum Offer              Maximum Offer
                                                                                            Price of HK$5.00           Price of HK$5.75
                                                                                                           (HK$ millions)
Sources of funds:
1,234,219,752 Units issued pursuant to the Global Offering ****                                     6,171                      7,097
Initial drawdown of the term loan under the Facility **********                                     7,000                      7,000
Total *************************************************                                            13,171                     14,097

Uses of funds:
Payments to the Vendor Companies(1) **********************                                         11,487                     12,390
Upfront swap payments**********************************                                             1,417                      1,417
Costs and expenses of the Global Offering and debt related
  costs(2)(3) ********************************************                                            267                        290
Total *************************************************                                            13,171                     14,097

Notes:
(1)      This amount is the difference between the Implied Purchase Price and the principal amount of the Subscription Promissory
         Note (i.e. the aggregate subscription price for the Units subscribed by GE Holder, KP Holder and Wing Tai prior to the Listing
         Date) and is calculated as follows:
                                                                                                   Based on the         Based on the
                                                                                                 Minimum Offer         Maximum Offer
                                                                                                 Price of HK$5.00     Price of HK$5.75
                                                                                                             (HK$ millions)
         Aggregate of Initial Consideration payable to Vendor Companies ************                   18,664                  18,664
         IPO Adjustment ****************************************************                              366                   2,400
         Implied Purchase Price***********************************************                         19,030                  21,064
         Subscription Promissory Note *****************************************                        (7,542)                 (8,674)
         Payment to Vendor Companies ****************************************                          11,487                  12,390

(2)      Costs and expenses related to the Global Offering include underwriting commissions payable to the Underwriters (based on the
         final Global Offering size), legal fees, printing costs, auditors’ fees, listing costs, advertisement and marketing-related expenses
         and other administrative expenses. Debt related costs include primarily front-end fees payable in respect of the Facility.
(3)      Under the Over-allotment Agreement, the underwriting commission and expenses (including, but not limited to, stamp duties,
         Hong Kong Stock Exchange trading fee and SFC transaction levy) as a result of the exercise of the Over-allotment Option will
         be borne by Champion REIT.




                                                                     55
                                          OWNERSHIP OF THE UNITS

SIGNIFICANT UNITHOLDERS AND OTHER UNITHOLDERS
     So far as the Directors are aware, except for Great Eagle (through its wholly-owned subsidiary), no                 B5
person will, upon completion of the Global Offering, hold an interest in 5% or more of the issued Units.
      The table below sets out the number and percentage of Units to be held by Great Eagle, Kerry
Properties, Wing Tai and the Public Unitholders upon completion of the Global Offering and also after the
exercise of the Over-allotment Option in full:
                                                                 Upon completion of          After exercise of the
                                                                 the Global Offering        Over-allotment Option(1)
                                                                                % of                          % of
                                                                             total Units                   total Units
                                                             No. of Units      in issue    No. of Units      in issue
Great Eagle ***********************************
           (2)
                                                            1,349,495,877        49.2      1,183,875,928       43.2
Kerry Properties(2) *******************************           114,796,151         4.2        100,707,533        3.7
Wing Tai***************************************                44,198,781         1.6         38,774,385        1.4
Public Unitholders *******************************          1,234,219,752        45.0      1,419,352,715       51.7
Total ******************************************            2,742,710,561       100.0      2,742,710,561      100.0

Notes:
(1) Assuming that the Over-allotment Option is exercised in full.
(2) Held through a wholly-owned subsidiary.
     The following persons will be deemed to be interested in 1,349,495,877 Units or 49.2% of the issued
Units (assuming that the Over-allotment Option is not exercised) upon completion of the Global Offering
through their respective interests in Great Eagle as of the Latest Practicable Date:
           (1) HSBC International Trustee Limited (‘‘HKIT’’) by reason of its interest in approximately
               243,648,838 Great Eagle Shares or approximately 40.91% of the issued shares of Great
               Eagle;
           (2) Dr. Lo Ka Shui, the non-executive Chairman of the board of directors of the Manager, by
               reason of his interest in approximately 267,333,382 Great Eagle Shares or approximately
               44.88% of the issued shares of Great Eagle; and
           (3) Mr. Lo Kai Shui, a non-executive director of the Manager, by reason of his interest in
               approximately 249,932,255 Great Eagle Shares or approximately 41.96% of the issued shares
               of Great Eagle.
      194,085,777 of the respective number of Great Eagle Shares in which Dr. Lo Ka Shui and Mr. Lo Kai
Shui are interested were the same parcel of shares and form part of the Great Eagle Shares in which HKIT is
interested.
      The Directors and their associates do not intend to subscribe for any Units in the Global Offering.                B5, B6




                                                            56
                                        DISTRIBUTION POLICY

     The Manager’s policy is to distribute to Unitholders an amount equal to 100% of Champion REIT’s              B2(l)/
Annual Distributable Income for each financial year. Pursuant to the Trust Deed, Champion REIT is in any          7.12/
event required to ensure that the total amount distributed to Unitholders shall be no less than 90% of            B13
Champion REIT’s Annual Distributable Income for each financial year.

      For these purposes, and under the terms of the Trust Deed, ‘‘Annual Distributable Income’’ is the
consolidated audited net profit after tax of Champion REIT and each Special Purpose Vehicle owned by the
Trustee on trust for and on behalf of Champion REIT for the relevant financial year adjusted to eliminate the
effects of certain Adjustments (as defined below) which have been recorded in the income statement for the
relevant financial year. After eliminating these Adjustments, Annual Distributable Income may be different
from the net profit recorded for the relevant financial year.

      ‘‘Adjustments’’ means significant adjustments which are charged or credited to the income statement
for the relevant financial year or the relevant distribution period, as the case may be, including:
(a) unrealized property revaluation gains/losses, including impairment provisions and reversals of
impairment provisions; (b) impairment loss of goodwill/recognition of negative goodwill; (c) differences
between cash and accounting finance costs; (d) realized gains on the disposal of properties; (e) fair value
changes on financial instruments; (f) deferred tax charges/credits in respect of property valuation
movements, fair value changes on financial instruments and commercial building allowances /capital
allowances and other tax deductions claimed; (g) the portion of the Manager’s management fee that is paid
in the form of Units; (h) costs of any public offering of Units that are expensed through the income
statement but are funded by proceeds from the issuance of such Units; and (i) other material non-cash
gains/losses.

     The sources of the distribution to Unitholders are from: (1) net profit after tax generated by each
Special Purpose Vehicle which the Special Purpose Vehicles pay to Champion REIT by way of dividend;
and (2) distribution of capital which is facilitated by the Special Purpose Vehicles repaying loans to
Champion REIT.

      In addition, the Manager also has the discretion to distribute any additional amounts (including
capital) provided that no amount of revaluation surplus on real estate credited to income, or gains on
disposal of real estate, whether directly or indirectly through the disposal of any Special Purpose Vehicle,
shall form part of any distribution to Unitholders unless the Manager shall have obtained the Trustee’s prior
consent.

       Champion REIT’s initial distribution policy is that two distributions will be made in respect of each
year for the six-month periods ending June 30 and December 31, except with respect to 2006, where one
distribution will be made in respect of the period from the Listing Date to December 31, 2006. Distributions
will be paid within 150 days of the end of the relevant period. The Directors anticipate that interim and final
distributions will be paid by the end of November and May following each six-month period, respectively.
With respect to 2006, Champion REIT’s first distribution after the Listing Date will be for the FY06
Distribution Period, which is the period from the Listing Date to December 31, 2006, and which is expected
to be paid by the end of May 2007. Each of GE Holder (together with Great Eagle as guarantor), KP Holder
(together with Kerry Properties as guarantor) and Wing Tai (together with Great Eagle as guarantor) has
entered into a deed with the Trustee and the Manager pursuant to which it has agreed to waive its
entitlement to receive any distributions payable (a) for the FY06 Distribution Period with respect to all of
the Units it holds as of the Listing Date; (b) for the FY07 Distribution Periods with respect to 55% of the
Units it holds as of the Listing Date and (c) for the FY08 Distribution Periods with respect to 20% of the
Units it holds as of the Listing Date. Each such portion of the distributions waived will be available for
distribution to other Unitholders. The indicative DPU (after taking into account the effect of the Distribution
Waiver) for the FY06 Distribution Period will be HK$0.1694. For a further description of the management
fee to be paid to the Manager in the form of Units in these periods, see the section headed ‘‘Profit Forecast’’
in this Offering Circular.

                                                      57
                                       DISTRIBUTION POLICY

      GE Holder (together with Great Eagle as guarantor) has entered into a deed of guarantee with the
Trustee and the Manager pursuant to which GE Holder has guaranteed that the DPU of Champion REIT
payable to the Public Unitholders for the FY06 Distribution Period will not be less than HK$0.1694 (after
taking into account the effect of the Distribution Waiver). See the section headed ‘‘Material Agreements and
Other Documents Relating to Champion REIT — DPU Guarantee Deed’’ in this Offering Circular.

     The Manager must notify each Unitholder through the annual and interim reports of Champion REIT
and the results announcements of Champion REIT for the relevant periods:

     (a) the extent to which a distribution made is composed of, and the types of, income and capital
         (which shall be determined by the Manager in its absolute discretion); and

     (b) any amounts deducted from each Unitholder’s distribution entitlement as permitted under the
         Trust Deed in respect of (i) any tax paid or payable by the Manager or the Trustee in respect of
         that Unitholder on the amount of the income of Champion REIT and attributable to that
         Unitholder, or the amount of the distribution otherwise distributable to that Unitholder; (ii) any
         deduction required to be made by law or by the Trust Deed; or (iii) any amount payable by that
         Unitholder in respect of Champion REIT to the Trustee or the Manager.

      Investors should note that the DPU during the five-year term of the Facility will be enhanced by
the interest rate swaps, that such enhancement effect will diminish over the five-year term and that
therefore the Annual Distributable Income will decrease during the five-year term of the interest rate
swaps in the absence of increased net property income. Investors should also note that the DPU for
the FY06 Distribution Period, FY07 Distribution Periods and FY08 Distribution Periods would
decrease in the absence of any increase of Annual Distributable Income during such three-year
period, and that only the DPU for the FY06 Distribution Period has been guaranteed by Great Eagle.
There is no assurance that the DPU for future periods will not decrease.

      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 Champion 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 Hong Kong Inland Revenue
Department’s current practice, Hong Kong profits tax will not be payable by a Unitholder on distributions
made by Champion REIT. However, Unitholders should take advice from their own professional advisors as
to their particular tax position.

      Champion REIT’s ability to make distributions is dependent on, among other things, the Trustee
having available sufficient cash in Champion REIT to make the payments required. See the section headed
‘‘Risk Factors — Risks Relating to an Investment in the Units — Operating losses incurred by the Property
Companies may adversely affect levels of distributions’’ in this Offering Circular. The REIT Code requires
the Manager and the Trustee to ensure that each company used to hold real estate and other assets for
Champion REIT for the time being shall distribute to Champion REIT all of such company’s income for
each financial year as permitted by the laws and regulations of its relevant jurisdiction of incorporation.




                                                    58
GRADE A OFFICE MARKET IN HONG KONG AND
        IN THE CENTRAL DISTRICT




                  59
       GRADE A OFFICE MARKET IN HONG KONG AND IN THE CENTRAL DISTRICT


       Colliers was commissioned by the Manager to prepare a report on the Hong Kong office property
  market. The following is a summary of Colliers’ report in relation to the Grade A Office Market in Hong
  Kong and in the Central District, the full text and sources of which are set out in Appendix VI to this
  Offering Circular. All views expressed in this summary are the independent views of Colliers. The
  information has not been independently verified by Champion REIT, the Manager, the Trustee, the
  Underwriters, the Listing Agent, Great Eagle, GE Holder, Kerry Properties, KP Holder, Wing Tai, the
  Vendor Companies or any other person. Much of this information is based on estimates and should
  therefore be regarded as indicative only and treated with appropriate caution. In addition, statements set
  out below that are not derived from historical data may be forward-looking statements. Such statements
  are based on the views and assumptions of third parties including Colliers and are subject to 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 by Champion REIT, the Manager, the Trustee, the Underwriters, the Listing Agent, Great
  Eagle, GE Holder, Kerry Properties, KP Holder, Wing Tai, the Vendor Companies or any other person
  that the assumptions underlying the forward-looking statements will materialize or that the forward-
  looking statements will be achieved or are likely to be achieved.


EXECUTIVE SUMMARY
Economic Environment                                                                                             B2(e)

       Capitalizing on its geographical location in the region, Hong Kong has succeeded in transforming
itself from a small industrial-based city into a regional financial hub. Its well-established legal system and
the simple tax regime coupled with the open-door policy in Mainland China and the continued economic
development in the Pearl River Delta (‘‘PRD’’) region have helped consolidate the role of Hong Kong as the
financial centre in the region.
      Due to the sustained expansion of the global economy during the period between 2003 and 2005 and
the continued export growth in the Mainland economy, the local economy has made a significant rebound
since the trough in the second quarter of 2003. Although the pace of economic growth shows signs of
slowing after delivering an annualized GDP growth of 12.4% year-on-year (‘‘YoY’’) in the second quarter
of 2004, growth in the local economy remained strong with an annualised growth of 6.0% to 8.3% YoY over
the past one and a half years.




                                                      60
                          GRADE A OFFICE MARKET IN HONG KONG AND IN THE CENTRAL DISTRICT

                                                                                                  HONG KONG GDP
                                15.0%


                                12.5%


                                10.0%


                                 7.5%
        Quarterly GDP (% YoY)




                                 5.0%


                                 2.5%


                                 0.0%
                                         1Q 95


                                                 4Q 95


                                                         3Q 96


                                                                 2Q 97


                                                                         1Q 98


                                                                                 4Q 98


                                                                                         3Q 99


                                                                                                 2Q 00


                                                                                                         1Q 01


                                                                                                                 4Q 01


                                                                                                                          3Q 02


                                                                                                                                  2Q 03


                                                                                                                                          1Q 04


                                                                                                                                                  4Q 04


                                                                                                                                                          3Q 05


                                                                                                                                                                  2Q 06


                                                                                                                                                                          1Q 07


                                                                                                                                                                                  4Q 07


                                                                                                                                                                                          3Q 08


                                                                                                                                                                                                  2Q 09


                                                                                                                                                                                                          1Q 10


                                                                                                                                                                                                                  4Q 10
                                 -2.5%


                                 -5.0%


                                 -7.5%


                                -10.0%


Source:                         Census and Statistics Department, HKSAR Government (1Q 1995-4Q 2005); Economist Intelligence Unit (2006-2010)


Note:
HKSAR Government = The Government of the Hong Kong Special Administrative Region of the People’s Republic of China. The
Economist Intelligence Unit is a member of The Economist Group, which provides economic forecasts of various countries around
the world, including Hong Kong.

     The Economist Intelligence Unit has predicted GDP growth in Hong Kong to be within the range of
4.2% to 5.5% YoY during the forecast period between 2006 and 2010.

      Given the resilient economic performance, the outlook of the local services industries is positive and
the prospective growth of the office rental property market is expected to be significant.

      The growth of services industries has been one of the key features in Hong Kong amid the continued
economic restructuring over the past years. According to a breakdown of Hong Kong GDP by economic
activity prepared by the Census and Statistics Department of the HKSAR Government, services industries
accounted for 87% of the total GDP in 2004, contrasted with the figures of 79% and 64% in 1994 and 1984
respectively.

      Due to the implementation of the Mainland and Hong Kong Closer Economic Partnership
Arrangement (‘‘CEPA’’) and the launch of Individual Visit Scheme (‘‘IVS’’) by the China Central
Government in mid-2003, there has been a significant number of visitors coming from the Mainland to
Hong Kong. According to figures published by the HKSAR Government, an average of 1,045,117 visitors
came to Hong Kong from the Mainland per month in 2005. This represented a 48% increase compared with
the average monthly figures for 2003. Meanwhile, visitors from the Mainland in 2005 represented an
average of 54% of the total number of overseas visitors coming to Hong Kong. Colliers believes that the
significant number of visitors coming over to Hong Kong is expected to provide further economic growth in
Hong Kong, leading to further growth in the services industries and consequently creating further demand
for offices.

       There are three principal industry groups within the services industries, namely (a) wholesale, retail
and import and exports trades, restaurants and hotels; (b) transport, storage and communications; and
(c) financing, insurance, real estate and business services (‘‘FIRE’’). These three industry groups make up

                                                                                                                         61
          GRADE A OFFICE MARKET IN HONG KONG AND IN THE CENTRAL DISTRICT

31%, 12% and 25% respectively of the GDP of the whole services sector as of 2004 according to figures
published by the Census and Statistics Department of the HKSAR government.
      In Hong Kong, there exist a vast number of small to medium sized enterprises (‘‘SMEs’’) engaged in
the industry group comprised of wholesale, retail and import and export trades, restaurant and hotels. Since
the entry of China into the World Trade Organization (‘‘WTO’’), there has been an increasing volume of
cargo flow between China and Hong Kong and in goods being re-exported from Hong Kong. This has
resulted in a growth in companies engaged in this industry group and other supporting industries such as
transportation and storage. That growth has led to an increasing level of demand for offices.
      During the period from the second quarter of 2003 to the third quarter of 2005, there was a significant
140% increase in the number of job vacancies in the wholesale, retail and import and export trades
according to figures published by the Census and Statistics Department of the HKSAR Government. The
resultant increase in personnel in the industry group created an increased demand for offices. However, the
net impact to the office market attributable to this growth has been more diversified than that created by the
recent growth in the FIRE sector. The companies involved in this industry group are generally less location
sensitive than companies in the FIRE sector. They are flexible in office quality and can accept office
premises of second-tier quality, including Grade B and C buildings lying outside the core business areas.
      The FIRE sector, together with its related industries, has been growing according to figures published
by the Census and Statistics Department of the HKSAR Government. The number of persons engaged in the
FIRE sector was 455,408 as at the end of September 2005, representing about one-fifth of the total working
population across the whole Hong Kong economy. Although the size of the FIRE industries increased only
slightly by 9% during the period from the second quarter of 2003 to the third quarter of 2005, the number of
job vacancies in the sector posted a dramatic increase of 92% during the same period. Colliers believes that
the higher the number of job vacancies in the FIRE sector, the stronger the demand will be for Grade A
office space, particularly in the sub-market of the central business district in Hong Kong.


                                                                                                                          The ‘‘FIRE’’ Industries in Hong Kong
                                                                        500,000                                                                                                                                                                                                                                                                25,000


                                                                        450,000                                                                                                                                                                                                                                                                22,500
                     Number of persons engaged in the FIRE industries




                                                                                                                                                                                                                                                                                                                                                        Number of job vacancies in the FIRE industries




                                                                        400,000                                                                                                                                                                                                                                                                20,000

                                                                                           Left hand scale
                                                                        350,000                                                                                                                                                                                                                                                                17,500


                                                                        300,000                                                                                                                                                                                                                                                                15,000


                                                                        250,000                                                                                                                                                                                                                                                                12,500

                                                                                                                                                                                                                                                                                            Right hand scale
                                                                        200,000                                                                                                                                                                                                                                                                10,000


                                                                        150,000                                                                                                                                                                                                                                                                7,500


                                                                        100,000                                                                                                                                                                                                                                                                5,000


                                                                         50,000                                                                                                                                                                                                                                                                2,500


                                                                             0                                                                                                                                                                                                                                                                 0
                                                                                  Dec-91

                                                                                            Jun-92

                                                                                                     Dec-92

                                                                                                              Jun-93

                                                                                                                       Dec-93

                                                                                                                                Jun-94

                                                                                                                                         Dec-94

                                                                                                                                                  Jun-95

                                                                                                                                                           Dec-95

                                                                                                                                                                    Jun-96

                                                                                                                                                                             Dec-96

                                                                                                                                                                                      Jun-97

                                                                                                                                                                                               Dec-97

                                                                                                                                                                                                        Jun-98

                                                                                                                                                                                                                 Dec-98

                                                                                                                                                                                                                          Jun-99

                                                                                                                                                                                                                                   Dec-99

                                                                                                                                                                                                                                            Jun-00

                                                                                                                                                                                                                                                     Dec-00

                                                                                                                                                                                                                                                              Jun-01

                                                                                                                                                                                                                                                                       Dec-01

                                                                                                                                                                                                                                                                                Jun-02

                                                                                                                                                                                                                                                                                         Dec-02

                                                                                                                                                                                                                                                                                                  Jun-03

                                                                                                                                                                                                                                                                                                           Dec-03

                                                                                                                                                                                                                                                                                                                    Jun-04

                                                                                                                                                                                                                                                                                                                             Dec-04

                                                                                                                                                                                                                                                                                                                                      Jun-05




Source:   Census and Statistics Department, HKSAR Government

      Other than the growth of the services industries, the increasing number of overseas companies in Hong
Kong has also represented a key factor driving the office market. According to the Companies Registry of
the HKSAR Government, during the period between January 1996 and November 2005 the total number of
overseas companies in Hong Kong has been increasing at an average rate of 6.0% YoY. As at the end of
November 2005, there were a total of 7,471 overseas companies registered in Hong Kong. This trend of an
increasing number of overseas companies establishing operations in Hong Kong actively contributes to the
level of demand in the office market.

                                                                                                                                                                                                           62
          GRADE A OFFICE MARKET IN HONG KONG AND IN THE CENTRAL DISTRICT

       According to the projection made by the Economist Intelligence Unit, the composite consumer price
index (‘‘CPI’’) in Hong Kong is expected to rise 1.4% YoY in 2006 and 1.8% in 2007. The Economist
Intelligence Unit predicts that inflation will accelerate to 1.8% to 2.1% YoY during the period between 2008
and 2010. On the back of these expectations of further rises in consumer prices and a predicted growth in
office rentals, Colliers believes that investment demand for offices is going to be encouraged by promising
capital appreciation since real estate investment is a good hedge against inflation. The potential
enhancement in capital values is therefore expected by Colliers to prompt more vendors to adjust upward
their asking rentals and so on.
     Consistent with the trend of economic growth in Hong Kong, overall employment rates have been
improving since mid 2003. After hitting a peak of 8.6% during the three-month period ended May 2003, the
average unemployment rate had dropped to 5.3% during the three-month period ended December 2005. The
Economist Intelligence Unit has projected the average unemployment rate to fall continuously from the
current level to 3.7% by 2010. If the projection materializes, Colliers believes it will create a direct positive
benefit to the office property market.

Hong Kong Grade A Office Market
  Stock
      There was a total of 61.9 million sq. ft. of Grade A office stock in Hong Kong as at the end of 2004.
The six main business districts, namely (1) Sheung Wan, (2) Central, (3) Wan Chai/Causeway Bay,
(4) North Point/Quarry Bay, (5) Tsim Sha Tsui and (6) Yau Ma Tei/Mong Kok, contain a total of
47.0 million sq. ft. Grade A office space, representing 76% of the total stock. Central District contains
17.0 million sq. ft. or 27% of the total Grade A office stock in Hong Kong, making it the business district
with the largest source of Grade A office stock in Hong Kong.
      Central District is the heart of the central business district on Hong Kong Island. Legal firms, banks,
insurance houses and financial services companies are the major tenants in the district, taking up about 70%
of the total 17.0 million sq. ft. of office space in the district.

                                                      Grade A Office Stock
                                                      (As of December 31, 2004)
                                                                    Sheung Wan
                                                                 2.5 million sq. ft. 4%
                                 Other Districts
                              14.9 million sq. ft. 24%
                                                                                                Central
                                                                                          17.0 million sq. ft. 27%



                     Yau Ma Tei / Mong Kok
                       2.0 million sq. ft. 3%


                               Tsim Sha Tsui
                            9.0 million sq. ft. 15%
                                                                                   Wan Chai / Causeway
                                           North Point / Quarry Bay                          Bay
                                             6.3 million sq. ft. 10%               10.2 million sq. ft. 17%

Source:   Rating and Valuation Department, HKSAR Government

  Supply
     The Hong Kong Grade A office market has historically been cyclical. Since 1986, the market has been
through 4 cycles, each lasting 4 to 6 years. During the respective cycles, the supply of new Grade A office

                                                                 63
                                      GRADE A OFFICE MARKET IN HONG KONG AND IN THE CENTRAL DISTRICT

space has fluctuated from less than 1 million sq. ft. per annum to more than 3 million sq. ft. per annum.
During the period between 1986 and 2004, the historical average new supply was running at 2.4 million
sq. ft. per annum.
      Colliers believes that the next supply cycle will run from 2005 to 2010 and estimates that average new
supply during the cycle will be 1.6 million sq. ft. per annum, with only 0.1 million sq. ft. expected for the
Central District in 2006 and no new supply expected for completion in the Central District during 2007 and
2008. Overall, Colliers expects the average annual supply between 2005 and 2010 to be around the same
level as the average new supply of 1.6 million sq. ft. per annum between 2000 and 2004 and approximately
30% less than the historical average new supply of 2.4 million sq. ft. per annum between 1986 and 2004.


                                                                                                                         Hong Kong Grade A Office Market
                                                                                                                                                                                                                                                                                               Projected Hong Kong
                                                                                                                                                                                                                                                                                               Grade A Average: 1.6
                                                                                                      1986-2004 Hong Kong Grade A Historical Average: 2.4                                                                                                                                    Projected Central Grade A
                                                                                                       1986-2004 Central Grade A Historical Average: 0.5                                                                                                                                          Average: 0.16
                                     8.00




                                                                                                                                                                                                6.84
                                     7.00
     Supply per Annum (mm sq. ft.)




                                     6.00


                                     5.00




                                                                                                                                                                                                                                                                                                                            3.93
                                                                                                                                                                                                              3.70
                                                                                                                      3.66




                                                                                                                                                                                  3.64
                                                                                                                                                  3.55




                                     4.00
                                                                                                        3.00




                                                                                                                                                                                                                                                              2.85

                                                                                                                                                                                                                                                                            2.53
                                     3.00
                                                                  2.39




                                                                                                                                                           2.39
                                                                                2.30




                                                                                                                                    2.05
                                                    1.83




                                                                                                                                                                                                                                                                                                                1.74
                                     2.00




                                                                                                                                                                                                                                                                                                                                       1.47
                                                                                                                                                                                                                                                                     1.47
                                                                                                                                                                    1.40




                                                                                                                                                                                                                                                1.26




                                                                                                                                                                                                                                                                                               1.24
                                                                         0.95




                                                                                                                                                                                                       0.92
                                                                                                                             1.02




                                                                                                                                                                                                                     0.88




                                                                                                                                                                                                                                                                                                                                                        0.93
                                                                                       0.78
                                                                                               0.69
                                                           0.76




                                                                                              0.54




                                                                                                                                                                                                                            0.68




                                                                                                                                                                                                                                                                                                                                              0.57(3)
                                                                                                                                                                                                                                         0.66




                                     1.00
                                                                                                               0.50




                                                                                                                                                                                         0.50




                                                                                                                                                                                                                                                                                     0.32(1)
                                                                                                                                                                                                                                                       0.42




                                                                                                                                                                                                                                                                                     0.32
                                                                                                                                                                           0.27




                                                                                                                                                                                                                                                                                                      0.10(2)
                                            0.16




                                                                                                                                                                                                                                     0.18
                                            0.08




                                                                                                                                           0.09




                                     0.00




                                                                                                                                                                                                                                                                                                                              2008F#

                                                                                                                                                                                                                                                                                                                                         2009F#

                                                                                                                                                                                                                                                                                                                                                          2010F#
                                             1986

                                                      1987

                                                                    1988

                                                                                  1989

                                                                                               1990

                                                                                                          1991

                                                                                                                        1992

                                                                                                                                      1993

                                                                                                                                                    1994

                                                                                                                                                             1995

                                                                                                                                                                      1996

                                                                                                                                                                                    1997

                                                                                                                                                                                                  1998

                                                                                                                                                                                                                1999

                                                                                                                                                                                                                              2000

                                                                                                                                                                                                                                      2001

                                                                                                                                                                                                                                                  2002

                                                                                                                                                                                                                                                                2003

                                                                                                                                                                                                                                                                              2004

                                                                                                                                                                                                                                                                                      2005

                                                                                                                                                                                                                                                                                                 2006F*

                                                                                                                                                                                                                                                                                                                  2007F*
                                                                                                                                                                                                                                                                       Hong Kong Grade A                                   Central Grade A


Source:                                 Rating and Valuation Department, HKSAR Government (1986-2007); Colliers (2008-2010)

Notes:
(1)                                  AIG Tower
(2)                                  York House
(3)                                  Assumes the successful sale and completion of the redevelopment of the Central Market on Jubilee Street.
F*:                                  Forecast by Rating and Valuation Department, HKSAR Government.
F#:                                  Forecast by Colliers.


     Take Up
      Similar to the supply cycles, the take up of Hong Kong Grade A offices has historically fluctuated
within a wide range. During the period between 1991* and 2004, the average take up was 2.2 million sq. ft.
per annum. After the burst of the technology bubble in 2000 and during the period between 2001 and 2003,
take up plummeted to 0.4 million sq. ft. per annum, well below the average historical level between 1991
and 2004. The total take up recovered to 3.5 million sq. ft. in 2005 due primarily to the general recovery of
the local economy that had started in mid 2003.

Note:
*:                                   There was no aggregate Grade A office take up figure provided by the Rating and Valuation Department of the HKSAR
                                     Government for the years before 1991.

                                                                                                                                                                                   64
                             GRADE A OFFICE MARKET IN HONG KONG AND IN THE CENTRAL DISTRICT

  Vacancy
     Due to the mismatch between demand and supply cycles, the average vacancy rates in the Hong Kong
Grade A office market have been moving within a wide range from less than 4% in 1986 to more than 15% in
1998. The historical average vacancy rate between 1986 and 2004 was 8.8%. Since the economic recovery in
mid 2003, the increase in vacancy rates was reversed in 2004, dropping to 8.1% as at the end of 2005.

Historical Average Vacancy Rate
                                                                 Hong Kong Grade A Office Vacancy Rate
                             18.0%


                             16.0%


                             14.0%


                             12.0%
     As a % of total stock




                             10.0%


                             8.0%
                                                                                                                                                      Average Vacancy Rate
                                                                                                                                                       (1986 - 2004): 8.8%
                             6.0%


                             4.0%


                             2.0%


                             0.0%
                                     1986


                                            1987


                                                   1988


                                                          1989


                                                                 1990


                                                                        1991


                                                                               1992


                                                                                      1993


                                                                                             1994


                                                                                                     1995


                                                                                                            1996


                                                                                                                   1997


                                                                                                                          1998


                                                                                                                                 1999


                                                                                                                                        2000


                                                                                                                                               2001


                                                                                                                                                        2002


                                                                                                                                                               2003


                                                                                                                                                                      2004


                                                                                                                                                                             2005
Source:                       Rating and Valuation Department, HKSAR Government

                                                                                                                                                            Hong Kong
              Period                                                                                                                                       Grade A Office

              1986 — 2004*****************************************************                                                                                    8.8%
              2001************************************************************                                                                                    8.7%
              2002************************************************************                                                                                   10.8%
              2003************************************************************                                                                                   13.7%
              2004************************************************************                                                                                   13.1%
              2005************************************************************                                                                                    8.1%
Source:                       Rating and Valuation Department, HKSAR Government

  Rental Growth
     During the period between 2003 and 2005, Hong Kong Grade A office market has witnessed an
accumulated rental growth of 36%.
      During the period between 1986 and 2004, the average office rental growth was 5.0% per annum. In
2005, office rents increased 29% per annum. Due to the prevailing trend of limited supply in the market and
the growing demand for office space, office rentals are predicted by Colliers to increase 30% per annum in
2006 and 10% per annum in 2007. Beyond 2008, Colliers believes that the long term rental growth trend for
Hong Kong Grade A office will be in line with the historical annual average rental growth between 1986
and 2004 of 5.0% due to the prospective GDP growth and the buoyant services industries sector.

                                                                                                    65
                         GRADE A OFFICE MARKET IN HONG KONG AND IN THE CENTRAL DISTRICT

                                                                               Hong Kong Grade A Office Rental Index
                                      200




                                      175




                                      150
          Rental Index (1999 = 100)




                                                                                                                                                                              46%
                                                                                                                                                                            below
                                                                                                                                                                             1994
                                                                                                                                                                             peak
                                      125




                                      100




                                      75




                                      50




                                                                                                                                                                                             2006 F#

                                                                                                                                                                                                       2007 F#
                                            1986

                                                   1987

                                                          1988

                                                                 1989

                                                                        1990

                                                                                1991

                                                                                       1992

                                                                                              1993


                                                                                                     1994

                                                                                                            1995

                                                                                                                    1996

                                                                                                                           1997

                                                                                                                                  1998

                                                                                                                                         1999


                                                                                                                                                2000

                                                                                                                                                       2001

                                                                                                                                                              2002


                                                                                                                                                                     2003

                                                                                                                                                                             2004

                                                                                                                                                                                    2005
Source:                               Rating and Valuation Department, HKSAR Government (1986-2005); Colliers (2006-2007)


Note:

F#:      Forecast by Colliers

     The following table summarizes the historical rental growth rates for Hong Kong Grade A office from
1986-2005 and projected rental growth rates from 2006 to 2007.
                                                                                                                                                                                Hong Kong
         Period                                                                                                                                                                Grade A Office

         Historical Annual Average (1986-2004)(1) ******************************                                                                                                           5.0%
         2005************************************************************                                                                                                                  29%
         2006 F# *********************************************************                                                                                                                 30%
         2007 F# *********************************************************                                                                                                                 10%
Source:                               Rating and Valuation Department, HKSAR Government (1986-2005); Colliers (2006-2007)


Notes:
(1)      The highest YoY rental growth during this period for the Hong Kong Grade A office market was 61.3% in 1989. The sharpest
         YoY decline during this period for the Hong Kong Grade A office market was 27.7% in 1999.

F#:      Forecast by Colliers


Central District Grade A Office Market

      Stock

      As of December 31, 2004, the Central District was the district with the largest source of Grade A
office stock in Hong Kong, accounting for 17.0 million sq. ft. or 27% of the total.

                                                                                                                   66
                                      GRADE A OFFICE MARKET IN HONG KONG AND IN THE CENTRAL DISTRICT

    Supply
      The historical average new supply during the period between 1986 and 2004 in the Central District
was about 0.5 million sq. ft. per annum. In 2005, AIG Tower was the major source of supply, providing
0.32 million sq. ft. of floor area. In 2006, the only new supply is expected to be York House, containing
about 0.1 million sq. ft. of floor area. Going beyond 2006, no new publicly announced Grade A office
project has been planned for completion in the Central District during 2007 and 2008, and therefore no new
supply is expected by Colliers in 2007 and 2008.
      Although the site of Central Market at Jubilee Street (IL 8941) is likely to be taken off the
‘‘Application List’’* and put up for public auction in 2006, Colliers does not expect the physical completion
of the development before 2009. As such Colliers predict that, during the supply cycle from 2005 to 2010,
the prospective new supply in the Central District will fall below the historical average of 0.5 million sq. ft.
per annum seen between 1986 and 2004.

Note:
*          The Application List is a market-led system implemented by the Hong Kong SAR Government since April 1999 in order to
           supplement the regular land auction and tender programme. Any developer interested in any of the sites on the Application List
           may submit an application to the Lands Department by offering a price for the site. If the offer price is considered reasonable
           and is accepted by the Government, the site would be put up for sale by auction or tender.


                                                                                      Central Grade A Office New Supply

                                                                                                                                                                                          Projected Central Grade A
                                                                                 1986-2004 Central Grade A Historical Average: 0.5                                                             Average: 0.16


                                     1.6

                                                                                                                                                                  1.47
     Supply per Annum (mm sq. ft.)




                                     1.4


                                     1.2
                                                                                     1.02
                                                         0.95




                                                                                                                               0.92




                                     1.0
                                                                                                                                      0.88
                                                                0.78
                                                  0.76




                                     0.8




                                                                                                                                                                                                                        0.57 (3)
                                                                       0.54

                                                                              0.50




                                     0.6
                                                                                                                        0.50




                                                                                                                                                           0.42




                                                                                                                                                                                0.32(1)




                                     0.4
                                                                                                                 0.27




                                                                                                                                                    0.18




                                                                                                                                                                                            0.10(2)




                                     0.2
                                           0.08




                                                                                            0.09




                                     0.0
                                           1986

                                                  1987

                                                         1988

                                                                1989

                                                                       1990

                                                                              1991

                                                                                     1992

                                                                                            1993

                                                                                                   1994

                                                                                                          1995

                                                                                                                 1996

                                                                                                                        1997

                                                                                                                               1998

                                                                                                                                      1999

                                                                                                                                             2000

                                                                                                                                                    2001

                                                                                                                                                           2002

                                                                                                                                                                  2003

                                                                                                                                                                         2004

                                                                                                                                                                                2005

                                                                                                                                                                                            2006F*

                                                                                                                                                                                                      2007F*

                                                                                                                                                                                                               2008F#

                                                                                                                                                                                                                        2009F#

                                                                                                                                                                                                                                   2010F#




Source:                                Rating and Valuation Department, HKSAR Government (1986-2007); Colliers (2008-2010)

Notes:
(1)                                  AIG Tower
(2)                                  York House
(3)                                  Assumes the successful sale and completion of the redevelopment of the Central Market on Jubilee Street.
F*:                                  Forecast by Rating and Valuation Department, HKSAR Government.
F#:                                  Forecast by Colliers.




                                                                                                                        67
          GRADE A OFFICE MARKET IN HONG KONG AND IN THE CENTRAL DISTRICT

  Take Up
      Due to the recovery of the economy, the take up in the Central District increased from slightly above
0.5 million sq. ft. in 2003 to more than 0.7 million sq. ft. in 2004. The market data compiled by Colliers
suggests that the take up in the Central District was in the region of 0.7 million sq. ft. in 2005. Without
sufficient available stock satisfying the prevailing buoyant demand for office space, Colliers believes the
market is going to see further growth in rentals.

  Vacancy
      Largely attributed to the buoyant finance and insurance industries, the average vacancy level in the
Central District contracted from 15.2% in 2003 to 10.8% in 2004, compared to the average historical
vacancy rate of 7.1% from 1986 to 2004. An internal survey undertaken by Colliers suggests the average
vacancy in the Central District was around 5% in December 2005. Given the supply gap in 2006 and 2007
and the expected buoyant demand for office space, Colliers predicts that the average vacancy rate in the
Central District will edge down in view of scarce supply in the Central District but that the degree of
downslide will depend on the number of companies relocating out of the Central District to other areas due
to sharp increases in rental rates in the Central District.
Historical Average Vacancy Rate
                                             Central District Grade A Office Vacancy
    16.0%



    14.0%



    12.0%



    10.0%



     8.0%



     6.0%
                                                                                                                             Average Vacancy Rate
                                                                                                                              (1986 - 2004): 7.1%
     4.0%



     2.0%



     0.0%
              1986


                     1987


                            1988


                                   1989


                                          1990


                                                 1991


                                                        1992


                                                               1993


                                                                      1994


                                                                                  1995


                                                                                         1996


                                                                                                1997


                                                                                                       1998


                                                                                                              1999


                                                                                                                     2000


                                                                                                                            2001


                                                                                                                                     2002


                                                                                                                                               2003


                                                                                                                                                      2004




Source:     Rating and Valuation Department, HKSAR Government
                                                                                                                                      Central
     Period                                                                                                                        Grade A Office
     1986-2004 ********************************************************                                                                      7.1%
     2001 *************************************************************                                                                      8.5%
     2002 *************************************************************                                                                     10.2%
     2003 *************************************************************                                                                     15.2%
     2004 *************************************************************                                                                     10.8%
     2005 *************************************************************                                                                        5%(1)
Source:     Rating and Valuation Department, HKSAR Government (1986-2004)

Note:
(1) Average vacancy rate in December 2005, based on an internal survey undertaken by Colliers.

                                                                             68
                           GRADE A OFFICE MARKET IN HONG KONG AND IN THE CENTRAL DISTRICT

  Rental Growth
      Although the Hong Kong Grade A office sector is expected to see more new supply coming on line in
2007 and 2008, the anticipated effect on the Central District is expected by Colliers to be limited because
new developments are expected by Colliers to be concentrated in non-core areas such as West Kowloon.
Colliers believes that the Central District Grade A market will continue to experience a shortage of new
developments during the period from 2006 to 2010.
     During the current market upswing, the accumulated rental growth in Central Grade A office sector
was 99% between 4Q 2003 and 4Q 2005, based on data from the Rating and Valuation Department of the
HKSAR Government. However, current rental level is only 60% of the peak achieved in 1994.
      The historical average YoY Central Grade A office rental growth between 1986 and 2004 was 5.8%,
based on the average of the YoY rental growth for each of the 76 quarters during such period from data from
the Rating and Valuation Department of the HKSAR Government, and Central Grade A office rental
increased by 50% YoY between 4Q 2004 and 4Q 2005, based on data from the Rating and Valuation
Department of the HKSAR Government. Since the Central District is the hub for the bulk of the companies
engaged in the FIRE sector, Colliers expects that prospective rental upside will be underpinned by the
buoyant finance industries. Colliers believes that even though certain tenants may be driven out of Central
by the increasing rental rates, the demand for Central Grade A office space will still exceed supply,
particularly given that no significant new supply is expected to be available in Central in the foreseeable
future. Central Grade A office rents are therefore predicted by Colliers to increase by 40% YoY between 4Q
2005 and 4Q 2006 and 15% YoY between 4Q 2006 and 4Q 2007. Beyond 2008, Colliers believes that the
long term rental growth trend for Central Grade A office will be in line with the historical annual average
rental growth between 1Q 1986 and 4Q 2004 of 5.8%. Essentially, the prospective rental growth rate of the
Central District Grade A office sector is predicted by Colliers to surpass the average rental growth rate of
the Hong Kong Grade A office sector as a whole.

                                                                                                      Central Grade A Office Rental Index
                                    200



                                    180


                                                                                                                                                                                                                                    40%
                                    160                                                                                                                                                                                           below
                                                                                                                                                                                                                                   1994
        Rental Index (1999 = 100)




                                                                                                                                                                                                                                   peak
                                    140



                                    120



                                    100



                                    80



                                    60



                                    40
                                                                                                                                                                                                                                                    1Q 2006 F#

                                                                                                                                                                                                                                                                 1Q 2007 F#
                                          1Q 1986

                                                    1Q 1987

                                                              1Q 1988

                                                                        1Q 1989

                                                                                  1Q 1990

                                                                                            1Q 1991


                                                                                                        1Q 1992

                                                                                                                  1Q 1993

                                                                                                                            1Q 1994


                                                                                                                                      1Q 1995

                                                                                                                                                1Q 1996

                                                                                                                                                          1Q 1997


                                                                                                                                                                    1Q 1998

                                                                                                                                                                              1Q 1999

                                                                                                                                                                                        1Q 2000


                                                                                                                                                                                                  1Q 2001

                                                                                                                                                                                                            1Q 2002

                                                                                                                                                                                                                      1Q 2003

                                                                                                                                                                                                                                1Q 2004

                                                                                                                                                                                                                                          1Q 2005




Source:                             Rating and Valuation Department, HKSAR Government (1986-2005); Colliers (2006-2007)

Note:

F#:     Forecast by Colliers

                                                                                                                                                 69
          GRADE A OFFICE MARKET IN HONG KONG AND IN THE CENTRAL DISTRICT

      The following table summarizes the historical rental growth rates for Grade A office in the Central
District from 1986-2005 and projected rental growth rates from 2006 to 2007.
                                                                                                              Central
      Period                                                                                               Grade A Office
      Historical Annual Average (1986-2004)(1) ******************************                                    5.8%(2)
      2005 ************************************************************                                          50%(3)
      2006 F# *********************************************************                                          40%(3)
      2007 F# *********************************************************                                          15%(3)
Source:   Rating and Valuation Department, HKSAR Government (1986-2005); Colliers (2006-2007)

Notes:
(1) The highest YoY rental growth during this period for the Central Grade A office market was 72.9% in 1989. The sharpest YoY
       decline during this period for the Central Grade A office market was 30.2% in 1999.
(2) The average of the YoY rental growth for each of the 76 quarters during the period from 1986 to 2004.
(3) Represents the YoY historical or forecasted rental growth, as the case may be, between the fourth quarter of the preceding year
       and the fourth quarter of that year.
F#:     Forecast by Colliers




                                                               70
STRATEGY




   71
                                               STRATEGY

      The Manager’s key objectives for Champion REIT are to provide Unitholders with stable and                 B2(a)/
sustainable distributions per Unit and to achieve long-term growth in the NAV per Unit. The Manager’s           B2(b)/
principal investment strategy is to invest in income-producing office and retail properties in Hong Kong and    B2(c)/
it aims to produce attractive total returns to Unitholders by proactively managing the Property and other       7.1
properties that Champion REIT may acquire in the future, and maintaining a high level of investment
discipline and financial flexibility. The Manager intends to hold the Property for long-term investment
purposes while also seeking yield-enhancing acquisition opportunities. The implementation of the
Manager’s strategy can be broadly categorized as follows:

     (    Asset Management Strategy. The Manager intends to proactively manage the Property to
          maximize rental income, improve occupancy levels, increase tenancy renewal rates and maintain
          a high quality tenant base. The Manager will work closely with both the Property Manager and
          the DMC Manager to drive organic growth and build and maintain strong relationships with
          tenants.

     (    Acquisition Strategy. The Manager intends to seek to selectively acquire additional income-
          producing properties that meet its investment criteria.

     (    Financing Strategy. The Manager intends to strive to employ appropriate debt and equity
          financing policies.

ASSET MANAGEMENT STRATEGY

      In order to maximize returns, the Manager intends to proactively manage the Property to maximize
rental income, improve occupancy levels, increase renewal rates for tenancies, and maintain a high quality
tenant base:

Maximize rental income

      The Manager will seek to maximize rental rates in renewals and new lettings by focusing on
optimizing rental income from each tenancy and leveraging on the low vacancy and tight supply dynamics
of the Hong Kong office market, particularly in the Central District.

      Based on Colliers’ projections of rental growth in the Central District for 2006 and 2007, the Manager
anticipates favorable rental income growth in 2006 and 2007 for the Property, driven by the lease of vacant
space, the replacement or renewal of expiring tenancies which were entered into during the market low in
2003 and 2004, with new tenancies at higher rental rates as well as renegotiation of rental rates of existing
tenants in accordance with rent review arrangements.

Improve occupancy levels

      The Manager believes that Champion REIT stands to benefit from the lease of vacant space as the
Property’s occupancy rate still remains below the overall occupancy rate in the Central District, which stood
at approximately 95% in December 2005, based on an internal survey undertaken by Colliers, as compared
to 86.1% for office space of the Property as of February 28, 2006. The Property is well-positioned to take
advantage of any continued favorable supply/demand dynamics in the next several years to attract new, high
quality tenants looking for prime office space in the Central District.




                                                     72
                                                 STRATEGY

Increase renewal rates for tenancies

      The Manager aims to maintain and improve the renewal rates for tenancies of the Property, which was
50.1% as measured by the expired leased area renewed for the year ended December 31, 2005. The
Manager believes that renewal of tenancies with existing tenants offer various benefits as compared to new
lettings, including:

      (    minimization of rental losses due to downtime; and

      (    lower fitting out expenses, landlord provisions and lease agency fees incurred for renewal of
           tenancies.

     As such, the Manager intends to build and maintain strong relationships with tenants and proactively
address their ongoing needs. In addition, where appropriate, it will seek to advance lease negotiations with
tenants whose tenancies are about to expire to maximize rental income.

Maintain a high quality tenant base

      The Manager aims to continually evaluate tenant quality and focus on maintaining a high quality
tenant base to ensure stability of rental income. Moreover, the Manager intends to actively manage tenancy
expiries to identify opportunities to improve tenant mix.

ACQUISITION STRATEGY

      The Manager intends to seek to capitalize on acquisition opportunities primarily in the Hong Kong
office and retail property sector that provide attractive yields and the potential for net asset growth. In
evaluating acquisition opportunities, the Manager will focus on the following investment criteria:

      (    Yield accretion. The Manager will seek to acquire properties that would enhance its overall
           distribution yield to the Unitholders.

      (    Occupancy and tenant characteristics. The Manager will seek to acquire properties with
           strong existing or potentially higher rental and tenant retention rates relative to competing
           properties in their respective markets. In addition, the quality of the tenants will be evaluated in
           order to estimate delinquency probability. Rental rates and occupancy trends will also be assessed
           prior to the acquisition of new properties.

      (    Location. The Manager will examine properties for convenient access to major roads and
           public transportation.

      (    Value-adding opportunities. The Manager may seek to acquire properties where there is
           potential to improve value through proactive property management. Opportunities to add value
           through selective renovation or other enhancements will also be assessed.

      (    Building and facilities specifications. The Manager will examine specifications such as
           compliance with building and zoning codes, as well as the size and age of the buildings. The
           Manager will also evaluate building conditions and expected levels of capital expenditure in the
           short- to medium-term.

     The Manager has no current plans for Champion REIT to acquire any properties in the 12-month
period from the Listing Date, but may do so if opportunities arise that are in line with its acquisition strategy
and that meet its investment criteria.

                                                       73
                                                STRATEGY

FINANCING STRATEGY

    The Manager aims to optimize the capital structure and cost of capital of Champion REIT by using a            B2(j)
combination of debt and equity to fund future acquisitions and other property-related capital expenditures.

      The REIT Code limits Champion REIT’s external debt to 45% of its total gross asset value. Upon              7.9
completion of the Global Offering, Champion REIT is expected to have aggregate external borrowings of
HK$7,000 million, or 28.8% of Champion REIT’s total gross asset value as of the Listing Date (based on
the information in the section headed ‘‘Unaudited Pro Forma Balance Sheet’’ in this Offering Circular). In
addition to the limitation contained in the REIT Code, Champion REIT must comply with certain financial
ratios and restrictive covenants under its loan agreements. For further information with regard to these
financial ratios and restrictive covenants, see the section headed ‘‘Material Agreements and Other
Documents Relating to Champion REIT — The Facility’’ in this Offering Circular.

      The Manager also intends to adopt a hedging strategy to manage the risks associated with changes in
interest rates relating to its borrowings. The New Property Companies have entered into interest rate swap
arrangements for a total notional amount equivalent to the amount of the term loan under the Facility. In
addition to its debt strategy, the Manager intends to capitalize on opportunities that may arise to raise
additional equity capital for Champion REIT through the issue of additional Units, if Champion REIT has
an appropriate use for such proceeds.

POTENTIAL BUSINESS COMPETITION WITH GREAT EAGLE

      There may be circumstances where Champion REIT competes directly with Great Eagle and/or its                8.3(a)
subsidiaries or associates for acquisitions or disposals of properties as well as for tenants within the Hong
Kong market as Great Eagle, its subsidiaries and associates are engaged in and/or may engage in, amongst
other things, investment in, and the development and management of, properties in the office, retail,
residential and hotel sectors in Hong Kong and elsewhere. See the sections headed ‘‘Corporate
Governance — Conflicts of Interests and Business Competition with Great Eagle’’ and ‘‘Overview of Great
Eagle Holdings Limited, Kerry Properties Limited and Wing Tai Corporation Limited — Overview of Great
Eagle’’ in this Offering Circular.

      The Manager has no current intention for Champion REIT to acquire any of the related businesses or          8.3(c)
properties of Great Eagle or its subsidiaries or associates, but may do so in the future if such acquisition is
in line with its acquisition strategy and meets its investment criteria.




                                                      74
THE PROPERTY AND BUSINESS




           75
                                   THE PROPERTY AND BUSINESS

OVERVIEW                                                                                                           B2(c)/
                                                                                                                   B2(d)/
     Champion REIT is a real estate investment trust formed primarily to own and invest in an income-
                                                                                                                   B2(i)
producing portfolio of office and retail properties in Hong Kong. Its key objectives are to provide
Unitholders with stable and sustainable distributions and to achieve long-term capital growth.
      Champion REIT offers investors direct exposure to a prime Grade A office property in the premier
CBD in the core Central District in Hong Kong, which is the banking and financial center in Hong Kong
and one of the most important commercial hubs in Asia. Champion REIT will initially invest in and own the
Property, which comprises 91.5% of the Gross Rentable Area of Citibank Plaza and substantially all of the
parking spaces at Citibank Plaza. Citibank Plaza is a modern glass and steel office complex that comprises
Citibank Tower, a 47-storey building, and ICBC Tower, a 37-storey building, and includes a retail podium
and a carpark. It is located at 3 Garden Road, Central, near the intersection of Garden Road and Queen’s
Road Central, which is part of the hub of banking and financial activities in the Central District. It is within
close proximity to a wide range of businesses, shops, hotels, restaurants, entertainment and cultural facilities
and Hong Kong’s major public transportation networks and within a few minutes walk of the Central station
of the Mass Transit Railway.
      Citibank Plaza was completed in May 1992 and was awarded the Hong Kong Institute of Architects’
highest award, the Silver Medal, in 1995 in recognition of its architectural design excellence. Citibank
Plaza’s two towers can be joined on each of the top 26 floors of ICBC Tower, excluding the mechanical
floors, and each of these interconnecting floors can be configured to provide a floor plate with Gross
Rentable Area of between approximately 31,000 sq. ft. and 34,000 sq. ft., which is among the largest for
Grade A office space in the Central District in Hong Kong. The Property includes 23 out of 26 of these
floors.
      Citibank Plaza was one of the first ‘‘intelligent’’ office buildings in Hong Kong and its building design
incorporates a fiber-optic backbone wiring system to facilitate inter-floor communications, a satellite master
antenna television system to distribute within the building signals from the building’s satellite receiving
dishes and a computerized building management system in which various systems including the air-
conditioning, fire alarm, lifts and lighting systems are linked to a central computerized control center. The
temperature on each floor is individually monitored and managed by its building management system with
the aid of sensors. The building management system incorporates a direct digital control system that allows
after-office-hours air-conditioning to be provided to specific office spaces of a minimum area of
2,000 sq. ft., with 500 sq. ft. increments. 24-hour air-conditioning with an essential chilled water system is
also available for essential services areas of tenants, such as data centers. The building has standby
generators to provide back-up power supply and essential chilled water for air conditioning to essential
service areas of tenants. Citibank Plaza was also the first building in Hong Kong available for leasing which
incorporated raised flooring throughout its office space to facilitate cabling and wiring requirements to
minimize drilling, disruption and costs involved in rearranging office configurations.
       Citibank Plaza has a total Gross Rentable Area of 1,225,185 sq. ft. of office space and 42,593 sq. ft. of
retail space, as well as 58 private carparking spaces and a public carpark with 500 carparking spaces and
50 motorcycle parking spaces. Of this, the Property has an aggregate Gross Rentable Area of
1,160,227 sq. ft., comprising 1,117,634 sq. ft. of office space and the entire 42,593 sq. ft. of retail space.
The remaining Gross Rentable Area of Citibank Plaza is held by Kerry Properties and the Financial
Secretary Incorporated. The Property also includes 55 out of the 58 private carparking spaces and the entire
public carpark with 500 carparking spaces and 50 motorcycle parking spaces. The Property (excluding the
carpark) has a Total Floor Area of 1,492,526 sq. ft., comprising 1,434,805 sq. ft. of office space and
57,721 sq. ft. of retail space.
      The Property has a high quality tenant base with 81 office and retail tenants under 106 tenancies as of
February 28, 2006, with a majority of Rental Income attributable to tenants in the banking and finance
sectors. The 10 largest tenants (in terms of Rental Income for the month ended February 28, 2006)

                                                      76
                                   THE PROPERTY AND BUSINESS

contributed approximately 69.2% of total Rental Income from the Property for the month ended
February 28, 2006. As of February 28, 2006, the office space in the Property had an occupancy rate of
86.1%, while the retail space in the Property enjoyed a 100% occupancy rate.
     Citibank Plaza is held under a lease from the Government which will expire on June 30, 2047.

COMPETITIVE STRENGTHS
One of the largest Grade A office complexes in the Central District
      Citibank Plaza is one of the largest Grade A office complexes in the Central District, comprising two      B2(d)
high-rise office towers, a retail podium and a carpark. It is strategically located near the intersection of
Garden Road and Queen’s Road Central, the main road through the Central District, and enjoys high levels
of connectivity with public transportation. In particular, the Property is within a few minutes’ walk from the
Central station of the Mass Transit Railway. Furthermore, Citibank Plaza’s two towers can be joined on
26 floors, and each of these interconnecting floors can be configured to provide a floor plate with Gross
Rentable Area of between approximately 31,000 sq. ft. and 34,000 sq. ft., which is among the largest for
Grade A office space in the Central District in Hong Kong. The Property includes 23 out of the
26 interconnecting floors.

Well-maintained property with excellent infrastructure
     Citibank Plaza was designed as one of the first ‘‘intelligent’’ office buildings in Hong Kong, with:
     (    Fiber-optic backbone wiring system to facilitate inter-floor communications;
     (    Raised flooring throughout its office space to facilitate cabling and wiring requirements to
          minimize drilling, disruption and costs involved in rearranging office configurations;
     (    Computerized building management system in which various systems including the air-
          conditioning, fire alarm, lifts and lighting systems are linked to a central computerized control
          center;
     (    Satellite master antenna television system to distribute within the building signals from the
          building’s satellite receiving dishes;
     (    Climate control system to monitor the temperature of each floor with the aid of sensors;
     (    Standby power generators to provide back-up power supply to essential service areas; and
     (    24-hour air-conditioning with an essential chilled water system for essential services areas of
          tenants, such as data centers.
      The Property is well-maintained and is not expected to require any significant capital expenditure by      B2(h)
Champion REIT in the foreseeable future. The Manager believes that Citibank Plaza’s building
specifications are comparable to those of other prime Grade A office buildings in the Central District in
Hong Kong.

High quality tenant base
      The Property has a high quality tenant base with 81 office and retail tenants under 106 tenancies as of
February 28, 2006. These tenants include primarily banks and financial services firms, as well as business
and professional services firms and government and regulatory bodies. Major tenants include multinational
companies such as Barclays Capital Asia Limited, Citibank, N.A., The Hongkong and Shanghai Banking
Corporation Limited, Industrial and Commercial Bank of China (Asia) Limited and Merrill Lynch (Asia
Pacific) Limited. Certain major tenants have long-term tenancies of six years or more, which provides a
high degree of stability for the tenant base.

                                                     77
                                             THE PROPERTY AND BUSINESS

THE PROPERTY

Property Income

         The following table sets forth the various sources of income of the Property for the periods indicated.
                                                                                         Year ended December 31,
                                                                           2003                    2004                    2005
                                                                    (HK$ thousands)         (HK$ thousands)         (HK$ thousands)
Office rental ****************************
                  (1)
                                                                         434,169   (2)
                                                                                                 311,684                 299,162
Retail rental(1) *****************************                            12,974                  11,109                  11,002
Carpark income ***************************                                11,111                   8,321                   9,011
Other income(1) ****************************                               2,185                   6,349                   9,385
Building management fee income(3) ***********                             73,548                  66,126                  72,723
  Rental and building management fee income                              533,987                 403,589                 401,283
Rental related income **********************                               1,966                   2,107                   1,993
  Total **********************************                               535,953                 405,696                 403,276


Notes:
(1)      Fees received in respect of naming rights and signages have been excluded from office rental and retail rental, and included in
         other income.
(2)      Includes compensation of HK$14.3 million received from a tenant for early termination of tenancy.
(3)      Building management fee income in respect of Gross Rentable Area leased is billed and recovered from the tenants based on
         the amount payable under the DMC without any mark-up.

     See the sections headed ‘‘Management’s Discussion and Analysis of Financial Condition and Results
of Operations — Results of Operations — 2005 Compared to 2004 — Rental and Building Management
Fee Income — Rental Income’’ and ‘‘Management’s Discussion and Analysis of Financial Condition and
Results of Operations — Results of Operations — 2004 Compared to 2003 — Rental and Building
Management Fee Income — Rental Income’’ in this Offering Circular for reasons for the decrease in Rental
Income.

Valuation

      The Appraised Value of the Property as determined by the Independent Property Valuer as of
February 28, 2006, the Implied Purchase Price of the Property and the discount to the Appraised Value are
set out in the following table.
                                             Based on the Minimum Offer Price of             Based on the Maximum Offer Price of
                                                          HK$5.00                                          HK$5.75
                                           Implied     Implied Purchase             Implied     Implied Purchase
                        Appraised Value Purchase Price Price per sq.ft. Discount Purchase Price Price per sq.ft. Discount
                        (HK$ millions)    (HK$ millions)         (HK$)                     (HK$ millions)        (HK$)
The Property ****            22,670            19,030           12,750            16.1%        21,064           14,113            7.1%




                                                                   78
                                            THE PROPERTY AND BUSINESS

Occupancy and Effective Rent per Square Foot

     The following table sets forth information on the average occupancy rate of the Property for the
periods indicated:
                                                                                                 Office(1)     Retail(1)     Average(1)(2)
                                                                                                   (%)             (%)           (%)
Year ended December 31, 2003 ***********************************                                  85.2             100.0         85.8
Year ended December 31, 2004 ***********************************                                  78.0             100.0         78.8
Year ended December 31, 2005 ***********************************                                  86.3             100.0         86.8
  1st quarter **************************************************                                  81.8             100.0         82.4
  2nd quarter *************************************************                                   86.3             100.0         86.8
  3rd quarter**************************************************                                   88.9             100.0         89.3
  4th quarter **************************************************                                  88.4             100.0         88.8
Month ended February 28, 2006 **********************************                                  86.1             100.0         86.6

Notes:

(1)      The average occupancy rate over the relevant period is derived by dividing the sum of the occupancy rates as of the beginning
         of each month during the relevant period by the number of months in the relevant period.

(2)      Calculated on a weighted average basis based on the occupancy rates for combined office and retail space.

      The following table sets forth information on the average monthly effective rent per leased square foot
of the Property for the periods indicated:
                                                                                                    Office(1)       Retail(1) Average(1)
                                                                                                     (HK$)           (HK$)       (HK$)
Year ended December 31, 2003 *************************************                                    36.7   (2)
                                                                                                                     25.4         36.3
Year ended December 31, 2004 *************************************                                    30.0           21.7         29.6
Year ended December 31, 2005 *************************************                                    25.8           21.5         25.6
2 months ended February 28, 2006 **********************************                                   28.7           21.8         28.4

Notes:

(1)      The average monthly effective rent per leased square foot over the relevant period is calculated as a simple average of the
         monthly effective rent per leased square foot, which is defined as the monthly effective rental income divided by the leased
         area of the Property during that month. Effective rental income is Rental Income less the fees received in respect of naming
         rights and signages. Leased area is defined as Gross Rentable Area, adjusted for the occupancy rate.

(2)      Excludes compensation of HK$14.3 million received from a tenant for early termination of tenancy.


Tenant Profile

       A majority of the Gross Rentable Area is occupied by tenants in the banking, finance and securities
sectors. Tenants include local and international banks, quasi-government and regulatory bodies, and
financial and professional services firms. As of February 28, 2006, the Property was leased to 81 office and
retail tenants under 106 tenancies, comprising 76 office tenants and five retail tenants.

     The 10 largest tenants of the Property (in terms of Rental Income for the month ended February 28,
2006) accounted for 69.2% of total Rental Income for the month ended February 28, 2006.

      Other than The Hongkong and Shanghai Banking Corporation Limited, which is a connected person
as a result of its relationship with the Trustee, none of the other nine largest tenants are connected persons.

                                                                  79
                                              THE PROPERTY AND BUSINESS

     The following table sets forth information on the 10 largest tenants of the Property in terms of the
Rental Income for the month ended February 28, 2006:
                                                                                                         Percentage of
                                                                                    Gross Rentable      Gross Rentable      Percentage of
Tenant                                                   Initial expiry date(s)          Area                Area           Rental Income
                                                                                        (sq. ft.)             (%)                 (%)
Citibank, N.A. ***********************
                   (1)
                                                          2nd quarter 2007,              43,064                24.0               20.0
                                                          2nd quarter 2010              235,455
Merrill Lynch (Asia Pacific) Limited(2) ****              3rd quarter 2008              131,050                11.3               19.5
Industrial and Commercial Bank of China
  (Asia) Limited(3) ********************                  2nd quarter 2014              107,761                 9.3                8.6
The Hongkong and Shanghai Banking
  Corporation Limited(4) ****************                 1st quarter 2010                41,053                3.5                4.2
The Financial Secretary Incorporated******                1st quarter 2007,                7,225                2.1                4.0
                                                          1st quarter 2009(5)             17,641
Barclays Capital Asia Limited ***********                 3rd quarter 2007                34,224                3.0                3.7
WestLB AG Hong Kong Branch *********                      4th quarter 2008                16,631                1.4                2.6
KGI Hong Kong Limited ***************                     4th quarter 2007                25,556                2.2                2.3
Shenyin Wanguo Enterprises (HK) Limited                   1st quarter 2008                18,761                1.6                2.2
Pacific Century Regional Developments
  (HK) Limited ***********************                    2nd quarter 2007               17,575                 1.5                2.1
Other tenants(6) ************************                                               309,295                26.7               30.8
Vacant space *************************                                                  154,936                13.4                —
Total ********************************                                                1,160,227              100.0              100.0


Notes:
(1)      Subject to a rent review in the second quarter of 2007 with respect to 235,073 sq. ft. of office space.
(2)      In addition, Merrill Lynch (Asia Pacific) Limited entered into a new lease in March 2006 for an additional 6,814 sq. ft. of space
         at the Property for the period from March 1, 2006 to September 30, 2008.
(3)      Subject to rent reviews in the second quarter of 2007 and the second quarter of 2010 with respect to all of its leased area.
(4)      Subject to a rent review in the first quarter of 2008 with respect to all of its leased area and a right by the tenant to terminate
         the tenancy with six months’ notice given on or after September 1, 2007.
(5)      Subject, under certain conditions, to a right by the tenant to terminate the lease with nine months’ notice given on or after
         January 17, 2007 with respect to 17,641 sq. ft. of office space under the tenancy expiring in the first quarter of 2009.
(6)      With respect to the tenancies of other tenants, 7.2% of the total Gross Rentable Area is due to expire between March 1, 2006
         and December 31, 2006, 8.0% is due to expire in 2007, 7.3% is due to expire in 2008, 0.2% is due to expire in 2009, 1.4% is
         due to expire in 2010 and beyond and 2.6% is subject to monthly tenancies. Of these tenancies, four, representing an aggregate
         of 1.4% of Gross Rentable Area, are subject to early termination provisions.

      Citibank, N.A., the single largest tenant as of February 28, 2006, leased an aggregate area of
278,519 sq. ft. and contributed approximately 20.0% of total Rental Income for February 2006. Under the
tenancy agreements with Citibank, N.A., the lease term with respect to 235,455 sq. ft. will initially expire in
the second quarter of 2010, subject to a rent review for 235,073 sq. ft. of the office space in the second
quarter of 2007, and Citibank, N.A. has an option to renew either one or both lots comprising 174,173 sq. ft.
and 61,282 sq. ft. for a further three years until the second quarter of 2013 at market rates. The tenancies
with respect to the remaining 43,064 sq. ft. will expire in the second quarter of 2007 and Citibank, N.A. has
the option to renew each of these tenancies for two further terms of three years each at market rates, until
the second quarter of 2013.
      The table below sets forth the mix of the office tenants of the Property by their principal nature of
business, as a percentage of Gross Rentable Area and total Rental Income for the month ended February 28,
2006. As indicated in the table, tenants from the financial services industry (including banking, finance and
securities) represent the largest group of tenants, accounting in the aggregate for 80.7% of the total Rental

                                                                     80
                                   THE PROPERTY AND BUSINESS

Income and 82.2% of the total leased area for such period. The other tenants comprise primarily
government, consulate, quasi-government and regulatory bodies, and professional firms.
                                                                           Percentage of Gross   Percentage of
Industry Sector                                                              Rentable Area       Rental Income
                                                                                   (%)                (%)
Banking***************************************************                         62.3               59.5
Finance ***************************************************                        12.9               14.4
Securities *************************************************                        7.0                6.8
Others ****************************************************                        17.8               19.3
Total *****************************************************                       100.0              100.0

      Connected persons occupied approximately 6.3% of the Property’s Gross Rentable Area and
contributed 6.0% of total Rental Income for the month ended February 28, 2006. Details of the relevant
tenancies are as follows:

     (a)    30,517 sq. ft. of retail space has been leased on a monthly tenancy to Strong Dynamic Limited,
            a wholly-owned subsidiary of Great Eagle, which operates a fitness center and spa on the
            premises. The rent per sq. ft. with respect to such premises is significantly lower than the
            average rent for the rest of the Property because most of that space is not office space and is not
            suitable for use as either office or normal retail space without major structural alterations,
            including the decking of the swimming pool and removal of the pool filtration plant and
            plumbing systems for the sauna and steam rooms, which would involve significant additional
            capital expenditure.

     (b)    1,853 sq. ft. of office space was leased to the DMC Sub-manager for use as the building
            management office. In order to accommodate an adjoining tenant’s requirement for additional
            space, the existing tenancy to the DMC Sub-manager was terminated on April 30, 2006 and a
            new tenancy for 1,901 sq. ft. of alternative office space in the Property was entered into for a
            term from May 1, 2006 to September 15, 2007.

     (c)    41,053 sq. ft. of office spaced has been leased to The Hongkong and Shanghai Banking
            Corporation Limited, which expires in the first quarter of 2010 and is subject to a rent review in
            the first quarter of 2008 with respect to all of its leased area and a right by the tenant to
            terminate the tenancy with six months’ notice on or after September 1, 2007.

     Each of these tenancies has been transacted on normal arm’s length commercial terms.

      Merrill Lynch (Asia Pacific) Limited, an affiliate of the Sole Global Coordinator, and Citibank, N.A.,
an affiliate of Citigroup Global Markets Asia Limited, one of the Joint Lead Underwriters, are both among
the top five tenants of the Property. The tenancies for such tenants have been transacted on normal arm’s
length commercial terms.

Expiries, Renewals and Rent Reviews

      Lease terms for the Property generally range from two to three years, which reflects the general
practice in the Hong Kong property market for office tenancies. As of February 28, 2006, 93.5% of the
tenancy agreements, in terms of leased area, were for terms of at least two years. Certain major tenants are
granted options to renew their tenancies at expiry, based on prevailing market rates at the time of renewal.
The tenancy agreements do not generally give tenants the right to terminate their tenancies prior to their
scheduled expiration dates, although certain tenancies permit tenants to terminate part or all of the leased
premises with notice of various periods after a certain period.

                                                      81
                                             THE PROPERTY AND BUSINESS

      The following table sets forth information in respect of the Property on office tenancies that have
expired and those that have been renewed with the existing tenants during the periods indicated:
                                                      Number of      Gross   Number of                      Renewal
                                                        tenants    Rentable tenants with Renewed Renewal    rate by
                                                          with      Area of    expired    Gross    rate by  expired
                                                        expired     expired   tenancies  Rentable number of leased
                                                      tenancies(1) tenancies   renewed    Area     tenants   area
                                                                      (sq. ft.)                    (sq. ft.)         (%)           (%)
2003*****************************                            21       204,263          14          114,770           66.7          56.2
2004*****************************                            19       500,685          10          283,243           52.6          56.6
2005*****************************                            26       195,473          17           97,878           65.4          50.1
For the two months ended February 28,
  2006***************************                             4          29,225          3          27,408           75.0          93.8
                                                                                                                           (2)
Total/Average*********************                           70       929,646          44          523,299           62.9          56.3(3)

Notes:
(1)      Tenancies which were terminated early have been included as expired tenancies.
(2)      Calculated by dividing (a) the total number of tenants with expired tenancies renewed in 2003, 2004, 2005 and two months
         ended February 28, 2006 by (b) the total number of tenants with expired tenancies during such period.
(3)      Calculated by dividing (a) the total renewed Gross Rentable Area in 2003, 2004, 2005 and two months ended February 28,
         2006 by (b) the total Gross Rentable Area of expired tenancies during such period.

      The following table sets forth details of expiries in respect of tenancies as of February 28, 2006 which
are scheduled to take place during the periods indicated:
                                                                     Expiring         Monthly                                Percentage
                                             Gross                tenancies as a        Rental      Average monthly           of Rental
                              Number of Rentable Area             percentage of      Income of       effective rent          Income of
                               tenancies  of tenancies              total Gross       tenancies       for tenancies           tenancies
Period                        expiring(1)   expiring              Rentable Area      expiring(2)        expiring             expiring(3)
                                                 (sq. ft.)               (%)           (HK$)          (HK$/sq. ft.)              (%)
2006 (March 1 to
  December 31) ***                  22            83,438                  7.2        1,968,231             23.6                    6.8
2007 *************                  41           219,896                 18.9        6,774,483             30.8                   23.4
2008 *************                  28           251,721                 21.7       10,045,570             39.9                   34.7
2009 *************                   3            19,458                  1.7          905,971             46.5                    3.1
2010 and beyond ***                 11           400,261                 34.5        8,798,155             22.0(4)                30.4
Monthly tenancies(5)                 1            30,517                  2.6          427,600             14.0                    1.5
Vacant space ******                 —            154,936                 13.4               —               —                      —
Total/Average *****               106          1,160,227              100.0         28,920,010             24.9(6)               100.0

Notes:
(1)      Assuming any option to renew is not exercised.
(2)      Rental Income in respect of tenancies expiring for the respective periods is calculated on the basis of aggregate Rental Income
         payable under the tenancies expiring for the month ended February 28, 2006.
(3)      Calculated as a percentage of the total Rental Income for the month ended February 28, 2006.
(4)      All of the leases expiring in 2010 and beyond (except with respect to 382 sq. ft.) are subject to rent review in 2007 or 2008.
(5)      Represents a tenancy for Strong Dynamic Limited, a wholly-owned subsidiary of Great Eagle, which operates a fitness center
         and spa on the premises.
(6)      Calculated by dividing (a) the total monthly Rental Income of tenancies expiring by (b) the total Gross Rentable Area of
         tenancies expiring.

                                                                    82
                                             THE PROPERTY AND BUSINESS

      The following table sets forth details of tenancies scheduled for rent review as of February 28, 2006,
for the periods indicated:
                                                                                                                     Tenancies
                                                                                                Gross Rentable    subject to rent
                                                                                 Number of           Area           review as a
                                                                                  tenancies      of tenancies      percentage of
                                                                                  subject to    subject to rent     total Gross
Period                                                                           rent review        review        Rentable Area
                                                                                                    (sq.ft.)           (%)
2006 (March 1 to December 31) **********************                                    —               —               —
2007 *********************************************                                       8(1)      342,834(2)          29.5
2008 *********************************************                                       3          57,045              4.9
2009 *********************************************                                      —               —               —
2010 and beyond ***********************************                                      3         107,761              9.3

Notes:
(1)      Three of the eight leases are subject to a second rent review in 2010 and beyond.
(2)      Excludes 382 sq. ft. of a certain lease which is not subject to rent review.

Delinquency Rates
    No write-offs or provisions for unpaid rents were made in the three years ended December 31, 2005.
However, there is no assurance that there will not be delinquencies in future periods.

Marketing and Leasing Activities
      The Property Manager has a dedicated marketing team which seeks to identify suitable tenants. The
Property is also marketed through property agents, including entities affiliated with Great Eagle and third
party property agents. Property agents are regularly updated with information relating to available space.

Tenancy Agreements and Tenancy Management
      The tenancy agreements entered into for the Property are generally for terms ranging from two to three
years, depending on factors such as the needs of tenants. Longer lease terms of up to 10 years are sometimes
granted for larger premises or where it is necessary for a prospective tenant to incur a significant initial
capital expenditure but subject to a periodic rent review (generally every three years) at prevailing market
rates. Most tenancies have been fixed for terms with no option to renew, although some of the Property’s
large tenants have an option to renew their tenancies for additional terms at prevailing market rates.
      Tenancies that provide for rent reviews or renewal options at prevailing market rates require the
landlord and the tenant to agree on the market rent for the new rent period. If the parties fail to agree on the
new rent by a pre-set date, typically one or two months before the commencement of the new rent period,
the matter is required to be referred to an independent valuer to be agreed and appointed by the landlord and
the tenant. Failing an agreement, either party may ask a designated independent third party to appoint a
valuer to act as an expert (and not an arbitrator) to determine the market rent for the new rent period. Each
party has the opportunity to make representations to the valuer. The valuer’s determination is final and
binding on the landlord and the tenant.
       At the time of entering into a tenancy, tenants of the Property are required to provide a security
deposit of approximately two or three months’ rent, as well as building management fees and Government
rates, in cash or in the form of a bank guarantee in lieu of cash. Security deposits are unsecured and do not
bear interest. Tenants generally are required to pay their monthly rent in advance. Consistent with market
practice, rent-free periods, varying depending on market conditions, are commonly granted on tenancies.

                                                                   83
                                    THE PROPERTY AND BUSINESS

      Under the tenancies, tenants are normally responsible for payment of outgoings including utilities and
building management fees and Government rates, while the landlord is responsible for payment of
Government rent. Tenants are generally also responsible for repairing, and the payment of all other expenses
relating to the interior of the premises, while the landlord is generally responsible for repairing the exterior
and/or the main structure. In the event that the premises or a substantial part of it is rendered unfit for use or
totally inaccessible by force majeure or by any cause other than the direct or indirect result of the negligence
or fault of the tenants, the tenants are usually entitled to rent abatement after expiration of the then current
month until the premises shall again be rendered fit for occupation. Tenants are generally not permitted to
assign or sublet the premises, except in certain cases where assignment or subletting to entities within the
same group is permitted.
     The majority of tenancies do not give tenants the right to terminate their tenancies prior to the
scheduled expiration dates. A limited number of tenancies permit tenants to terminate the tenancies with
respect to part or all of the leased premises by notice after a certain period. The landlord has the right to
terminate tenancies upon the occurrence of certain events, such as non-payment of rent or breach of
covenants by the tenants. The tenants are required under the tenancies to use the leased premises for the
purposes allowed under the Government Grant and the occupation permit of Citibank Plaza.
     In addition, there are two tenants that have entered into agreements for certain signage rights. These
agreements expire in 2010 and 2014, respectively.

Five Year Transaction History                                                                                        B2(g)

      Two sale and purchase agreements were entered into on June 22, 2001 by Accumate Assets Limited, a
wholly-owned subsidiary of Great Eagle, for the acquisition from a wholly-owned subsidiary of Citibank,
N.A. of the entire issued share capital of two companies which indirectly and in aggregate owned the 39th to
50th floors of Citibank Tower (with Total Floor Area of 261,178 sq. ft.) and retail shop number 5 (with Total
Floor Area of 382 sq. ft.), and 15 private carparking spaces. The consideration for the acquisition was
approximately HK$1,943 million. Citibank, N.A. is an independent third party who is not a connected
person of Champion REIT, Great Eagle, the Manager or the Trustee.
      On April 26, 2006, the Trustee, as trustee of Champion REIT, entered into the Reorganization
Agreements with the relevant Vendor Companies pursuant to which the Trustee acquired the Holding
Company Shares from the relevant Vendor Companies. The Holding Companies together indirectly own the
entire legal and beneficial interest in the Property. For further details of the Reorganization Agreements, see
the section headed ‘‘Material Agreements and Other Documents Relating to Champion REIT —
Reorganization Agreements’’ in this Offering Circular.
      The land searches conducted on April 26, 2006 do not show any sale and purchase transactions
relating to the Property in the five years prior to the date of the searches, and other than disclosed above, the
Manager is not aware of any transactions involving a direct or indirect sale and purchase of the Property
during such period.

Competition                                                                                                          B2(d)

      The office property market in Hong Kong is highly competitive. Principal competitive factors include
rental rates, quality of the building, prestige and location of properties, availability of nearby amenities and
supply of comparable office space. The Property competes primarily with other Grade A office buildings in
Hong Kong’s Central District, including office space in Cheung Kong Center, One, Two and Three
Exchange Square, One and Two ifc, The Landmark, One and Two Pacific Place and the Bank of China
Tower. In addition, new supply, primarily outside the Central District, is anticipated to come on the market
between 2006 and 2008. This new supply includes York House in the Central District, Millennium City 6 at
Kwun Tong Road, 16 Westlands Road in Quarry Bay, International Commerce Centre in West Kowloon and
NKIL 6268 at Kowloon Bay.

                                                       84
                                   THE PROPERTY AND BUSINESS

Insurance                                                                                                         B2(m)

      Champion REIT has insurance for the Property that the Manager believes is consistent with industry
practice in Hong Kong. This includes comprehensive property insurance (including insurance against fire
and flood and providing coverage for the reinstatement value of the Property), business interruption
insurance for at least 24 months, and public liability insurance. There are no significant or unusual excess or
deductible amounts required under such policies. There are, however, certain types of risks that are not
covered by such insurance policies, including losses resulting from wars, nuclear contamination,
earthquakes, infectious or contagious diseases and acts of terrorism.

Litigation

     None of Champion REIT, the Manager, the Property Manager, the DMC Manager, the DMC Sub-
manager nor any of the Group 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 Champion REIT, the
Manager, the Property Manager, the DMC Manager, the DMC Sub-manager or any of the Group
Companies.

Legal and Regulatory Compliance

      Champion REIT will be subject to, among other applicable laws and regulations, the Lifts and
Escalators (Safety) Ordinance, the Buildings Ordinance, and the Fire Services Ordinance. The DMC
Manager will be responsible for ensuring all lifts and escalators at the Property comply with the Lifts and
Escalators (Safety) Ordinance. If Champion REIT wishes to make alterations or additions to its properties, it
must submit its proposals to the Buildings Department for prior approval under the Buildings Ordinance.
The Fire Services Ordinance requires owners of any fire service installation or equipment which is installed
in any premises to keep such fire service installation and equipment in efficient working order at all times
and have such installation and equipment inspected by a registered contractor at least once every 12 months.

Environmental Matters

      Champion REIT’s operations are subject to various environmental laws. Historically, the Property has
operated, and going forward the Manager will continue to manage the Property, in compliance with
applicable environmental laws and regulations. Neither the Property Companies nor the Vendor Companies
has ever received any fines or penalties associated with the breach of any environmental laws and
regulations.




                                                      85
FINANCIAL INFORMATION AND FORECASTS




                86
                             SELECTED FINANCIAL INFORMATION


       The following table sets forth selected financial information on a combined historical basis for
  the Group Companies.
       The selected historical combined income statements and combined cash flow statements data for
  each of the years ended December 31, 2003, 2004 and 2005 and the combined balance sheets data as
  of December 31, 2003, 2004 and 2005 have been derived from the Group Companies’ audited
  combined financial information and related notes thereto, which have been included in Appendix I to
  this Offering Circular. These audited combined financial information and the related notes thereto
  have been prepared in accordance with Hong Kong GAAP and have been audited by Deloitte Touche
  Tohmatsu, independent auditors.
       The selected historical combined financial information for the Group Companies included below
  and set forth in Appendix I to this Offering Circular is not indicative of Champion REIT’s future
  performance. You should read the following selected financial information together with the sections
  headed ‘‘The Property and Business’’, ‘‘Management’s Discussion and Analysis of Financial
  Condition and Results of Operations’’, ‘‘Certain Factors Affecting Future Results of Operations and
  Financial Condition’’ and ‘‘Unaudited Pro Forma Balance Sheet’’ in this Offering Circular and the
  historical combined financial information of the Group Companies and related notes thereto set forth
  in Appendix I to this Offering Circular.

                                                                            Year ended December 31,
                                                                     2003           2004              2005
                                                                               (HK$ thousands)
Combined income statements data:
Rental and building management fee income
   Rental Income **************************************             449,328        329,142          319,549
   Carpark income *************************************              11,111          8,321            9,011
   Building management fee income***********************             73,548         66,126           72,723
Total rental and building management fee income ***********         533,987        403,589          401,283
Rental related income **********************************              1,966          2,107            1,993
Rental related outgoings ********************************          (120,567)      (111,398)        (116,998)
Net rental income *************************************             415,386        294,298          286,278
Other operating income *********************************                770            104              109
Fitting out works of investment properties written off ********          —          (2,148)          (1,746)
Administrative expenses ********************************               (416)          (434)            (569)
(Decrease) increase in fair value of investment properties *****   (494,000)     1,988,859       11,925,276
Finance costs *****************************************            (101,183)       (63,450)         (88,242)
(Loss) profit before taxation *****************************        (179,443)     2,217,229       12,121,106
Taxation *********************************************              (49,956)      (381,988)      (2,095,810)
(Loss) profit for the year********************************         (229,399)     1,835,241       10,025,296
Attributable to
  Unitholders of the trust ******************************* (201,976)             1,648,435        8,973,397
  Minority interests ************************************   (27,423)               186,806        1,051,899
                                                           (229,399)             1,835,241       10,025,296




                                                   87
                             SELECTED FINANCIAL INFORMATION

                                                                             As of December 31,
                                                                  2003             2004               2005
                                                                              (HK$ thousands)
Combined balance sheets data:
Non-current assets
  Investment properties *******************************         8,763,000       10,752,500        22,670,000
  Amounts due from fellow subsidiaries *****************           72,638           72,642                —
     Total non-current assets ***************************       8,835,638       10,825,142        22,670,000
Current assets
  Accounts receivable, deposits and prepayments **********        15,860            28,119           48,488
  Amounts due from fellow subsidiaries *****************          35,019            29,537          111,118
  Tax prepaid ***************************************                 —              3,534            4,847
  Pledged bank deposits ******************************             3,600             3,604            3,690
  Cash at bank**************************************               1,092             3,561            3,606
     Total current assets*******************************          55,571            68,355          171,749
Current liabilities
  Accounts payable and accruals ***********************            15,069           18,411             6,842
  Deposits received **********************************             64,698           61,362            75,258
  Amounts due to fellow subsidiaries *******************            9,517           15,641         2,096,879
  Provision for taxation*******************************             5,569               —              9,562
     Total current liabilities ****************************        94,853           95,414         2,188,541
Net current liabilities *********************************         (39,282)         (27,059)       (2,016,792)
Total assets less current liabilities ***********************   8,796,356       10,798,083        20,653,208
Non-current liabilities
  Deferred taxation **********************************            862,045        1,213,890         3,282,381
  Amounts due to fellow subsidiaries *******************        2,424,021        2,238,662                —
     Total non-current liabilities ************************     3,286,066        3,452,552         3,282,381
Net assets ******************************************           5,510,290        7,345,531        17,370,827
Issued equity****************************************              859                 859               859
Retained profits ************************************* 4,878,245                 6,526,680        15,500,077
Amounts attributable to unitholders of the trust************ 4,879,104           6,527,539        15,500,936
Minority interests ************************************        631,186             817,992         1,869,891
                                                             5,510,290           7,345,531        17,370,827

                                                                            Year Ended December 31,
                                                                    2003            2004              2005
                                                                                (HK$ thousands)
Combined cash flow statements data:
Net cash from operating activities ************************ 270,825                190,612           160,280
Net cash from (used in) investing activities *****************     724              (2,784)           (3,548)
Net cash used in financing activities ********************** (326,644)            (185,359)         (156,687)
(Decrease) increase in cash and cash equivalents ************  (55,095)              2,469                45
Cash and cash equivalents at the beginning of the year *******  56,187               1,092             3,561
Cash and cash equivalents at the end of the year representing
  cash at bank ****************************************          1,092               3,561             3,606


                                                  88
                      MANAGEMENT’S DISCUSSION AND ANALYSIS OF
                   FINANCIAL CONDITION AND RESULTS OF OPERATIONS


      You should read the following discussion in conjunction with the Group Companies’ audited
  combined financial information and notes thereto included in Appendix I to this Offering Circular.


BASIS OF DISCUSSION AND PRESENTATION
      Champion REIT, which only acquired the Holding Companies on completion of the Reorganization
on April 26, 2006, has no operating history. The Manager has therefore set forth below a discussion of the
historical combined operating results of the Group Companies as of and for the years ended December 31,
2003, 2004 and 2005.
       The combined income statements and combined cash flow statements for the years ended
December 31, 2003, 2004 and 2005 and the combined balance sheets as at December 31, 2003, 2004 and
2005 have been prepared based on the audited financial statements or management accounts of the Group
Companies on the basis described below. The combined income statements and combined cash flow
statements for the years ended December 31, 2003, 2004 and 2005 include the income statements and cash
flow statements of the Group Companies as if those companies had been controlled entities of Champion
REIT throughout those periods or since their dates of incorporation, whichever is shorter. Fuscastus
Limited, Harvest Star Limited and their respective subsidiaries, Shine Hill Development Limited and Maple
Court Limited, were accounted for as 85.93% owned controlled entities during the relevant periods and the
remaining 14.07% interest in these controlled entities was acquired by Champion REIT from non-related
parties subsequent to December 31, 2005. The other subsidiaries were accounted for as wholly-owned
controlled entities during the relevant periods. The combined balance sheets as at December 31, 2003, 2004
and 2005 have been prepared to present the assets and liabilities of the Group Companies as if the current
structure had been in existence as of those dates, except for the 14.07% equity interests owned by non-
related parties in Fuscastus Limited, Harvest Star Limited and their respective subsidiaries, Shine Hill
Development Limited and Maple Court Limited, in the relevant periods which were acquired by Champion
REIT subsequent to December 31, 2005. The financial information has been prepared on a going concern
basis.
      After the Listing Date, there will be certain changes to Champion REIT’s cost structure, level of
indebtedness and operations. The cost structure of Champion REIT after the Listing Date will differ in
certain significant respects from the historical cost structure of the Group Companies. For example, certain
historical costs of the Group Companies will no longer be costs of Champion REIT. Similarly, there are
certain costs, such as the Manager’s, Property Manager’s and Trustee’s fees, that will be costs of Champion
REIT going forward that were not costs of the Group Companies historically. Further, the presentation
format of Champion REIT’s financial information may differ from that of the audited financial information
set forth in Appendix I to this Offering Circular. For a discussion of the primary income items and other
financial statement items of the Group Companies that may be affected by the Reorganization and the
Global Offering, see the section headed ‘‘Certain Factors Affecting Future Results of Operations and
Financial Condition’’ in this Offering Circular.

PRINCIPAL ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY
      For a discussion of the principal accounting policies and key estimations on significant assets which
management has made that have the most significant effect on the amounts recognized in the financial
statements, please refer to Notes 2 and 3 of Section A of the accountant’s report of the Group Companies
set out in Appendix I to this Offering Circular.




                                                    89
                            MANAGEMENT’S DISCUSSION AND ANALYSIS OF
                         FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FACTORS AFFECTING RESULTS OF OPERATIONS
      The major factors affecting Champion REIT’s results of operations and financial condition include the
following.

Rental and Occupancy Rates
    Champion REIT’s Rental Income depends principally on the rental rates the Property is able to
command and the occupancy rates it is able to maintain.
     Factors affecting the rental rates for tenancies include the effect of competing properties, tenant size,
assumed tenant retention rates on expiry of the tenancy, market conditions and general macroeconomic and
supply/demand trends affecting the real estate market in Hong Kong including inflation rates, tenant
demand levels and occupancy rates.
     In addition to general macroeconomic and supply/demand trends affecting the real estate market in
Hong Kong, occupancy rates depend on rental rates relative to other competing properties and the ability to
minimize downtime arising from lease expiries or early terminations.
      The following table sets forth information on the average monthly effective rent per leased sq. ft.
derived from the Property for the periods indicated:
                                                                                            Average monthly effective rent per
                                                                                                     leased sq. ft.
                                                                                          Office(1)       Retail(1)      Average(1)
                                                                                           (HK$)           (HK$)           (HK$)
Year ended December 31, 2003 ******************************                                  36.7 (2)
                                                                                                             25.4            36.3
Year ended December 31, 2004 ******************************                                  30.0            21.7            29.6
Year ended December 31, 2005 ******************************                                  25.8            21.5            25.6


Notes:
(1)      The average monthly effective rent per leased square foot over the relevant period is calculated as a simple average of the
         monthly effective rent per leased square foot, which is defined as the monthly effective rental income divided by the leased
         area of the Property during that month. Effective rental income is Rental Income less the fees received in respect of naming
         rights and signages. Leased area is defined as Gross Rentable Area, adjusted for the occupancy rate.
(2)      Excludes compensation of HK$14.3 million received from a tenant for early termination of tenancy.




                                                                  90
                             MANAGEMENT’S DISCUSSION AND ANALYSIS OF
                          FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The following table sets forth information on occupancy/vacancy rates of office space of the Property
and of Grade A office space in the Central District for the periods indicated. The retail space at the Property
was fully occupied for the years ended December 31, 2003, 2004 and 2005.
                                                                                                                  Average vacancy
                                                  Office space at the Property
                                                             (1)
                                                                                                                     of Grade A
                                        Average occupancy                               Annual average           office space in the
      Year           1st Quarter 2nd Quarter 3rd Quarter 4th Quarter                 occupancy(1) (vacancy)       Central District
                                                                    (in percentages)
2003 *******             85.1            85.4            84.5            85.8               85.2 (14.8)                  15.2(2)
2004 *******             73.6            77.2            80.9            80.4               78.0 (22.0)                  10.8(2)
2005 *******             81.8            86.3            88.9            88.4               86.3 (13.7)                     5(3)


Notes:
(1)      The average occupancy rate over the relevant period is derived by dividing the sum of the occupancy rates as of the beginning
         of each month during the relevant period by the number of months in the relevant period.
(2)      Based on data from the Rating and Valuation Department, HKSAR Government.
(3)      Average vacancy in December 2005, based on an internal survey undertaken by Colliers, and therefore not directly comparable
         to annual average vacancy.

         The occupancy rate for office space of the Property as of February 28, 2006 was 86.1%.
       The average monthly effective rent for office space declined from HK$36.7 per sq. ft. in 2003 to
HK$25.8 per sq. ft. in 2005, while the average occupancy rate for office space declined from 85.1% in the
first quarter of 2003 to 73.6% in the first quarter of 2004, before steadily improving to 88.4% in the fourth
quarter of 2005. The primary reasons for the decline in average effective rent and occupancy rate was the
generally unfavorable rental market in Hong Kong in 2003 and 2004 due to the combined effect of SARS
and significant new supply from Two ifc during the period, as well as the selective leasing strategy adopted
by the Predecessor Property Companies.
      The completion of Two ifc in 2003 generated new supply of 1.5 million lettable sq. ft. and had a major
impact on the Central District office market, especially as it coincided with the onset of SARS. According to
Colliers, Grade A office rental rates for the Central District declined to a 10 year low in the fourth quarter of
2003. The Manager believes that a number of tenancies entered into during such period in other office
buildings included atypical features, such as fixing rents for periods in excess of the market norm of three
years without interim rent revisions and capping reversionary rent rates. For general trend information
relating to Grade A office vacancy and rent rates in the Central District, see the section headed ‘‘Grade A
Office Market in Hong Kong and in the Central District’’ in this Offering Circular.
      As the Predecessor Property Companies then anticipated that there would be no significant new supply
of office space in the Central District for several years after 2004, they adopted a selective leasing strategy
intended to preserve the potential for rental upside. Therefore, during 2003 and 2004, the Predecessor
Property Companies did not focus on maximizing overall occupancy by attracting tenants with lower rents
and atypical features, such as fixing rents for periods in excess of the market norm of three years without
interim rent revisions and capping reversionary rent rates. As a result, the average occupancy rate for office
space at the Property declined significantly from 85.8% in the fourth quarter of 2003 to 73.6% in the first
quarter of 2004 after a number of major tenants moved out of the Property in December 2003 and January
2004. This also resulted in higher vacancy rates of office space in the Property in 2004 and 2005 as
compared to the office vacancy rates in the Central District. In addition, due to the timing of tenancy
expiries, a number of tenancies were entered into or renewed in 2003 and 2004 at relatively low rents based
on then prevailing market conditions. More than 500,000 sq. ft. (or 43% of total Gross Rentable Area) was
renewed throughout 2004. The replacement rental rates achieved in such new leases were generally lower

                                                                   91
                       MANAGEMENT’S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

than the expiring leases, which were mostly entered into in 2001. Such decline was only partially factored
into the average monthly effective rent per leased square foot in 2004 but was fully reflected in the monthly
effective rent per leased square foot in 2005. In 2005, only 195,473 sq. ft. (or 16.8% of total Gross Rentable
Area) was up for renewal, and an additional 131,050 sq. ft. (or 11.3% of total Gross Rentable Area) was up
for rent review in the second half of 2005. As such, the higher rental rate was only captured by a small
proportion of leases and for part of the year in 2005. These factors contributed to the decline in the average
monthly effective rent per leased square foot for office space between 2003 and 2005.
     As the Central Grade A office market began to improve in the first half of 2004 and in 2005, major
new tenants were secured for the Property. The new tenancies retained the standard provisions for rent
reviews every three years and contained no caps on rent rates. Average occupancy rate for office space of the
Property gradually improved and was 88.4% for the fourth quarter of 2005.

Scheduled Lease Expiries and Rent Reviews
      Lease terms for the Property generally range from two to three years, which is in line with the general
practice in the Hong Kong property market for office tenancies. Certain major tenants are granted options to
renew their tenancies at expiry, based on prevailing market rates at the time of renewal. Longer lease terms
of up to 10 years are also sometimes granted for larger premises or where it is necessary for a prospective
tenant to incur significant initial capital expenditure but are subject to a periodic rent review (generally
every three years) at prevailing market rates. As of February 28, 2006, tenancies accounting for
approximately 6.8%, 23.4% and 34.7% of the Property’s total Rental Income for the month ended
February 28, 2006 and comprising approximately 7.2%, 18.9% and 21.7%, respectively, of Gross Rentable
Area of the Property would be up for renewal in the 10 months ending December 31, 2006, in 2007 and in
2008, respectively. Champion REIT’s ability to re-lease expiring space will impact its results of operations.

(Decrease) Increase in Fair value of Investment Properties and Cyclicality
      The annual revaluation of the Property has in the past resulted in significant fluctuations in the results
of operations of the Group Companies, and may in the future result in significant fluctuations in the results
of operations of Champion REIT. Fair value of investment properties decreased HK$494.0 million in 2003
(representing a 5.3% decrease in the fair value of investment properties from December 31, 2002), increased
HK$1,988.9 million in 2004 (representing a 22.7% increase in the fair value of investment properties from
December 31, 2003) and increased HK$11,925.3 million in 2005 (representing a 110.9% increase in the fair
value of investment properties from December 31, 2004). See also Note 3 to the audited combined
accountant’s report of the Group Companies set out in Appendix I to this Offering Circular.
      Property values are affected by, among other factors, supply and demand of comparable properties, the
rate of economic growth in Hong Kong, interest rates, inflation, and political and economic developments in
Hong Kong and the PRC. The Hong Kong property market has historically been cyclical and future cyclical
changes could result in significant fluctuations in fair value of investment properties and Champion REIT’s
operating results. For additional information on the cyclicality of the Hong Kong property market, see the
sections headed ‘‘Grade A Office Market in Hong Kong and in the Central District’’ and ‘‘Risk Factors —
Risks Relating to Investing in Real Estate — Champion REIT is exposed to cyclicality and volatility in the
overall Grade A office rental property market in Hong Kong’’ in this Offering Circular.
     In addition, see the section headed ‘‘Certain Factors Affecting Future Results of Operations and
Financial Condition’’ in this Offering Circular for certain additional factors that will affect future results of
operations.




                                                       92
                           MANAGEMENT’S DISCUSSION AND ANALYSIS OF
                        FINANCIAL CONDITION AND RESULTS OF OPERATIONS

COMPONENTS OF RESULTS OF OPERATIONS

Rental and Building Management Fee Income

     The Group Companies generated rental and building management fee income from (a) Rental Income
from office and retail space; (b) carpark income; and (c) building management fee income from the
Property. The following table sets forth a breakdown of the Group Companies’ rental and building
management fee income for the periods indicated.
                                                                                Year ended December 31,
                                                                  2003                    2004                     2005
                                                          Amount           %       Amount          %        Amount         %
                                                                         (HK$ thousands, except for percentages)
Rental income************************* 449,328(1) 84.1                             329,142        81.5      319,549        79.6
Carpark income ***********************   11,111    2.1                               8,321         2.1        9,011         2.3
Building management fee income ********* 73,548   13.8                              66,126        16.4       72,723        18.1
Total rental and building management fee
  income **************************** 533,987 100.0                                403,589       100.0      401,283       100.0


Note:

(1)     Includes compensation of HK$14.3 million received from a tenant for early termination of tenancy.


      Rental Income

      Rental Income represents the amounts paid by tenants under their tenancies for office and retail space,
and also includes fees received in respect of naming rights and signage space. It also includes any
compensation paid by tenants for early termination of tenancies. Rents paid under tenancies are typically
fixed for two to three years. In addition, consistent with market practice, rent-free periods are commonly
granted on tenancies.

      Rental Income (after taking account of any rent-free periods) is recognized on a straight-line basis
over the term of the tenancy.

      Carpark income

     Carpark income comprises income earned from the operation of the Property’s private carparking
spaces and public carpark. Carpark income is generated on an hourly and monthly basis.

      Building management fee income

      Building management fee income in respect of Gross Rentable Area leased is billed and recovered
from tenants based on the amount payable under the DMC without any mark-up. A tenant is billed the
actual building management fee payable under the DMC based on the area leased to the tenant.

Rental Related Income

     Rental related income consists of surplus on forbearance fee, interest from tenants, forfeiture of
tenants’ deposits and sundry income. Surplus on forbearance fee represents the excess between the actual
amounts received from tenants for reinstatement of the premises and the actual expenses incurred.

                                                               93
                      MANAGEMENT’S DISCUSSION AND ANALYSIS OF
                   FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Rental Related Outgoings
      The Group Companies’ rental related outgoings consisted primarily of (a) building management fee;
(b) carpark operating costs; (c) Government rent and rates; (d) lease agency fee; (e) legal cost and stamp
duty; (f) property miscellaneous expenses; and (g) repairs and maintenance.
     The following table sets forth a breakdown of the Group Companies’ rental related outgoings for the
periods indicated:
                                                                     Year ended December 31,
                                                      2003                    2004                     2005
                                                Amount         %        Amount        %        Amount          %
                                                             (HK$ thousands, except for percentages)
Rental Related Outgoings
  Building management fee *************   83,031              68.9       76,146       68.3      79,810         68.2
  Carpark operating costs ***************  1,313               1.1        1,266        1.1       1,349          1.1
  Government rent and rates*************  15,781              13.1       11,472       10.3      10,913          9.3
  Lease agency fee ********************   17,261              14.3       18,453       16.6      20,072         17.2
  Legal cost and stamp duty*************     688               0.5        1,870        1.7       1,222          1.0
  Property miscellaneous expenses********  1,189               1.0        1,771        1.6         530          0.5
  Repairs and maintenance **************   1,304               1.1          420        0.4       3,102          2.7
Total ******************************** 120,567               100.0      111,398      100.0     116,998        100.0

  Building management fee
      Building management fee represents the management fee paid under the DMC. For leased areas,
building management fee is billed and recovered from tenants based on the amount payable under the DMC
without any mark-up. For vacant space, building management fee is borne by the landlord but a partial
rebate is applicable if a certain minimum portion of a floor is vacant and no air-conditioning is used. The
difference between building management fee paid and building management fee income primarily
represents the building management fee (less any rebate) paid in respect of the vacant space. Historically,
pursuant to the DMC, the building management fee was paid to The Great Eagle Properties Management
Company, Limited, the DMC Sub-manager of the Property, which is a wholly-owned subsidiary of Great
Eagle. See the section headed ‘‘The DMC Manager’’ in this Offering Circular.

  Carpark operating costs
     Carpark operating costs comprised costs relating to the operation of the public carpark.

  Government rent and rates
      Government rent and rates represents (a) Government rent paid under Government Grant, equivalent to
3% per annum of the applicable rateable value of the Property; and (b) the net amount paid (after deducting
amounts recovered from tenants) for Government rates payable in respect of the Property at 5% per annum
of the applicable rateable value of the Property. Government rates in respect of Gross Rentable Area leased
were billed and recovered from the tenants based on the amount payable to the Government without any
mark-up while Government rent was borne by the landlord.

  Lease agency fee
     Lease agency fee comprised primarily the fee paid to The Great Eagle Estate Agents Limited, a
wholly-owned subsidiary of Great Eagle, and outside real estate agents for the lease-out of rental space in

                                                    94
                      MANAGEMENT’S DISCUSSION AND ANALYSIS OF
                   FINANCIAL CONDITION AND RESULTS OF OPERATIONS

the Property, as well as monthly agency fee paid to The Great Eagle Estate Agents Limited for lease
administration services. Historically, lease agency fees included a one-time fee ranging between the
equivalent of one-half month to three months face rent for new leases and the equivalent of one-half month
face rent for renewals. Lease agency fee also included a lease administration fee, payable on a monthly
basis, of between 2% and 4% of the monthly face rent of subsisting tenancies.

  Legal cost and stamp duty
      Legal cost and stamp duty represents legal cost and stamp duty incurred when new tenancies were
entered into.

  Property miscellaneous expenses
     Property miscellaneous expenses comprise advertising, insurance and other miscellaneous expenses.

  Repairs and maintenance
      Repairs and maintenance expenses comprised costs for repairs, maintenance and minor renovations
related to the fitting out of specific units in the Property. Repairs and maintenance expenses are generally
incurred after a unit is vacated and before a new tenant moves in.

Other Operating Income
     Other operating income primarily includes interest income from bank deposits.

Other Expenses
  Fitting out works of investment properties written off
      Historically, costs related to fitting out work were generally capitalized. However, if further capital
investments were made that replaced older investments for specific projects, the costs that were previously
capitalized would be expensed and written off in the income statement.

  Administrative expenses
     The Group Companies’ administrative expenses consisted primarily of audit fees, secretarial fees,
bank charges and valuation fees.

  (Decrease) increase in fair value of investment properties
      Beginning on January 1, 2005, Hong Kong Accounting Standard 40 requires changes in the fair values
of investment properties to be reported in the income statement. Increases or decreases in the fair market
value of the Property are reflected as an income or expense item, as the case may be, in the income
statement. The historical financial statements for the Group Companies as of and for the years ended
December 31, 2003 and 2004 were restated in accordance with Hong Kong Accounting Standard 40. For the
purposes of such restatement, the market valuations of the Property as of December 31, 2003 and 2004, as
determined by a qualified independent property valuer engaged by the relevant Predecessor Property
Companies at the relevant time, were adopted. The fair value of the Property as of December 31, 2005 was
determined by the directors of the relevant Predecessor Property Companies.

  Finance costs
     The Group Companies’ finance costs consisted primarily of interest paid to fellow subsidiaries of
Great Eagle, which were calculated at prevailing market rates on outstanding loan amounts. The interest
charged was based on the external borrowing costs paid by such subsidiaries to external lenders. See

                                                     95
                      MANAGEMENT’S DISCUSSION AND ANALYSIS OF
                   FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Section B of the Accountants’ Report in Appendix I to this Offering Circular for further information on
these related-party borrowings.

  Taxation
      Profits of the Predecessor Property Companies were assessable to Hong Kong profits tax at the
prevailing tax rate, which was 17.5% during the relevant periods. Profits for these purposes were arrived at
after deducting from the gross income (a) all expenses necessarily incurred in earning the income; (b) any
applicable tax allowances; and (c) tax losses brought forward. See the section headed ‘‘Taxation’’ in this
Offering Circular.
      Deferred taxation was provided for all temporary differences between the carrying amounts of assets
and liabilities in the balance sheet and their tax bases, and such temporary differences include
(a) accelerated tax depreciation; (b) changes in fair value in investment properties; and (c) available tax
losses.

RESULTS OF OPERATIONS
      The following discussion of results of operations of the Group Companies should be read in
conjunction with the Group Companies’ audited combined accountant’s report and the accompanying notes
thereto set out in Appendix I to this Offering Circular.

2005 Compared to 2004
  Rental and building management fee income
     Rental and building management fee income decreased by HK$2.3 million, or 0.6%, to
HK$401.3 million for 2005 from HK$403.6 million for 2004. The decrease was primarily due to a decrease
in Rental Income, which was partially offset by an increase in building management fee income and carpark
income, as described below.

     Rental Income
      Rental Income decreased by HK$9.6 million, or 2.9%, to HK$319.5 million for 2005 from
HK$329.1 million for 2004. This was primarily because at the end of 2003 and during the first quarter of
2004, two major tenants moved out of the Property, and replacement tenancies were signed at a lower rental
than the expired ones. This led to the decrease in the average monthly effective rent for office space at the
Property from HK$30.0 per sq. ft. in 2004 to HK$25.8 per sq. ft. in 2005.

     Carpark income
     Carpark income increased by HK$0.7 million, or 8.3%, to HK$9.0 million for 2005 from
HK$8.3 million for 2004. The increase was primarily due to higher utilization level as a result of higher
occupancy rates.

     Building management fee income
     Building management fee income increased by HK$6.6 million, or 10.0%, to HK$72.7 million for
2005 from HK$66.1 million for 2004 primarily as a result of higher occupancy rates.

  Rental Related Income
    Rental related income decreased by HK$0.1 million, or 5.4%, to HK$2.0 million for 2005 from
HK$2.1 million for 2004.

                                                     96
                      MANAGEMENT’S DISCUSSION AND ANALYSIS OF
                   FINANCIAL CONDITION AND RESULTS OF OPERATIONS

  Rental Related Outgoings
      Rental related outgoings increased by HK$5.6 million, or 5.0%, to HK$117.0 million for 2005 from
HK$111.4 million for 2004. The increase was primarily due to an increase in building management fee,
lease agency fee and repairs and maintenance.

     Building management fee
    Building management fee increased by HK$3.7 million, or 4.8%, to HK$79.8 million for 2005 from
HK$76.1 million for 2004 as a result of higher occupancy rates in 2005 and therefore lower building
management fee rebates for the landlord.

     Carpark operating costs
     Carpark operating costs remained stable at HK$1.3 million for 2005 and 2004.

     Government rent and rates
      Government rent and rates are assessed based on rateable value which is in turn determined by
reference to rental rates achieved in the prior calendar year. As the rental rates achieved in 2004 were lower
than those achieved in 2003, the rateable value for 2005 was lower than that for 2004. As such, government
rent and rates decreased by HK$0.6 million, or 4.9%, to HK$10.9 million for 2005 from HK$11.5 million
for 2004. In addition, increased government rates were recovered from tenants due to higher occupancy in
2005 compared to 2004.

     Lease agency fee
    Lease agency fee increased by HK$1.6 million, or 8.8%, to HK$20.1 million for 2005 from
HK$18.5 million for 2004. The increase was as a result of the increase in renewals and new lettings in 2005
compared to 2004.

     Legal cost and stamp duty
      Legal cost and stamp duty decreased by HK$0.6 million, or 34.7%, to HK$1.2 million for 2005 from
HK$1.9 million for 2004. This was primarily due to less stamp duty paid in 2005 as a result of lower total
rental value of tenancies entered into in 2005 compared to 2004.

     Property miscellaneous expenses
     Property miscellaneous expenses decreased by HK$1.2 million, or 70.1%, to HK$0.5 million for 2005
from HK$1.8 million for 2004. The decrease was primarily due to a decrease in advertising expenses.

     Repairs and maintenance
    Repairs and maintenance increased by HK$2.7 million to HK$3.1 million for 2005 from
HK$0.4 million for 2004. The increase was mainly due to more tenancy works for new tenants in 2005
compared to 2004.

  Net rental income
    Net rental income decreased by HK$8.0 million, or 2.7%, to HK$286.3 million for 2005 from
HK$294.3 million for 2004, as a result of the combined effect of the factors described above.

                                                     97
                      MANAGEMENT’S DISCUSSION AND ANALYSIS OF
                   FINANCIAL CONDITION AND RESULTS OF OPERATIONS

  Other operating income

     Other operating income remained stable at HK$0.1 million in 2004 and 2005.

Other Expenses

  Fitting out works of investment properties written off

     Fitting out works of investment properties written off decreased by HK$0.4 million, or 18.7%, to
HK$1.7 million for 2005 from HK$2.1 million for 2004. This write-off was incurred as a result of an
ongoing toilet upgrade program for the Property.

  Administrative expenses

    Administrative expenses increased by HK$0.1 million, or 31.1%, to HK$0.6 million for 2005 from
HK$0.4 million for 2004.

  (Decrease) increase in fair value of investment properties

      Increase in fair value of investment properties was HK$11,925.3 million for 2005 (representing a
110.9% increase in the fair value of investment properties from December 31, 2004) compared to an
increase of HK$1,988.9 million for 2004 (representing a 22.7% increase in the fair value of investment
properties from December 31, 2003). The increase in fair value of investment properties for 2005 was the
result of higher property values in Hong Kong which reflected improving property market conditions.

  Finance costs

     Finance costs increased by HK$24.8 million, or 39.1%, to HK$88.2 million for 2005 from
HK$63.5 million for 2004. The average interest rates applicable increased from 3.1% in 2004 to 4.6% in
2005. The increase was primarily due to higher market interest rates in 2005 compared to 2004 as all of the
loans were on a floating rate basis.

  Taxation

      Taxation increased by HK$1,713.8 million to HK$2,095.8 million for 2005 from HK$382.0 million
for 2004 as a result of increased profit due to the higher revaluation gain. The total amount of taxation was
HK$2,095.8 million for 2005, which comprised HK$27.3 million of Hong Kong profits tax and
HK$2,068.5 million of deferred taxation. This compared to a total taxation of HK$382.0 million for 2004,
which comprised HK$30.1 million of Hong Kong profits tax and HK$351.8 million of deferred taxation.

  (Loss) profit for the year

      Profit was HK$10,025.3 million for 2005 compared to a profit of HK$1,835.2 million for 2004, as a
result of the combined effect of the factors described above.

2004 Compared to 2003

  Rental and building management fee income

     Rental and building management fee income decreased by HK$130.4 million, or 24.4%, to
HK$403.6 million for 2004 from HK$534.0 million for 2003. The decrease was primarily due to a decrease
in Rental Income, carpark income and building management fee income, as described below.

                                                     98
                      MANAGEMENT’S DISCUSSION AND ANALYSIS OF
                   FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    Rental Income

      Rental Income decreased by HK$120.2 million, or 26.7%, to HK$329.1 million for 2004 from
HK$449.3 million for 2003. The decrease was primarily due to a combination of decreased occupancy and
lower average effective rent as a result of adverse market conditions in Hong Kong. In addition, there was a
one-time compensation of HK$14.3 million received from a tenant for early termination of tenancy in 2003.

    Carpark income

      Carpark income decreased by HK$2.8 million, or 25.1%, to HK$8.3 million for 2004 from
HK$11.1 million for 2003. The decrease was primarily due to lower utilization levels of the carpark as a
result of lower occupancy rates.

    Building management fee income

     Building management fee income decreased by HK$7.4 million, or 10.1% to HK$66.1 million for
2004 from HK$73.5 million for 2003 primarily as a result of lower occupancy rates as well as a reduction in
the unit rate of the building management fee in 2004.

  Rental Related Income

    Rental related income increased by HK$0.1 million, or 7.2%, to HK$2.1 million for 2004 from
HK$2.0 million for 2003.

  Rental Related Outgoings

      Rental related outgoings decreased by HK$9.2 million, or 7.6%, to HK$111.4 million for 2004 from
HK$120.6 million for 2003. The decrease was due primarily to a reduction in the amount paid in respect of
building management fee and government rent and rates.

    Building management fee

     Building management fee decreased by HK$6.9 million, or 8.3%, to HK$76.1 million from
HK$83.0 million for 2003 as a result of a reduction in the unit rate of the building management fee and
lower occupancy rates in 2004 (and therefore increased building management fee rebates for the landlord).

    Carpark operating costs

     Carpark operating costs remained stable at HK$1.3 million for 2004 and 2003.

    Government rent and rates

      Government rent and rates decreased by HK$4.3 million, or 27.3%, to HK$11.5 million for 2004 from
HK$15.8 million for 2003 as the rental rates achieved in 2003 were lower than those achieved in 2002, and
therefore the rateable value for 2004 was lower than that for 2003, even though lower amounts of
government rates were recovered from tenants due to lower occupancy in 2004 compared to 2003.

    Lease agency fee

    Lease agency fee increased by HK$1.2 million, or 6.9%, to HK$18.5 million for 2004 from
HK$17.3 million for 2003, as a result of an increase in renewals and new lettings in 2004 compared to 2003.

                                                    99
                      MANAGEMENT’S DISCUSSION AND ANALYSIS OF
                   FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    Legal cost and stamp duty
      Legal cost and stamp duty increased by HK$1.2 million, or 171.8%, to HK$1.9 million for 2004 from
HK$0.7 million for 2003. This was primarily due to more stamp duty paid in 2004 as a result of higher total
rental value of tenancies entered into in 2004 compared to 2003.

    Property miscellaneous expenses
     Property miscellaneous expenses increased by HK$0.6 million, or 48.9%, to HK$1.8 million for 2004
from HK$1.2 million for 2003. The increase was primarily due to an increase in advertising expenses.

    Repairs and maintenance
    Repairs and maintenance decreased by HK$0.9 million, or 67.8%, to HK$0.4 million for 2004 from
HK$1.3 million for 2003. The decrease was mainly due to less tenancy works for new tenants in 2004
compared to 2003.

  Net rental income
    Net rental income decreased by HK$121.1 million, or 29.2%, to HK$294.3 million for 2004 from
HK$415.4 million for 2003, as a result of the combined effect of the factors described above.

  Other operating income
    Other operating income decreased by HK$0.7 million, or 86.5%, to HK$0.1 million for 2004 from
HK$0.8 million for 2003. This was primarily due to lower interest income generated from bank deposits.

  Fitting out works of investment properties written off
      Fitting out works of investment properties written off increased by HK$2.1 million for 2004 from nil
for 2003. This write-off was incurred as a result of an ongoing toilet upgrade program for the Property.

  Administrative expenses
     Administrative expenses remained stable at HK$0.4 million for 2004 and 2003.

  (Decrease) increase in fair value of investment properties
      Increase in fair value of investment properties was HK$1,988.9 million for 2004 (representing a 22.7%
increase in the fair value of investment properties from December 31, 2003) compared to a decrease in fair
value of investment properties of HK$494.0 million for 2003 (representing a 5.3% decrease in the fair value
of investment properties from December 31, 2002). The increase in fair value of investment properties for
2004 was the result of higher property values in Hong Kong, which reflected improving property market
conditions.

  Finance costs
      Finance costs decreased by HK$37.7 million, or 37.3%, to HK$63.5 million for 2004 from
HK$101.2 million for 2003. The average interest rates applicable decreased from 4.4% in 2003 to 3.1% in
2004. The decrease was primarily due to lower market interest rates in 2004 compared to 2003 as all of the
interest bearing loans were on a floating rate basis in 2004 following the conversion of certain loans from
fixed to floating rates with effect from 2004.

                                                   100
                      MANAGEMENT’S DISCUSSION AND ANALYSIS OF
                   FINANCIAL CONDITION AND RESULTS OF OPERATIONS

  Taxation
      Taxation increased by HK$332.0 million to HK$382.0 million for 2004 from HK$50.0 million for
2003. The increase was primarily as a result of increased profit from the revaluation gain. The total amount
of taxation was HK$382.0 million for 2004, which comprised HK$30.1 million of Hong Kong profits tax
and HK$351.8 million of deferred taxation. This compared to a total taxation of HK$50.0 million for 2003,
which comprised HK$45.4 million of Hong Kong profits tax and HK$75.8 million of deferred taxation
credit and HK$80.4 million of deferred taxation charge attributable to change in the tax rate.

  (Loss) profit for the year
      Profit was HK$1,835.2 million for 2004 compared to a loss of HK$229.4 million for 2003, as a result
of the combined effect of the factors described above.

LIQUIDITY AND CAPITAL RESOURCES
      The principal sources of funding for capital investments in the Property have historically been from
cash from operating activities. See the section headed ‘‘Certain Factors Affecting Results of Operations and
Financial Condition’’ in this Offering Circular for changes to Champion REIT’s cost structure and
operations after the Reorganization.

INDEBTEDNESS
     Historically, the indebtedness of the Group Companies consisted primarily of loans from fellow
subsidiaries. As of December 31, 2005, these loans from fellow subsidiaries amounted to approximately
HK$2,096.9 million, representing a gearing ratio (total indebtedness over total assets) of 9.2%.
Approximately 86.9% of the loans were interest bearing, with floating interest rates.

CAPITAL EXPENDITURES
     Capital expenditures amounted to nil, HK$2.8 million and HK$3.7 million in 2003, 2004 and 2005,
respectively.




                                                    101
         CERTAIN FACTORS AFFECTING FUTURE RESULTS OF OPERATIONS AND
                             FINANCIAL CONDITION


       After the Listing Date, there will be certain changes to Champion REIT’s cost structure, level of
  indebtedness and operations. As a result, the following discussion has been prepared to assist
  investors’ evaluation of the factors which may affect Champion REIT’s future results of operations.
  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 by
  Champion REIT, the Manager, the Trustee, the Underwriters, the Listing Agent, Great Eagle,
  GE Holder, Kerry Properties, KP Holder, Wing Tai, the Vendor Companies or any other person that
  the underlying assumptions will materialize. Investors are cautioned not to place undue reliance on
  these forward-looking statements.



OVERVIEW

      Champion REIT is a real estate investment trust formed primarily to own and invest in an income-
producing portfolio of office and retail properties. Champion REIT will initially invest in and own the
Property, which comprises 91.5% of the Gross Rentable Area of Citibank Plaza and substantially all of the
parking spaces. Citibank Plaza is a modern glass and steel prime Grade A office complex that comprises
Citibank Tower, a 47-storey building, and ICBC Tower, a 37-storey building, and includes a retail podium
and a carpark.

      The audited combined financial information of the Group Companies set forth in Appendix I to this
Offering Circular and the other historical financial information have been prepared based on the historical
operations of the Group Companies. While the sources of revenue of Champion REIT will be similar to
those of the Predecessor Companies, its cost structure after the Listing Date will differ in certain significant
respects from the historical cost structure of the Group Companies. Certain historical costs of the Group
Companies will no longer be costs of Champion REIT and certain other new costs, such as the fees of the
Trustee, the Manager and the Property Manager, will be costs of Champion REIT going forward that were
not costs of the Group Companies historically.

      In addition, in accordance with the Trust Deed, distributions to Unitholders will be determined on the
basis of Annual Distributable Income, which is the consolidated audited net profit after tax of Champion
REIT and each Special Purpose Vehicle owned by the Trustee on trust for and on behalf of Champion REIT
for the relevant financial year adjusted to eliminate the effects of certain cash and non-cash items, as more
specifically described in the section headed ‘‘Distribution Policy’’ in this Offering Circular.

      Thus, for these and other reasons described below, historical net profit after tax of the Group
Companies (including the Predecessor Companies) should not be treated as comparable to Annual
Distributable Income.

      Further, the presentation format of Champion REIT’s financial information may differ from that of the
audited combined financial information set forth in Appendix I to this Offering Circular. Set forth below are
details of the primary income items and other financial statement items of the Group Companies that may
be affected by the Reorganization and the Global Offering.

ADDITIONAL COST ITEMS                                                                                              B14(b)

      Champion REIT will incur fees and expenses associated with the REIT structure that were not
previously incurred by the Group Companies in respect of the Property. Set out below are certain such
additional cost items.

                                                      102
           CERTAIN FACTORS AFFECTING FUTURE RESULTS OF OPERATIONS AND
                               FINANCIAL CONDITION

Manager’s Fee

     Under the Trust Deed, the Manager will receive:

     (a)    a Manager’s Fee of 12% of the net property income (before deduction therefrom of the
            Manager’s Fee) of Champion REIT for the period from the Listing Date to December 31, 2006,
            if the net property income (before deduction therefrom of the Manager’s Fee) of Champion
            REIT shall be equal to or more than HK$270 million; and

     (b)    thereafter, in respect of each semi-annual period, a Manager’s Fee of 12% of the net property
            income (before deduction therefrom of the Manager’s Fee) of Champion REIT for that semi-
            annual period, if the net property income of Champion REIT for that semi-annual period (before
            deduction therefrom of the Manager’s Fee) shall be equal to or more than HK$200 million.

      Accordingly, if the net property income for any period is below the applicable threshold, the Manager
will not receive any Manager’s Fee for such period. If the net property income for any period is equal to or
more than the applicable threshold, the Manager will be entitled to receive the Manager’s Fee, calculated
based on 12% of the entirety of the net property income achieved.

      For an initial period from the Listing Date until December 31, 2010, the Manager’s Fee payable in           9.10
respect of the Property shall be paid to the Manager in the form of Units. The Manager’s Fee payable in
respect of the Property for the period after the fifth anniversary of the Listing Date, or in respect of other
properties acquired by Champion REIT after the Listing Date, shall be paid to the Manager in the form of
cash and/or Units, as the Manager may elect. The issuance of Units to the Manager as all or part of its
compensation will result in dilution to the Unitholders, including the amount of distributions per Unit. The
Manager’s Fee, whether paid in cash or in Units, will be treated as an expense item in the income statement.
When the Manager’s Fee is paid in the form of Units, it will be an adjustment item that will be added back
to the net profit after taxation for purposes of calculating the Annual Distributable Income. For further
information on these arrangements and a detailed description of the Manager’s fees, see the section headed
‘‘The Manager — Fees, Costs and Expenses of the Manager’’ in this Offering Circular.

Acquisition Fee and Divestment Fee

      In addition to the Manager’s Fee, under the Trust Deed, the Manager is also entitled to receive an         9.10
acquisition fee not exceeding 1.0% of the acquisition price of any real estate acquired by Champion REIT.
The acquisition fee will be paid to the Manager in the form of cash or, at the election of the Manager and
with the prior approval of Unitholders by Ordinary Resolution, entirely in the form of Units or partly in cash
and partly in the form of Units. Further, the Manager is entitled to receive a divestment fee not exceeding
0.5% of the sale price of any real estate sold or divested by Champion REIT. The divestment fee will be
paid to the Manager in the form of cash or, at the election of the Manager and, with the prior approval of
Unitholders by Ordinary Resolution, entirely in the form of Units or partly in cash and partly in the form of
Units. For further information on these arrangements and a detailed description of the Manager’s fees, see
the section headed ‘‘The Manager — Fees, Costs and Expenses of the Manager’’ in this Offering Circular.

Property Management Fees

      Under the Property Management Agreement, the Property Manager is entitled to receive from each             9.10
New Property Company (in relation to the management of the relevant portion of the Property owned by
that New Property Company) a fee of 3.0% per annum of the Gross Property Revenue of the relevant
portion of the Property for the property management services and lease management services provided by
the Property Manager, to be paid by each New Property Company to the Property Manager for each
financial year. For further information on these arrangements, see the section headed ‘‘Material Agreements

                                                     103
         CERTAIN FACTORS AFFECTING FUTURE RESULTS OF OPERATIONS AND
                             FINANCIAL CONDITION

and Other Documents Relating to Champion REIT — Property Management Agreement’’ in this Offering
Circular.

Commissions

      Under the Property Management Agreement, the Property Manager is entitled to receive from the             9.10
relevant New Property Company a marketing services fee in relation to the seeking or the renewal of
tenancies based on the following schedule:

     (    a commission equivalent to one month’s base rent, for securing a tenancy of three years or more;

     (    a commission equivalent to one-half month’s base rent, for securing a tenancy of less than
          three years;

     (    a commission equivalent to one-half month’s base rent, for securing a renewal of tenancy
          irrespective of the duration of the renewal term; and

     (    a commission equivalent to 10.0% of the total licence fee for securing a licence for a duration of
          less than 12 months.

    If the tenancy, renewal of tenancy or the licence is secured by a third party agent, the Property
Manager will not be entitled to receive any of the above commissions.

Trust Expenses

       Champion REIT is constituted by the Trust Deed. The recurring operating expenses of the Trust            9.10
includes (a) Trustee’s Fee and (b) other trust expenses currently estimated to be HK$3.0 million per annum
which include annual listing fees, registrar fees, accounting fees, audit and tax advisor’s fees, costs
associated with the preparation and distribution of reports to Unitholders and other miscellaneous expenses.
Under the terms of the Trust Deed, HSBC Institutional Trust Services (Asia) Limited, as the Trustee, is
entitled to receive a remuneration not exceeding 0.03% per annum of the value of the Deposited Property
(which may be further increased to a maximum of 0.06% per annum of the value of the Deposited Property,
subject to one month’s prior notice being given to the Unitholders), subject to a minimum fee of
HK$200,000 per month. In addition, Champion REIT will pay the Trustee a one-time inception fee of no
more than HK$200,000. The Trustee may be entitled to additional fees in certain circumstances. For further
information on these arrangements, see the section headed ‘‘The Trust Deed — Trustee’s Fee’’ in this
Offering Circular.

Profits Tax

      The Property Companies and Finance Company are subject to Hong Kong profits tax in respect of
profits derived from the leasing of the Property, which is currently levied at the rate of 17.5%.

      Champion REIT, as a collective investment scheme constituted as a unit trust and authorized under
section 104 of the SFO, is exempt from Hong Kong profits tax. Distributions made by Champion REIT to
Unitholders are not subject to any withholding tax in Hong Kong. However, the Property Companies are
subject to Hong Kong profits tax in respect of the profits derived from the leasing of the Property, although
they are not subject to Hong Kong profits tax on any capital gains derived from the disposal of the Property
provided the Property is not held for trading purposes. For tax purposes, the Manager treats the Property as
not held for trading purposes.

                                                    104
         CERTAIN FACTORS AFFECTING FUTURE RESULTS OF OPERATIONS AND
                             FINANCIAL CONDITION

CHANGE IN NATURE OF EXISTING COSTS
Lease Agency Fee
      Historically, the Group Companies’ direct costs included lease agency fees payable to The Great
Eagle Estate Agents Limited, and outside real estate agents for the lease-out of rental space in the Property
(ranging between the equivalent of one-half month to three months face rent for new leases and the
equivalent of one-half month face rent for renewals), as well as monthly agency fees (of between 2% and
4% of the monthly face rent) paid to The Great Eagle Estate Agents Limited for lease administration
services. For the years ended December 31, 2003, 2004 and 2005, lease agency fees paid to The Great Eagle
Estate Agents Limited were HK$15.9 million, HK$16.4 million and HK$13.8 million, respectively. With
effect from the Listing Date, Champion REIT will continue to pay outside real estate agents in accordance
with market rates. However, the arrangement with The Great Eagle Estate Agents Limited will terminate
upon completion of the Global Offering and will be replaced by property and lease management services
fees and marketing services fees payable to the Property Manager pursuant to the Property Management
Agreement.

Finance Costs and Interest Rate Swaps
      Historically, finance costs of the Group Companies consisted primarily of interest on loans from          B2(j)
fellow subsidiaries.
      On the Listing Date, the Finance Company will have in place the Facility, in the amount of
HK$7,200 million for a term of five years from the Listing Date, comprising a term loan in the amount of
HK$7,000 million to be drawn down on the Listing Date by the Finance Company and on-lent to the New
Property Companies, and a HK$200 million revolving credit facility which will remain undrawn as of the
Listing Date. A front-end fee of HK$36.0 million, payable on the Listing Date, will be paid by the Finance
Company in respect of the Facility. For a description of the agreements under the Facility, see the section
headed ‘‘Material Agreements and Other Documents Relating to Champion REIT — The Facility’’ in this
Offering Circular. The Facility will bear interest on a floating rate basis.
      Each of the New Property Companies entered into an interest rate swap agreement on April 24, 2006,
for a term of five years effective on the Listing Date, with Merrill Lynch Capital Markets Bank Limited,
with a guarantee by Merrill Lynch & Co., Inc. (rated ‘‘Aa3’’ by Moody’s Investors Service). The swaps are
for a total notional amount equivalent to the amount of the term loan under the Facility, or
HK$7,000 million, and upfront swap payments of HK$1,417.0 million in aggregate are to be paid by the
New Property Companies on the Listing Date. Had the relevant interest rates on April 24, 2006 been
10 basis points higher, the upfront swap payments would have been HK$1,444.8 million in aggregate. Had
the relevant interest rates on April 24, 2006 been 10 basis points lower, the upfront swap payments would
have been HK$1,389.1 million in aggregate.




                                                    105
             CERTAIN FACTORS AFFECTING FUTURE RESULTS OF OPERATIONS AND
                                 FINANCIAL CONDITION

      Under the interest rate swaps, the swap counterparty will pay the New Property Companies on a
quarterly basis an aggregate amount equivalent to the floating rate interest payable in respect of the term
loan under the Facility Agreement, which the New Property Companies will pay to the Finance Company
for the Finance Company to meet the interest payments payable in respect of the term loan under the
Facility Agreement. In return, the New Property Companies will pay to the swap counterparty fixed interest
at rates as outlined in the table below.
                                                                                      For the period from
                                                              Listing
                                                            Date to 1st 1st to 2nd 2nd to 3rd 3rd to 4th     4th to 5th
                                                            Anniversary Anniversary Anniversary Anniversary Anniversary
                                                             of Listing  of Listing  of Listing  of Listing  of Listing
                                                                Date        Date        Date        Date        Date

Cash finance costs (HK$ millions) *******                         17.5            35.0             70.0          105.0          140.0
Cash finance costs as a percentage of the
  term loan of HK$7,000 million ********                        0.25%          0.50%           1.00%             1.50%        2.00%
     The table below outlines the cash finance costs for the Forecast Period and for the calendar years 2007
to 2011:
                                                        Listing Date
                                                              to                             For the year ending
                                                        December 31,                            December 31,
                                                            2006              2007        2008      2009      2010              2011(1)

Cash finance costs (HK$ millions) *****                       10.6             28.1         56.1          91.1     126.1           55.5
Cash finance costs as a percentage of
  the term loan of HK$7,000 million **                      0.25%(2)        0.40%        0.80%        1.30%        1.80%         2.03%(2)

Notes:
(1)      Cash finance costs for the period from January 1, 2011 to the maturity date of the Facility, which is the 5th anniversary of the
         Listing Date.
(2)      Annualized cash finance costs as a percentage of the term loan is calculated as follows:
         (Cash finance costs for the period/number of days in the period × 365)/Term loan of HK$7,000 million

      The interest rate swaps have a ‘‘step-up’’ structure, in that the aggregate amount of the cash finance
costs payable by the New Property Companies increases over the life of the swap. It is intended that the
lower cash finance costs in the early periods of the interest rate swaps will enhance the DPU payable to
Unitholders for such periods. Increases in net property income in later periods of the interest rate swap will
be required to be used to cover the higher cash finance costs incurred in the later periods of the interest rate
swaps. See the section headed ‘‘Risk Factors — Risks Relating to Champion REIT’s Organization and
Operations — The level of Annual Distributable Income will be adversely affected if anticipated rental
growth rates do not materialize, due to the ‘‘step-up’’ nature of the interest rate swap arrangements. There is
no assurance that Champion REIT will be able to service the potentially higher cash finance costs during or
after the term of such swaps or to make any distributions to Unitholders’’ in this Offering Circular.
      The interest rate swaps eliminate the effect of interest rate fluctuation on the Annual Distributable
Income of Champion REIT. If Champion REIT had not entered into the interest rate swaps and instead were
to pay interest on the term loan on a floating rate basis, its finance costs would fluctuate with, among other
things, changes in interest rates. Without taking into consideration any impact on the profits tax liability of
Champion REIT, and assuming that (a) Champion REIT had not entered into the interest rate swaps;
(b) Champion REIT were to pay interest on the term loan at a spread over HIBOR; (c) all other factors were
to remain the same, Champion REIT’s Annual Distributable Income would decrease by approximately

                                                                   106
         CERTAIN FACTORS AFFECTING FUTURE RESULTS OF OPERATIONS AND
                             FINANCIAL CONDITION

HK$7.0 million each year for every 10 basis point increase in HIBOR. Conversely, Champion REIT’s
Annual Distributable Income would increase by approximately HK$7.0 million each year for every decrease
of 10 basis points in HIBOR.
     The aggregate of (a) the front-end fee payable in respect of the Facility; (b) the upfront swap
payments; and (c) the aggregate amount of cash finance costs payable by the New Property Companies
during the life of the swaps, will be amortized throughout the concurrent five-year terms of the Facility and
of the interest rate swaps in accordance with Hong Kong Accounting Standard 32 and Hong Kong
Accounting Standard 39 and the amortized amount will be charged to the income statement of Champion
REIT.
      The amount to be amortized will represent the amount of ‘‘effective interest’’ for the purposes of Hong
Kong Accounting Standard 32 and Hong Kong Accounting Standard 39. The ‘‘effective interest’’ rate is
calculated by exactly discounting:
     (    the proceeds of the term loan of HK$7,000 million received on the Listing Date,
     (    the front-end fee of HK$36.0 million in respect of the Facility and the upfront swap payments of
          HK$1,417.0 million, totalling HK$1,453.0 million, both payable on the Listing Date and the cash
          finance costs of HK$367.5 million payable by the New Property Companies during the five year
          term, and
     (    the entire amount of the term loan of HK$7,000 million to be repaid upon the expiry of the five-
          year term,
such that the total net present value of the aforesaid items is zero. On the basis of such calculation, the
‘‘effective interest’’ rate would be 5.81% for the five-year term.
      The amount of ‘‘effective interest’’ calculated by reference to the ‘‘effective interest’’ rate of 5.81%,
such amount of ‘‘effective interest’’ as a percentage of the term loan of HK$7,000 million, the cash finance
costs and the amount of equity effectively returned to Unitholders for each of the five years, are set out in
the table below. The ‘‘Finance costs’’ of Champion REIT will comprise primarily (a) such ‘‘effective
interest’’; and (b) commitment fee and interest, if any, payable in respect of the revolving credit facility
under the Facility Agreement.
                                                                          For the period from
                                                Listing Date
                                                   to 1st       1st to 2nd    2nd to 3rd     3rd to 4th    4th to 5th
                                                Anniversary    Anniversary    Anniversary   Anniversary   Anniversary
                                                 of Listing     of Listing     of Listing    of Listing    of Listing
                                                    Date           Date           Date          Date          Date
‘‘Effective interest’’ charged as part of
   ‘‘Finance costs’’ in the income statement
   of Champion REIT (HK$ millions) ******           329.1         347.2          365.0          381.8        397.4
‘‘Effective interest’’ as a percentage of the
   term loan of HK$7,000 million *********         4.70%         4.96%           5.21%          5.45%       5.68%
Cash finance costs (HK$ millions) *********          17.5          35.0            70.0         105.0        140.0
Amount of equity effectively returned to
  Unitholders (HK$ millions)*************           311.6         312.2          295.0          276.8        257.4




                                                     107
             CERTAIN FACTORS AFFECTING FUTURE RESULTS OF OPERATIONS AND
                                 FINANCIAL CONDITION

      The table below sets out the ‘‘effective interest’’ to be charged to the income statement of Champion
REIT, such amount of ‘‘effective interest’’ as a percentage of the term loan of HK$7,000 million, the cash
finance costs and the amount of equity effectively returned to Unitholders, for the Forecast Period and for
the calendar years 2007 to 2011.
                                                                Listing Date
                                                                      to
                                                                December 31,               For the year ending December 31,
                                                                    2006           2007       2008       2009      2010     2011(1)
‘‘Effective interest’’ charged as part of ‘‘Finance
   costs’’ in the income statement of Champion
   REIT (HK$ millions) *********************                         196.5         340.0      358.1      375.2      391.3      159.3
‘‘Effective interest’’ as a percentage of the term
   loan of HK$7,000 million******************                      4.62%(2)       4.86%      5.12%      5.36%       5.59% 5.81%(2)
Cash finance costs (HK$ millions) ************                         10.6         28.1       56.1       91.1      126.1       55.5
Amount of equity effectively returned to
  Unitholders (HK$ millions) ****************                        186.0         312.0      301.9      284.1      265.2      103.8

Notes:
(1)      For the period from January 1, 2011 to the maturity date of the Facility, which is the 5th anniversary of the Listing Date.
(2)      Annualized ‘‘Effective interest’’ as a percentage of the term loan is calculated as follows:
         (‘‘Effective interest’’ for the period/number of days in the period × 365)/Term loan of HK$7,000 million

      The average of the aggregate amounts of ‘‘effective interest’’ as a percentage of the term loan of
HK$7,000 million is 5.20% per annum over the five-year term. The difference between such average of
5.20% and the ‘‘effective interest’’ rate of 5.81% is primarily due to the notional reduction of the principal
amount of the term loan from HK$7,000 million to HK$5,547.0 million (to account for the payment on the
Listing Date of the front-end fee of HK$36.0 million payable in respect of the Facility and the upfront swap
payments of HK$1,417.0 million) and the application of the ‘‘effective interest’’ rate to such reduced initial
principal amount.

LIQUIDITY AND CAPITAL RESOURCES                                                                                                        B2(j)

      Upon completion of the Global Offering, the net cash received by the New Property Companies from
the operations of the Property and payments from the counterparty under the interest rate swaps will be
Champion REIT’s primary source of liquidity to fund distributions to Unitholders (which the Manager
intends to be 100% of Champion REIT’s Annual Distributable Income for each financial year), debt
servicing, repairs and maintenance and other recurring operating and capital costs. Where appropriate,                                 7.9
Champion REIT may also seek to issue further Units and raise new credit facilities (under the REIT Code,
Champion REIT is generally only allowed to borrow up to 45% of total gross asset value), particularly in
relation to any proposal to acquire further properties.
      On occasion, the Manager expects to undertake capital expenditures on the Property which will utilize
cash resources and may not be deductible for taxation purposes. In such circumstances, the Manager will
seek to incur such capital expenditures that will enhance the yield of the Property either by improving rental
rates or occupancy rates or otherwise increasing the Gross Rentable Area of the Property, and expects that
such enhancements would both increase the cash flows from the Property and increase the value of the
Property which may allow the Manager further flexibility to borrow in accordance with the REIT Code.
      As of December 31, 2005, the Group Companies did not have any contractual commitments or                                         B2(h)
obligations to make any capital expenditures. Champion REIT has no plans to make any material capital
expenditure in relation to the Property. Any material capital expenditure in relation to the Property required
is expected to be funded by external borrowings.

                                                                 108
         CERTAIN FACTORS AFFECTING FUTURE RESULTS OF OPERATIONS AND
                             FINANCIAL CONDITION

       Under the Property Sale and Purchase Agreements, legal assignment of the relevant portion of the
Property from the Predecessor Property Companies to the New Property Companies will take place on the
earlier of: (a) such date as may be notified by the relevant New Property Company to the relevant
Predecessor Property Company by not less than 14 clear days’ notice in writing; and (b) the
10th anniversary of the date of the relevant Property Sale and Purchase Agreement. Stamp duty payable on
the legal assignment of the Property would amount to approximately HK$850.1 million at the current stamp
duty rate of 3.75%, based on the stated consideration in the Property Sale and Purchase Agreements, and
would be payable by the respective New Property Companies (and effectively by Champion REIT since it
wholly owns the New Property Companies) on the legal assignment of the Property to the New Property
Companies. See the section headed ‘‘Risk Factors — Risks Relating to Champion REIT’s Organization and
Operations — Champion REIT may have to raise further equity and/or debt to fund stamp duty required in
connection with the Property Sale and Purchase Agreements and may be subject to such stamp duty prior to
the actual completion of the sale and purchase of the Property by the New Property Companies’’ in this
Offering Circular. An accrual for such stamp duty has been made, as reflected in the section headed
‘‘Unaudited Pro Forma Balance Sheet’’ in this Offering Circular. The Manager does not consider that it
would be in the interest of Champion REIT to raise the funds to provide for such potential stamp duty
liability through equity or debt financing at this stage when such stamp duty is not yet payable.
WORKING CAPITAL STATEMENT
      Taking into consideration the financial resources available to Champion REIT, including its internally
generated funds, the Facility and the estimated net proceeds of the Global Offering, the Manager believes
that Champion REIT has sufficient liquid assets to meet its working capital and operating requirements for
the period from May 24, 2006 to May 23, 2007. To the extent that Champion REIT makes any acquisitions,
it would be required to rely on external borrowings and equity or debt securities offerings to finance such
acquisitions. The sale of additional equity or equity-linked securities may result in additional dilution to
Unitholders. However, Champion REIT may not be able to raise additional capital, should that become
necessary, on terms acceptable to it or at all.
INDEBTEDNESS
      Upon completion of the Global Offering, the total indebtedness of Champion REIT will be                   B2(r)
HK$7,000 million, or approximately 28.8% of Champion REIT’s total assets as of the Listing Date (based
on the information in the section headed ‘‘Unaudited Pro Forma Balance Sheet’’ in this Offering Circular).
The Facility will be in the principal amount of HK$7,200 million from a group of banks, including Bank of
China (Hong Kong) Limited, The Bank of East Asia, Limited, Citigroup Global Markets Asia Limited, The
Hongkong and Shanghai Banking Corporation Limited, Hang Seng Bank Limited, Industrial and
Commercial Bank of China (Asia) Limited, J.P. Morgan Securities (Asia Pacific) Limited and Sumitomo
Mitsui Banking Corporation, acting as mandated arrangers. The Facility, which was entered into on
April 26, 2006, comprises a HK$7,000 million term loan facility for a term of five years, to be drawn down
on the Listing Date, and a HK$200 million revolving credit facility which will remain undrawn as of the
Listing Date.
      The Facility will bear interest at HIBOR plus a margin. The all-in cost of the Facility will be no more
than HIBOR plus 63 basis points. In addition, the revolving credit facility will be subject to a commitment
fee of 15 basis points per annum on the daily undrawn amount. See the section headed ‘‘Certain Factors
Affecting Future Results of Operations and Financial Condition — Change in Nature of Existing Costs —
Finance Costs and Interest Rate Swaps’’ and ‘‘Material Agreements and Other Documents Relating to
Champion REIT — The Facility’’ in this Offering Circular.




                                                    109
        CERTAIN FACTORS AFFECTING FUTURE RESULTS OF OPERATIONS AND
                            FINANCIAL CONDITION

NO MATERIAL ADVERSE CHANGE
      The Manager confirms that, having performed reasonable due diligence on Champion REIT and the
Group Companies, there has been no material adverse change in Champion REIT’s financial or trading
position or prospects since December 31, 2005, which is the end of the period covered by the Accountants’
Report included in Appendix I to this Offering Circular.




                                                  110
                                          PROFIT FORECAST                                                        B18



      Statements contained in this Profit Forecast section that are not historical facts may be forward-
looking statements. Such statements are based on the assumptions set forth in this section and are subject
to 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 by Champion REIT, the Manager, the Trustee, the Underwriters, the Listing Agent,
Great Eagle, GE Holder, Kerry Properties, KP Holder, Wing Tai, the Vendor Companies or any other
person that the underlying assumptions used in preparing the profit forecast will materialize or that the
profit forecast results will be achieved or are likely to be achieved. See the section headed ‘‘Risk Factors —
Risks relating to an investment in the Units — The forward-looking and certain other information in this
Offering Circular may prove inaccurate’’ in this Offering Circular.

     The profit forecast (including the underlying assumptions), for which the Manager is responsible,
has been approved by the Board. The forecast has been prepared on the bases and assumptions set out
below and in accordance with accounting principles generally accepted in Hong Kong and is
consistent in all material respects with those accounting policies adopted in the audited financial
information of the Group Companies. The forecast income statement data of Champion REIT on the
following pages of this Offering Circular has been prepared on a consolidated basis, reflecting the
forecast combined income statement of Champion REIT and the Group Companies for the period from
May 24, 2006 to December 31, 2006 (‘‘Forecast Period’’). This forecast assumes that the Listing Date
will be May 24, 2006 and will vary if the Listing Date is different.

      Investors are cautioned that the profit forecast is prepared for the period from May 24, 2006 to
December 31, 2006. The audited financial results of the Group Companies in the Offering Circular
only cover the three years ended December 31, 2003, 2004 and 2005. The financial information
relating to the Group Companies for the period from January 1, 2006 to the Listing Date has not been
prepared by the Manager and the financial results of the Group Companies for such period have
neither been audited nor reviewed. In preparing this profit forecast, the Manager has made certain
assumptions with respect to the operations of Champion REIT as set out below. To the extent that the
Manager has not identified events that have occurred or may occur in respect of the Group Companies
during the period from January 1, 2006 to the Listing Date, the impact of such events on the future
results of Champion REIT has not been taken into account in this profit forecast.

     Investors should note that for reasons stated herein, in arriving at the combined forecast results
of Champion REIT, it has been assumed that there will be no change in the price of the Units over the
Forecast Period. Should the market value of the Property as at December 31, 2006 drop below or
increase above the Appraised Value, the deficit or surplus, along with any associated deferred
taxation, would be charged to the income statement. However, such deficit or surplus (after taking into
account any associated deferred taxation), which is non-cash in nature, would not reduce or increase
the Annual Distributable Income for the Forecast Period. Investors should also note that the format
and individual line items in Champion REIT’s future financial reports and statements may differ from
those used for the purposes of this forecast and such line items should not be viewed as individual
forecasts but form part of the bases and assumptions used in arriving at distributable income for the
Forecast Period. This forecast should be read together with the letters set out in Appendix III headed
‘‘Profit Forecast’’, Appendix IV headed ‘‘Letter from the Independent Property Valuer in Relation to
Rental Income’’ and Appendix V headed ‘‘Independent Property Valuer’s Valuation Report’’ to this
Offering Circular and the principal bases and assumptions set out below.

     The forecast and calculations made in preparing the profit forecast have been reviewed by
Deloitte Touche Tohmatsu and the Listing Agent. Please refer to Appendix III for letters from Deloitte
Touche Tohmatsu and the Listing Agent on the accounting policies adopted and calculations made in
arriving at the profit forecast. The Manager and the Listing Agent consider the assumptions made in
arriving at the profit forecast to be reasonable.

                                                    111
                                       PROFIT FORECAST


      Investors should note that the audited combined financial information of the Group Companies
set forth in the table below, which has been extracted from Appendix I to this Offering Circular, has
been prepared based on the historical operations of the Group Companies. While the sources of
revenue of Champion REIT will be similar to those of the Group Companies, its cost structure after the
Listing Date will differ in certain significant respects from the historical cost structure of the Group
Companies. Certain historical costs of the Group Companies will no longer be costs of Champion
REIT and certain other new costs, such as the fees of the Trustee, the Manager and the Property
Manager, will be costs of Champion REIT going forward that were not costs of the Group Companies
historically. See the section headed ‘‘Certain Factors Affecting Future Results of Operations and
Financial Conditions’’ in this Offering Circular.




                                                  112
                                          PROFIT FORECAST

Profit Forecast for the Forecast Period

      The following table sets forth data extracted from the historical income statements of the Group
Companies for the years ended December 31, 2004 and 2005, and data extracted from Champion REIT’s
forecast combined income statements and Champion REIT’s distribution data for the Forecast Period, which
is from May 24, 2006, to December 31, 2006. Investors should note that the figures for the Forecast Period
are for less than a full year whereas those for 2004 and 2005 are for a full year.
                                                                                                  For the
                                                                     Year Ended December 31,      Forecast
                                                                       2004           2005        Period(1)
                                                                     (HK$ thousands, except per unit data)
                                                                     (audited)    (audited)
Combined income statements data:
   Rental Income ****************************************            329,142         319,549      256,850
   Carpark income ***************************************              8,321           9,011        5,905
   Building management fee income*************************            66,126          72,723       46,496
Rental and building management fee income ***************            403,589         401,283      309,251
   Surplus on forbearance fee ******************************           2,057           1,960           —
   Interest income from tenants*****************************              40              33           —
   Others ***********************************************                 10              —            —
Rental related income ***********************************              2,107           1,993           —
   Building management fee *******************************           (76,146)        (79,810)     (48,494)
   Carpark operating costs *********************************          (1,266)         (1,349)        (820)
   Government rent and rates ******************************          (11,472)        (10,913)     (10,426)
   Lease agency fee **************************************           (18,453)        (20,072)      (9,418)
   Property and lease management services fees ***************            —               —        (7,726)
   Property marketing services fees *************************             —               —        (1,258)
   Legal cost and stamp duty ******************************           (1,870)         (1,222)      (1,318)
   Property miscellaneous expenses *************************          (1,771)           (530)      (2,556)
   Repairs and maintenance********************************              (420)         (3,102)      (1,506)
Rental related outgoings ********************************* (111,398)                (116,998)     (83,522)
Net rental income***************************************             294,298         286,278      225,729
Other operating income ***********************************               104             109           —
Manager’s fee*******************************************                  —               —            —(2)
Trustee’s fee and expenses ********************************               —               —        (4,427)
Fitting out works of investment properties written off **********     (2,148)         (1,746)      (1,627)
Administrative expenses **********************************              (434)           (569)          —
Increase in fair value of investment properties(3) *************** 1,988,859      11,925,276           —
Finance costs *******************************************            (63,450)        (88,242)    (196,515)
Profit before taxation************************************ 2,217,229              12,121,106       23,160
   Hong Kong Profits Tax *********************************           (30,143)        (27,319)          —
   Deferred taxation ************************************** (351,845)             (2,068,491)      (5,113)
Taxation *********************************************** (381,988)                (2,095,810)      (5,113)
Profit for the year/period ******************************** 1,835,241             10,025,296       18,047
Profit for the year/period excluding increase in fair value of
   investment properties and related deferred taxation***********    188,832         172,175       18,047
Distribution data:
Profit for the period************************************************************                  18,047
Adjustments(4) *****************************************************************                  191,071
Distributable income ***********************************************************                  209,118

                                                   113
                                                      PROFIT FORECAST

                                                                                               Based on the            Based on the
                                                                                              Minimum Offer           Maximum Offer
                                                                                                  Price                   Price

Offer Price (HK$) ******************************************                                           5.00                    5.75
Assumed Number of Units held by Public Unitholders as of Record
  Date for the FY06 Distribution Period (million) ****************                                  1,234.2(5)             1,234.2(5)
Forecasted distribution per Unit (HK$) of the Units held by Public
  Unitholders as of record date for FY06 Distribution Period (after
  taking into account the effect of the Distribution Waiver) ********                               0.1694                  0.1694
Forecasted annualized profit yield after taxation
  Before taking into account the effect of the Distribution Waiver(6)                                  0.22%                   0.19%
  After taking into account the effect of the Distribution Waiver(6)***                                0.48%                   0.42%
Forecasted annualized distribution yield after taxation
  Before taking into account the effect of the Distribution Waiver(7)                                  2.51%                   2.18%
  After taking into account the effect of the Distribution
     Waiver(7)**********************************************                                           5.57%                   4.84%

Notes:
(1)      In preparing the profit forecast for the Forecast Period, the Manager has excluded (a) any goodwill or negative goodwill; and
         (b) the costs and expenses of obtaining the listing status of Champion REIT of HK$31.3 million which have to be charged to
         the income statement. The Manager considers that these items are non-recurring in nature and the inclusion of such items will
         distort the comparability of profit/loss from period to period. In any case, such items will have no impact on the distributable
         income of Champion REIT.
(2)      Under the Trust Deed, provided that Champion REIT achieves net property income (before deduction therefrom of the
         Manager’s Fee) of HK$270 million for the period from the Listing Date to December 31, 2006, the Manager will receive a
         Manager’s Fee of 12% of the net property income of Champion REIT (before deduction therefrom of the Manager’s Fee) for
         such period. Based on a projected net property income of HK$225.7 million, the Manager will receive no Manager’s Fee for
         the Forecast Period.
(3)      The Manager considers that there is no reliable basis for determining the market value for the Property as of any future date.
         Accordingly, for the purpose of the profit forecast, the Manager has assumed that the market value of the Property as of
         December 31, 2006 will be the same as the Appraised Value. Changes in the fair value of investment properties will not affect
         Annual Distributable Income.
(4)      Adjustments are made to add back (a) the non-cash portion (HK$186.0 million) of the finance cost (HK$196.5 million) for the
         Forecast Period (the difference of HK$10.6 million being the cash finance costs payable to the swap counterparty); and
         (b) deferred taxation of HK$5.1 million for the Forecast Period. The finance cost of HK$196.5 million includes amortization of
         the front-end fee of HK$36.0 million payable in respect of the Facility.
(5)      For the purpose of calculating the distribution per Unit (HK$) of the Units held by Public Unitholders as of the Record Date
         for the FY06 Distribution Period set forth in the table above, it is assumed the number of Units held by the Public Unitholders
         as of such Record Date will be the same as that as of the Listing Date. Investors should note that the DPU for the FY06
         Distribution Period, the FY07 Distribution Periods and the FY08 Distribution Periods will be enhanced by the Distribution
         Waiver as well as by the interest rate swaps, the enhancement effect of which will diminish over the applicable periods of the
         Distribution Waiver ending with the Final FY08 Distribution Period and over the five-year term of the interest rate swaps.
         There is no assurance that the DPU for future periods will not decrease.
(6)      The forecasted annualized profit yield for the Forecast Period is provided for illustrative purposes only, and calculated as
         follows: (Profit for the Forecast Period assuming no change in fair value of investment properties/number of days in the
         Forecast Period) x 365/number of Units held by Public Unitholders as of the record date for the FY06 Distribution
         Period/Offer Price, and excludes brokerage of 1%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction
         levy of 0.005%.
(7)      The forecasted annualized distribution yield for the Forecast Period is provided for illustrative purposes only and the actual
         annualized distribution yield may differ. Investors should note that GE Holder (together with Great Eagle as guarantor) has
         entered into the DPU Guarantee Deed with the Trustee and the Manager pursuant to which GE Holder has guaranteed that the
         DPU for the FY06 Distribution Period which each Public Unitholder will receive will not be less than HK$0.1694 (after taking
         into account the effect of the Distribution Waiver). The forecasted annualized distribution yield for the Forecast Period is
         calculated as follows: (DPU for the Forecast Period/number of days in the Forecast Period x 365)/Offer Price, and excludes
         brokerage of 1%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.005%.

                                                                   114
                                           PROFIT FORECAST

      Investors should note that the distribution yield after taxation is different from the profit yield
after taxation. The difference between the distribution yield and the profit yield is due to the
adjustments as described in footnote 4 above. Investors should also note that the distribution yield for
the Forecast Period is higher than the profit yield partly as a result of the lower cash finance cost
payable under the interest rate swaps as compared to the amount of ‘‘effective interest’’ to be charged
to the income statement of Champion REIT as ‘‘Finance costs’’. As the upfront swap payments of
HK$1,417.0 million and the debt front-end fee of HK$36.0 million, totaling HK$1,453.0 million, are
funded by the proceeds of the Global Offering, this effectively means that part of the distribution over the
concurrent five-year term of the Facility and the interest rate swaps represents a partial return of equity. The
upfront swap payments and the debt front-end fee will effectively be distributed to the Unitholders over such
five-year term based on the amount of ‘‘effective interest’’ charged to the income statement of Champion
REIT as ‘‘Finance costs’’ in each financial year (as outlined in the section headed ‘‘Certain Factors
Affecting Future Results of Operations and Financial Condition — Change in Nature of Existing Costs —
Finance Costs and Interest Rate Swaps’’ in this Offering Circular) less the amount of cash finance cost
actually paid during the same period as follows:
                                              Listing Date
                                            to December 31,             For the year ending December 31,
                                                  2006           2007       2008     2009      2010        2011

Amount of equity effectively returned
 to Unitholders (HK$ millions) ****               186.0          312.0      301.9     284.1     265.2      103.8
    See the section headed ‘‘Certain Factors Affecting Results of Operations and Financial Condition —
Change in Nature of Existing Costs — Finance Costs and Interest Rate Swaps’’ in this Offering Circular.
      GE Holder (together with Great Eagle as guarantor) has entered into a deed of guarantee with the
Trustee and the Manager pursuant to which GE Holder has guaranteed that the DPU for the FY06
Distribution Period which each Public Unitholder will receive will not be less than HK$0.1694 (after taking
into account the effect of the Distribution Waiver). Except for such deed of guarantee, none of Champion
REIT, the Manager, the Trustee, the Underwriters, the Listing Agent, Great Eagle, GE Holder, Kerry
Properties, KP Holder, Wing Tai, the Vendor Companies or any other person guarantees the performance of
Champion REIT, the repayment of capital or the payment of any distributions, or any particular return on
the Units. The profit forecast and projected profit and distribution yields stated in the table above are
calculated based on the Maximum Offer Price and Minimum Offer Price. Such profit and distribution yields
will vary for investors who purchase Units in the secondary market at a market price that differs from the
Maximum Offer Price and Minimum Offer Price.

Bases and Assumptions
      The Manager has prepared the profit forecast for the Forecast Period based on the assumptions listed
below. The Manager considers these assumptions to be appropriate and reasonable as at the date of this
Offering Circular. However, recipients of this Offering Circular and all prospective investors in the Units
should consider the profit forecast in the light of such assumptions and make their own assessment of the
future performance of Champion REIT.

Rental and building management fee income
     Rental and building management fee income is derived from (a) Rental Income (from office and retail
space); (b) carpark income; and (c) building management fee income from the Property.

  Rental Income
      Rental Income represents the amounts paid by tenants under their tenancy agreements and licence fees
paid by licensees under their licence arrangements with respect to the Property. Rents paid under tenancies

                                                      115
                                          PROFIT FORECAST

are typically fixed for three years. In addition, consistent with market practice, rent-free periods are
commonly granted on tenancies. In accordance with Hong Kong Accounting Standard 17, the effect of any
rent free period granted is to be amortized over the term of the lease on a straight line basis. Hence, Rental
Income forecasted represents effective rent expected to be generated under all tenancies for the Forecast
Period.
      In projecting Rental Income for the Forecast Period, the Manager has taken into account (a) the
current and expected general economic conditions in Hong Kong, (b) the outlook for Grade A office supply
in Hong Kong and specifically in the Central District and projected vacancy and rental growth as outlined in
Colliers’ Report; and (c) the current and expected level of demand by existing and prospective tenants of the
Property, and the Manager has made the following assumptions.

  Projected leasing schedule
     The following table sets forth a breakdown of Rental Income attributable to the different projected
categories of tenants for the Forecast Period:
                                                                                          Percentage of
                                                                                          Rental Income
                                                                                         projected for the
     Categories of tenants                                                               Forecast Period
                                                                                                 (%)
     Tenancies committed before the Forecast Period ***********************                      92.1
     Expected Tenancy renewals during the Forecast Period ******************                      0.6
     Expected new tenancies entered during the Forecast Period **************                     7.3
     Total ***********************************************************                          100.0

  Occupancy rates assumption
      The following table sets forth the historical and projected occupancy rates for the office and retail
portions of the Property for the periods indicated.
                                                                              Occupancy rates
                                                                      Actual                 Forecast
                                                                as of December 31,     as of December 31,
                                                                       2005                   2006
                                                                        (%)                     (%)
     Office ****************************************                    86.1                     97.0
     Retail ****************************************                   100.0                    100.0

  Projected renewal of tenancies by existing tenants and projected procurement of new tenancies
      In preparing the profit forecast, the Manager has assumed that all tenancies expiring during the
Forecast Period will be replaced with new tenancies at the then prevailing market rent. It is assumed that
following the expiry of the existing tenancies, it will take an average of two to three months to lease the
space to new tenants. Out of the vacant space of 154,936 sq. ft. or 13.9% of the Gross Rentable Area of the
office space of the Property as of December 31, 2005, the Manager has assumed that vacant office space of
121,144 sq. ft. or 10.9% of the Gross Rentable Area of the office space of the Property will be gradually
leased up at market rental rate over the course of 2006.

  Projected growth of market rental rates
      The Manager has assessed the market rent for relevant parts of the Property. The market rent is the
rent which the Manager believes could be achieved as and when a new tenancy is to be concluded and is

                                                     116
                                           PROFIT FORECAST

estimated with reference to the (a) effective rent payable pursuant to comparable tenancies of the Property
that have been recently concluded; and (b) the general market conditions for the Central Grade A office
market. In forecasting the market rent for the Property, the Manager also takes into account a variety of
property-specific factors, including but not limited to the (a) location of the Property; (b) age of the
Property; and (c) occupancy level of the Property. If a tenancy is scheduled to expire during the Forecast
Period, the effective rent payable under the new tenancy or renewed tenancy is assumed to be the market
rent on the expiry date. Since the tenancies are generally fixed for periods of two to three years, the
difference between the market rental rates achieved for the new or renewed tenancies and the rental rates on
the previous (expiring) tenancies will effectively reflect the cumulative increase/decrease of the market
rental rates since the commencement of the previous (expiring) tenancies.

      The Manager projects that the market rental rate of the office space of the Property as at December 31,
2006 will be 43% higher than the achieved market rental rate as at December 31, 2005. The Manager
believes that the projected growth rate is reasonable for the purposes of the profit forecast. No projection has
been made with respect to the retail space of the Property which is subject to existing tenancies with expiry
dates after December 31, 2006.

  Carpark income

     Carpark income comprises income earned from the operation of the Property’s private carparking
spaces and public carpark. Carpark income is generated on an hourly and monthly basis.

       The projected carpark income is calculated based on the historical trends and the expected rate of
utilization of the carpark. The Manager has forecasted carpark income of HK$5.9 million for the Forecast
Period.

  Building management fee income

      Building management fee represents the management fee paid under the DMC. For leased areas,
building management fee is billed and recovered from tenants based on the amount payable under the DMC
without any mark-up. For vacant space, building management fee is borne by the landlord but a partial
rebate is applicable if a certain minimum portion of a floor is vacant and no air-conditioning is used.

      The projected building management fee income assumes that no change in the unit rate will be
imposed by the DMC Manager for Citibank Plaza and is calculated based on the projected occupancy of the
Property during the Forecast Period. The Manager has forecasted building management fee of HK$46.5
million for the Forecast Period.

Rental Related Income

     The Manager has assumed that there will not be any surplus on forbearance fee, interest income from
tenants or other rental related income for the Forecast Period.

Rental Related Outgoings

      In preparing the profit forecast, the Manager has made an assessment of each line item of the expenses
for the Property for the Forecast Period. These expenses are associated with the operation of the New
Property Companies, comprising (a) building management fee; (b) carpark operating costs; (c) Government
rent and rates; (d) lease agency fee; (e) property and lease management services fees; (f) property marketing
services fees; (g) legal cost and stamp duty; (h) property miscellaneous expenses; and (i) repairs and
maintenance.

                                                      117
                                          PROFIT FORECAST

  Building management fee

      The Manager assumes that no change in the unit rate will be imposed by the DMC Manager for
Citibank Plaza and projects the building management fee to be HK$48.5 million for the Forecast Period.

  Carpark operating costs

     Carpark operating costs comprises costs relating to the operation of the public carpark and are
estimated to be HK$0.8 million, which is comparable to that for the year ended December 31, 2005.

  Government rent and rates

      It is assumed that the current level of Government rates which are assessed at 5.0% per annum of the
rateable value of the Property and Government rent which is assessed at 3.0% per annum of the same
rateable value will continue to be levied. Government rates in respect of Gross Rentable Area leased are
billed and recovered from the tenants based on the amount payable to the Government without any mark-up
while Government rent is borne by the landlord. Based on the projected occupancy and the rateable value
for the Property, Government rent and rates are projected to be HK$10.4 million.

  Lease agency fee

     Historically, the Group Companies’ direct costs included lease agency fees payable to The Great
Eagle Estate Agents Limited, as well as to other third parties, in connection with the lease-up of the
Property. With effect from the Listing Date, Champion REIT will no longer pay lease agency fees to The
Great Eagle Estate Agents Limited and the lease agency agreements will be replaced by the Property
Management Agreement.

      Champion REIT will continue to pay lease agency fees to third party agents. Based on the projected
lease-up and renewal schedule of the Property during the Forecast Period, lease agency fees are projected to
be HK$9.4 million.

  Property and lease management services fees

     Champion REIT has entered into the Property Management Agreement with the Property Manager
which will receive from the New Property Companies a fee of 3.0% per annum of the Gross Property
Revenue of the Property for the provision of property and lease management services. Property and lease
management services fees are projected to be HK$7.7 million for the Forecast Period.

  Property marketing services fees

    Property marketing services fees are payable to the Property Manager by each New Property
Company for securing new tenants based on the following schedule:
     (    One month’s base rent for securing a tenancy of three years or more;
     (    One-half month’s base rent for securing a tenancy of less than three years;
     (    One-half month’s base rent for securing a renewal of tenancy irrespective of duration of the
          renewal term; and
     (    10.0% of the total licence fee for securing a licence for a duration of less than 12 months.

     Property marketing services fees are projected to be HK$1.3 million, based on the projected lease-up
and renewal schedule for the Property during the Forecast Period.

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                                          PROFIT FORECAST

  Legal cost and stamp duty
      Legal cost and stamp duty represents legal cost and stamp duty incurred when new tenancies were
entered into. Legal cost and stamp duty is projected to be HK$1.3 million, based on the expected number of
new tenancies that will be entered into during the Forecast Period.

  Property miscellaneous expenses
      Property miscellaneous expenses comprise primarily advertising, premium for business interruption
insurance and other miscellaneous expenses and are projected to be HK$2.6 million for the Forecast Period.

  Repairs and maintenance
     Repairs and maintenance expenses, which are generally incurred as a result of fitting out work
undertaken prior to the commencement of a new tenancy, are projected to be HK$1.5 million, based on the
expected level of new letting activities during the Forecast Period.

Manager’s Fee
      Under the Trust Deed, provided that Champion REIT achieves net property income (before deduction
therefrom of the Manager’s Fee) of HK$270 million for the period from the Listing Date to December 31,
2006, the Manager will receive a Manager’s Fee of 12% of the net property income of Champion REIT
(before deduction therefrom of the Manager’s Fee) for such period.
    Based on a projected net property income of HK$225.7 million, the Manager will receive no
Manager’s Fee for the Forecast Period.

Acquisition Fee and Divestment Fee
     It is assumed that there will be no acquisition or divestment during the Forecast Period. Hence, no
acquisition or divestment fee has been included in the profit forecast.

Trustee’s Fee and Expenses
    The Trustee is entitled to receive a remuneration not exceeding 0.03% per annum of the value of the
Deposited Property, subject to a minimum fee of HK$200,000 per month.
      Other trust expenses include recurring operating expenses of Champion REIT including annual listing
fees, registrar fees, accounting fees, audit and tax advisor’s fees, costs associated with the preparation and
distribution of reports to Unitholders and other miscellaneous expenses.
     The Trustee’s fee and expenses for the Forecast Period are estimated to be HK$4.4 million which are
assumed to be non-tax deductible.

Fitting out works of investment properties written off /Administrative Expenses
     The Manager projects that expenses associated with the write-off of fitting out works of investment
properties and administrative expenses for the Forecast Period will be HK$1.6 million.

Increase in fair value of investment properties
      The Manager considers that there is no reliable basis for determining the market value of the Property
as of any future date. Accordingly, the Manager assumes that the market value of the Property as at
December 31, 2006 will be the same as the Appraised Value. Hence, the profit forecast does not show any
increase or decrease in fair value of investment properties.

                                                     119
                                            PROFIT FORECAST

Finance Costs and Interest Rate Swaps

      On the Listing Date, the Finance Company will have in place the Facility in the amount of HK$7,200
million for a term of five years from the Listing Date, comprising a term loan in the amount of HK$7,000
million to be drawn down on the Listing Date by the Finance Company and on-lent to the New Property
Companies, and a HK$200 million revolving credit facility which will remain undrawn as of the Listing
Date. A front-end fee of HK$36.0 million, payable on the Listing Date, will be paid by the Finance
Company in respect of the Facility. The Facility will bear interest on a floating rate basis.

      Each of the New Property Companies has entered into an interest rate swap agreement for a term of
five years, effective on the Listing Date, with Merrill Lynch Capital Markets Bank Limited. The swaps are
for a total notional amount equivalent to the amount of the term loan under the Facility, or HK$7,000
million, and upfront swap payments of HK$1,417.0 million in aggregate are to be paid by the New Property
Companies on the Listing Date.

     The interest rate swap has a ‘‘step-up’’ structure, in that the cash finance costs payable by the
New Property Companies increase over the life of the swap. See the section headed ‘‘Certain Factors
Affecting Future Results of Operations and Financial Condition — Change in Nature of Existing
Costs — Finance Costs and Interest Rate Swaps’’ in this Offering Circular.

      Finance costs will be HK$196.5 million, which includes cash finance costs of HK$10.6 million. The
finance costs for the Forecast Period are projected to be higher than the historical period primarily because
of the significant increase in borrowings.

Hong Kong Taxation

      Tax expense is determined on the basis of tax effect accounting using the liability method. Tax
expense has two components, current tax and deferred tax. Current tax expense is the amount of tax payable
to the Inland Revenue Department in Hong Kong based on the relevant year’s taxable profits. The current
tax rate is 17.5%.

       Deferred taxation is provided for all temporary differences between the carrying amounts of assets and
liabilities in the balance sheet and their tax bases, and deferred tax assets are recognized to the extent that it
is probable that future taxable profits will be available against which the deductible temporary differences
and unused tax losses can be utilized. The temporary differences comprise available tax losses and
accelerated tax depreciation for the purpose of the profit forecast. Non-deductible expenses include
Trustee’s fee and expenses and other miscellaneous non-deductible items. While the Manager will seek to
achieve tax deductibility on the portion of the Manager’s Fee that will be recharged to the New Property
Companies, there is no certainty that such amounts will in fact be tax deductible.

     No provision for current tax is projected as no assessable profit has been projected for the Forecast
Period. Provision of HK$5.1 million for deferred taxation has been projected for the Forecast Period in
respect of the temporary difference in respect of accelerated tax depreciation and available tax losses.

Adjustments

      In accordance with the Trust Deed, Annual Distributable Income is arrived at after eliminating the
effects of the Adjustments from the consolidated audited net profit after tax of Champion REIT. The
Adjustments for the Forecast Period are projected to be HK$191.1 million, which consists of:
      (    HK$186.0 million in respect of the non-cash portion of the finance cost; and
      (    HK$5.1 million in respect of deferred taxation.

                                                       120
                                          PROFIT FORECAST

Costs Associated with Listing
      The costs and expenses associated with the establishment of Champion REIT, the issue of Units under
the Global Offering and the listing of the Units will be borne by Champion REIT. Such costs and expenses,
excluding underwriting commission of 2.5% of the proceeds of the Global Offering, are estimated to be
HK$76.6 million in aggregate. Of the HK$76.6 million, an estimated HK$45.3 million, together with the
underwriting commission, will be charged against the issued equity in the balance sheet while the remainder
will be charged to the income statement as expenses. For the purpose of the Profit Forecast, the portion that
is charged to the income statement of HK$31.3 million is excluded since it is a non-recurring item.
      The costs associated with the listing will be charged to equity or as expenses in accordance with Hong
Kong Accounting Standard 32, under which ‘‘the transaction costs of an equity transaction are accounted for
as deduction from equity (net of any related income benefit) to the extent they are incremental costs directly
attributable to the equity transaction that otherwise would have been avoided. The costs of an equity
transaction that is abandoned are recognized as an expense’’.

Accounting Standards
      The Manager has assumed no change in applicable accounting standards or other financial reporting
requirements that may have a material effect on the forecast or projected net operating profit during the
Forecast Period.

Other Assumptions
     The Manager has made the following additional assumptions in preparing the profit forecast for the
Forecast Period:
     (    the property portfolio remains unchanged throughout the period;
     (    there will be no material change in the physical condition of the Property;
     (    no further capital will be raised during the period;
     (    there will be no change in taxation legislation or other applicable legislation;
     (    there will be no change to the REIT Code;
     (    The expired tenancy will be renewed at the forecasted rental rate in accordance with the
          forecasted probability rate and all tenancies are enforceable and tenants will perform their
          obligations thereunder in accordance with their respective terms;
     (    there will be no material change in the existing political, legal, fiscal, market, business or
          economic conditions in Hong Kong;
     (    there will be no change in legislation, regulations or rules in Hong Kong or any other country or
          territory which may materially and adversely affect the business of Champion REIT;
     (    there will be no material changes in prevailing tax rate, interest rates and exchange rates;
     (    there will be no material adverse change in the office demand and supply for the Grade A office
          market in general, and specifically for the Central district, throughout the period;
     (    there will be no change in the property value. This has been assumed because in the opinion of
          the Manager, there is no reasonable basis to arrive at the open market value for the Property at a
          future date. As a result, deferred taxation relating to the change in the fair value of Property
          throughout the periods will not arise;

                                                     121
                                              PROFIT FORECAST

     (     there will be no change in fair value of financial instruments including the interest rate swaps
           entered into by the New Property Companies since it is not practical to predict the market value
           as of any future date; and
     (     the Manager will distribute 100% of Annual Distributable Income to Unitholders and there is no
           reinvestment arrangement.

Distribution Reinvestment Arrangement

      The Trust Deed allows the Manager, where appropriate, the option of activating an arrangement
whereby Unitholders may elect to re-invest all or part of their distribution entitlement in return for an issue
of additional Units in Champion REIT. It has been assumed that the Manager will not activate the
distribution reinvestment arrangement for the Forecast Period.

Sensitivity Analysis

     The forecast and projected distributions included in this Offering Circular are based on a number of
assumptions that have been outlined above. The forecast 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 in this Offering Circular are to be expected. To assist investors in assessing the
impact of these assumptions on the financial forecast, tables demonstrating the sensitivity of the annualized
projected 2006 distribution and profit yields to changes in Rental Income, operating expenses and assumed
fair value of the Property as of December 31, 2006 are set forth below. As the New Property Companies
have entered into the interest rate swaps, changes in interest rates will have no impact on the DPU of
Champion REIT during the five-year life of the swap arrangements.

     The sensitivity analysis is intended to provide a guide only and variations in actual performance could
exceed the ranges shown. In addition, movement in other variables may offset or compound the effect of a
change in any variable beyond the extent shown.

      The following table illustrates the effect of an increase/decrease of 5% in Rental Income on the
annualized projected 2006 distribution and profit yields (after taking into account the effect of the
Distribution Waiver) based on the Maximum Offer Price and the Minimum Offer Price, assuming all other
assumptions remain unchanged:
                                                                          For the Forecast Period
                                         Annualized distribution   Annualized profit Annualized distribution   Annualized profit
                                           yield based on the       yield based on       yield based on the     yield based on
                                            Maximum Offer           the Maximum            Minimum Offer        the Minimum
                                                 Price(1)            Offer Price(1)
                                                                                               Price(1)          Offer Price(1)

Rental Income
  5% decrease in Rental Income *****             4.55%                  0.12%                5.23%                  0.14%
  Annualized yield as shown in the
    profit forecast(2) ***************           4.84%                  0.42%                5.57%                  0.48%
  5% increase in Rental Income *****             5.14%                  0.72%                5.91%                  0.82%

     The following table illustrates the effect of an increase/decrease of 5% in operating expenses on the
annualized estimated 2006 distribution and profit yields (after taking into account the effect of the




                                                           122
                                                      PROFIT FORECAST

Distribution Waiver) based on the Maximum Offer Price and the Minimum Offer Price, assuming all other
assumptions remain unchanged:
                                                                                  For the Forecast Period
                                                 Annualized distribution   Annualized profit Annualized distribution    Annualized profit
                                                   yield based on the       yield based on       yield based on the      yield based on
                                                    Maximum Offer           the Maximum            Minimum Offer         the Minimum
                                                         Price(1)            Offer Price(1)            Price(1)           Offer Price(1)

Operating expenses
 5% increase in operating expenses**                     4.75%                  0.32%                 5.46%                  0.37%
 Annualized yield as shown in the
    profit forecast(2) **************                    4.84%                  0.42%                 5.57%                  0.48%
 5% decrease in operating expenses                       4.94%                  0.51%                 5.68%                  0.59%
      The following table illustrates the effect of an increase/decrease of HK$500 million in the fair value of
the Property as of December 31, 2006 compared to the Appraised Value of HK$22,670 million on the
annualized estimated 2006 distribution and profit yields (after taking into account the effect of the
Distribution Waiver) based on the Maximum Offer Price and the Minimum Offer Price, assuming all other
assumptions remain unchanged:
                                                                                   For the Forecast Period
                                                     Annualized distribution Annualized profit Annualized distribution Annualized profit
                                                       yield based on the     yield based on      yield based on the    yield based on
Assumed fair value of the Property as of                Maximum Offer         the Maximum          Minimum Offer        the Minimum
                                                                   (1)                     (1)               (1)
December 31, 2006                                            Price             Offer Price              Price            Offer Price(1)

HK$23,170 million *******************                        4.84%                 9.97%               5.57%                11.47%
HK$22,670 million (equivalent to the
 Appraised Value) *******************                        4.84%                 0.42%               5.57%                 0.48%
HK$22,170 million *******************                        4.84%                (9.14%)              5.57%               (10.51%)

Notes:
(1)      The annualized yields for the Forecast Period are provided for illustrative purposes only and have included any
         increase/decrease in fair value of the Property as of December 31, 2006. Deferred taxation associated with any
         increase/decrease in fair value of the Property is calculated based on the current tax rate of 17.5%. Investors should note that
         GE Holder (together with Great Eagle as guarantor) has entered into a deed of guarantee with the Trustee and the Manager
         pursuant to which GE Holder has guaranteed that the DPU of Champion REIT for the period from Listing Date to
         December 31, 2006 will not be less than HK$0.1694.
(2)      Based on assumptions set out above in preparing the profit forecast.




                                                                   123
                                        STATEMENT OF DISTRIBUTION

     GE Holder (together with Great Eagle as guarantor) has entered into a deed of guarantee with the
Trustee and the Manager pursuant to which GE Holder has guaranteed that the DPU of Champion REIT
payable for the FY06 Distribution Period to holders of Units with respect to which distributions have not
been waived will not be less than HK$0.1694 (after taking into account the effect of the Distribution Waiver
and assuming any applicable top-up payment obligations of GE Holder, KP Holder and Wing Tai under the
deed relating to the Distribution Waiver are performed). See the section headed ‘‘Material Agreements and
Other Documents Relating to Champion REIT — DPU Guarantee Deed’’ in this Offering Circular.
      In addition, each of GE Holder (together with Great Eagle as guarantor), KP Holder (together with
Kerry Properties as guarantor) and Wing Tai (together with Great Eagle as guarantor) has entered into a
deed with the Trustee and the Manager pursuant to which it has agreed to waive its entitlement to receive
any distributions payable (a) for the FY06 Distribution Period with respect to all of the Units it holds as of
the Listing Date; (b) for the FY07 Distribution Periods with respect to 55% of the Units it holds as of the
Listing Date and (c) for the FY08 Distribution Periods with respect to 20% of the Units it holds as of the
Listing Date. Each such portion of the distributions waived will be available for distribution to holders of
Units with respect to which distributions have not been waived.
      Other than the above guarantee and the Distribution Waiver, none of Champion REIT, the Manager,
the Trustee, the Underwriters, Great Eagle, GE Holder, Kerry Properties, KP Holder, Wing Tai, the Vendor
Companies or any other person guarantees the performance of Champion REIT, the repayment of capital or
the payment of any (or any particular) return on the Units.

Period from the Listing Date to December 31, 2006
      Unitholders will be paid, in the absence of unforeseen circumstances, a distribution per Unit of not
less than HK$0.1694 in respect of the FY06 Distribution Period (after taking into account the effect of the
Distribution Waiver). In the event that the actual achieved DPU is below this amount for the FY06
Distribution Period, GE Holder will make up the shortfall in the form of a cash contribution to Champion
REIT (assuming any applicable top-up payment obligations of GE Holder, KP Holder and Wing Tai under
the deed relating to the Distribution Waiver are performed).
        The following table sets forth certain distribution data and forecasted yields for the Forecast Period.
                                                                                             For the Forecast Period
                                                                                         Based on the       Based on the
                                                                                          Minimum            Maximum
                                                                                         Offer Price of     Offer Price of
                                                                                           HK$5.00            HK$5.75

Forecasted distribution per Unit (HK$) of the Units held by Public
  Unitholders as of record date for FY06 Distribution Period (after
  taking into account the effect of the Distribution Waiver)************                     0.1694            0.1694
Forecasted annualized profit yield after taxation
  Before taking into account the effect of the Distribution Waiver ******                       0.22%             0.19%
  After taking into account the effect of the Distribution Waiver *******                       0.48%             0.42%
Forecasted annualized distribution yield after taxation
  Before taking into account the effect of the Distribution Waiver(1) *****                     2.51%             2.18%
  After taking into account the effect of the Distribution Waiver(1) **                         5.57%             4.84%

Note:
(1)     Excluding brokerage of 1%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.005%.

      Investors should note that the DPU during the five-year term of the Facility will be enhanced by
the interest rate swaps, that such enhancement effect will diminish over the five-year term and that
therefore the Annual Distributable Income will decrease during the five-year period of the interest

                                                            124
                                  STATEMENT OF DISTRIBUTION

rate swaps in the absence of increased net property income. Investors should also note that the DPU
for the FY06 Distribution Period, FY07 Distribution Periods and FY08 Distribution Periods would
decrease in the absence of any increase of Annual Distributable Income during such three-year
period, and that only the DPU for the FY06 Distribution Period has been guaranteed by Great Eagle.
There is no assurance that the DPU for future periods will not decrease.

BASES AND ASSUMPTIONS
      The above projected distribution yields are calculated based on the Maximum Offer Price and the
Minimum Offer Price (excluding brokerage of 1%, Hong Kong Stock Exchange trading fee of 0.005% and
SFC transaction levy of 0.005%). The distribution yield obtained by investors who purchase Units in the
secondary market at a market price that differs from the Maximum Offer Price or Minimum Offer Price,
calculated using such secondary market purchase price, will accordingly differ from the distribution yields
stated above.




                                                   125
                                    UNAUDITED PRO FORMA BALANCE SHEET

      The following table sets out the unaudited pro forma balance sheet of Champion REIT as of the
Listing Date following the completion of the Reorganization, the issuance of the Units pursuant to the
Global Offering and the drawdown of the term loan of HK$7,000 million under the Facility Agreement and
should be read in conjunction with the report from Deloitte Touche Tohmatsu set out in Appendix II.
                                                                                                       Based on            Based on
                                                                                                     the Minimum        the Maximum
                                                                                                      Offer Price         Offer Price
                                                                                                      of HK$5.00           of $5.75
                                                                                                              (HK$ millions)
Assets
Investment Properties(1)********************************************                                     22,670              22,670
Hedging instrument(2) *********************************************                                       1,417               1,417
Other assets(3) ***************************************************                                          10                  10
Cash at bank ****************************************************                                           250                 250
                                                                                                         24,347              24,347
Liabilities
Rental deposits, accruals and other payables **************************                                     (82)                (82)
Accrual for stamp duty(4) ******************************************                                       (850)               (850)
Provision for taxation(5) *******************************************                                      (168)               (168)
Amount drawn down under the Facility(6) *****************************                                    (7,000)             (7,000)
Debt establishment cost *******************************************                                          36                  36
                                                                                                         (8,064)             (8,064)
                                                                                                         16,283              16,283
Amounts attributable to unitholders of the trust
Issued equity ****************************************************                                       13,714              15,771
Retained earnings(7)***********************************************                                       2,769                 735
Issue costs(8) ****************************************************                                        (200)               (223)
                                                                                                         16,283              16,283


Notes:

(1)      Investment properties are stated at their fair market value determined by the Independent Property Valuer, on February 28,
         2006. The Directors of the Manager consider that there is no material change in the fair market value of the Property in the
         period from February 28, 2006 to the Listing Date.

(2)      Hedging instrument refers to the five-year interest rate swap agreements entered into between each of the New Property
         Companies and the swap counterparty, Merrill Lynch Capital Markets Bank Limited. The interest rate swaps are accounted for
         in the balance sheet on the basis that their fair market values as at the Listing Date would be the same as the upfront payments
         payable in respect thereof.

(3)      Other assets include rental receivables, other receivables, deposits and prepayments.

(4)      Accrual for stamp duty is payable upon the legal assignment of the Property from the relevant Predecessor Property Companies
         to the New Property Companies pursuant to the Property Sale and Purchase Agreements. Such accrual has been made based on
         the current stamp duty rate of 3.75% and the stated consideration in the Property Sale and Purchase Agreements.

(5)      Provision for taxation refers to provision for profits tax payable by the Predecessor Property Companies in respect of
         transactions entered into up to the Listing Date.

(6)      Champion REIT has entered into a Facility Agreement with a group of banks in the principal amount of HK$7,200 million.
         The Facility comprises a HK$7,000 million term loan facility (which will be fully drawn on the Listing Date and will be fully
         repaid after five years from the date of draw down) and a HK$200 million revolving credit facility (which will remain undrawn
         as of the Listing Date), each for a term of five years.

                                                                   126
                                 UNAUDITED PRO FORMA BALANCE SHEET

(7)   The amount represents the difference of: (a) the sum of (i) the fair market value of the Property as determined by the
      Independent Property Valuer as of February 28, 2006 of HK$22,670 million and (ii) adjustment for other assets and liabilities
      acquired by Champion REIT pursuant to the Reorganization of HK$10 million; and (b) the sum of (i) Implied Purchase Price
      of HK$19,030 million based on the Minimum Offer Price and HK$21,064 million based on the Maximum Offer Price;
      (ii) accrual for stamp duty of HK$850 million; and (iii) the portion of issue costs that is expensed of HK$31 million.
(8)   Issue costs include the portion of the issue costs that is charged against the issued equity in the balance sheet and comprises
      primarily underwriting commissions payable to the Underwriters.


      The NTA per Unit as of the Listing Date is expected to be HK$5.94, before taking into account the
effect of any purchase price adjustment for the acquisition of the Holding Company Shares. The NTA per
Unit is calculated based on the unaudited net tangible assets, which is equivalent to total Unitholders’ equity
of HK$16,283 million as shown above and 2,742.7 million Units expected to be in issue. The Minimum
Offer Price represents a 15.8% discount to the NTA per unit and the Maximum Offer Price represents a
3.1% discount to the NTA per Unit.




                                                               127
STRUCTURE, MANAGEMENT AND AGREEMENTS




                128
                   REORGANIZATION, STRUCTURE AND ORGANIZATION OF
                                   CHAMPION REIT

      Champion REIT is a real estate investment trust formed primarily to own and invest in an income                 7.7
producing portfolio of office and retail properties and was established as part of an internal reorganization of
part of Great Eagle’s real estate portfolio. The Reorganization was effected in the manner described below.
      Champion REIT was constituted by the Trust Deed entered into on April 26, 2006 between the                      B2(f)
Manager and the Trustee. On April 26, 2006, Great Eagle entered into a subscription agreement with the
Manager pursuant to which the Manager issued, at the direction of Great Eagle, an aggregate of
1,508,490,809 Units as follows: 1,349,495,877 Units to GE Holder, 114,796,151 Units to KP Holder and
44,198,781 Units to Wing Tai. See the section headed ‘‘Material Agreements and Other Documents
Relating to Champion REIT — Subscription Agreement’’ in this Offering Circular. On April 26, 2006, the
Trustee, as trustee of Champion REIT, entered into the Reorganization Agreements with the relevant Vendor
Companies pursuant to which the Trustee acquired the Holding Company Shares from the relevant Vendor
Companies. Completion of the Reorganization took place on April 26, 2006.
      The Holding Companies together indirectly own the entire legal and beneficial interest in the Property.
Of the six Holding Companies acquired by the Trustee pursuant to the Reorganization, four Holding
Companies were indirect wholly-owned subsidiaries of Great Eagle while two Holding Companies were
indirectly owned by Great Eagle (85.9%), Kerry Properties (10.2%) and Wing Tai (3.9%). See the section
headed ‘‘Material Agreements and Other Documents Relating to Champion REIT — Reorganization
Agreements’’ in this Offering Circular for further details of the Reorganization.
      Immediately following the completion of the Reorganization, the Predecessor Property Companies
entered into the Property Sale and Purchase Agreements with the New Property Companies pursuant to
which each New Property Company agreed to acquire the entire portion of the Property owned by the
relevant Predecessor Property Company. The Property Sale and Purchase Agreements are conditional upon
the listing of Champion REIT on the Hong Kong Stock Exchange on or before December 31, 2006. Upon
the Property Sale and Purchase Agreements becoming unconditional, the consideration will be paid by the
New Property Companies to the Predecessor Property Companies on the Listing Date. The Property Sale
and Purchase Agreements form part of the pre-listing reorganization undertaken by Champion REIT in part
to fully exploit its ability to raise debt finance within the confines of the gearing restrictions contained in the
REIT Code. Under such Property Sale and Purchase Agreements, the New Property Companies have agreed
to acquire the Property from the Predecessor Property Companies at market value. Champion REIT, through
its 100% ownership of the Predecessor Property Companies and the New Property Companies, owns the
legal and beneficial title to the Property. The New Property Companies will be entitled to deduct, in arriving
at profits assessable to profits tax, interest payable to the Finance Company in respect of the full amount
borrowed by the Finance Company under the Facility Agreement and on-lent to the New Property
Companies to finance the acquisition of the Property from the Predecessor Property Companies. Similarly,
the Finance Company will be entitled to deduct, in arriving at profits assessable to profits tax, interest
payable to the banks on the full amount it borrows under the Facility Agreement.
      Legal assignment of the relevant portion of the Property will take place on the earlier of: (a) such date
as may be notified by the relevant New Property Company to the relevant Predecessor Property Company by
not less than 14 clear days’ notice in writing; and (b) the 10th anniversary of the date of the relevant
Property Sale and Purchase Agreement. Based on tax advice obtained by the Manager from leading counsel,
the Property Sale and Purchase Agreements will not be chargeable with Hong Kong ad valorem stamp duty
under the Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong). Such stamp duty will only be
payable on the legal assignment of the Property to the New Property Companies at the then prevailing Hong
Kong ad valorem stamp duty rate. Currently, the amount of such stamp duty is determined on the basis of
the higher of (a) the consideration for the transfer of the Property as stated in the Property Sale and Purchase
Agreements; and (b) the market value of the Property as at the date of the Property Sale and Purchase
Agreements. The Manager believes that the consideration as stated in the Property Sale and Purchase
Agreements reflects the market value of the Property as of the date of the Property Sale and Purchase

                                                       129
                  REORGANIZATION, STRUCTURE AND ORGANIZATION OF
                                  CHAMPION REIT

Agreements. Stamp duty payable on the legal assignment of the Property would amount to approximately
HK$850.1 million at the current stamp duty rate of 3.75%, based on the stated consideration in the Property
Sale and Purchase Agreements. Under the Property Sale and Purchase Agreements, such stamp duty would
be payable by the respective New Property Companies (and effectively by Champion REIT since it wholly
owns the New Property Companies). The Manager intends to hold the Property for long-term investment
purposes. In the event that the Property (or any part thereof) is sold by the New Property Companies to a
third party purchaser, prior to the date of such legal assignment, the Property (or part thereof) will be
assigned by the Predecessor Property Companies directly to the third party purchaser. Assuming such sale
was conducted in accordance with current Hong Kong conveyancing practice, the third party purchaser
would, subject to negotiations at the relevant time, bear the stamp duty on such assignment. See the sections
headed ‘‘Material Agreements and Other Documents Relating to Champion REIT — Property Sale and
Purchase Agreements’’ and ‘‘Risk Factors — Risks Relating to Champion REIT’s Organization and
Operations — Champion REIT may have to raise further equity and/or debt to fund stamp duty payment
required in connection with the Property Sale and Purchase Agreements and may be subject to such stamp
duty prior to the actual completion of the sale and purchase of the Property by the New Property
Companies’’ in this Offering Circular for further details. In the event that the Property (or any part thereof)
is sold by the New Property Companies at a loss, such loss would reduce both the accounting profit and the
Annual Distributable Income of Champion REIT, and it is possible that there will be no Annual
Distributable Income if the loss incurred on the disposal of the Property is significant. However, the
Manager has the discretion to distribute to Unitholders all or part of the proceeds from the disposal of the
Property net of transaction costs (including any stamp duty, if any, to be borne by Champion REIT), subject
to appropriate provision being made for the liabilities of Champion REIT at the relevant time.




                                                     130
                                  REORGANIZATION, STRUCTURE AND ORGANIZATION OF
                                                  CHAMPION REIT

      Immediately before the Global Offering, all the Units were owned by Great Eagle (89.5%, through GE
Holder, its wholly-owned subsidiary), Kerry Properties (7.6%, through KP Holder, its wholly-owned
subsidiary) and Wing Tai (2.9%). The following diagram illustrates the ownership structure of Champion
REIT immediately following the completion of the Global Offering (before any exercise of the Over-
allotment Option). After the completion of the Global Offering, the percentages of Unitholdings may vary
according to whether the Over-allotment Option is exercised, and whether it is exercised in whole or in part.


                                                                                                  Unitholders
                                                                                         Great Eagle                  49.2%
                                                                                         Kerry Properties             4.2%
                                                                                         Wing Tai                     1.6%
                                                                                         Public Unitholders           45.0%




                                                                                               CHAMPION REIT




           Fuscastus                     Harvest Star                 East Power                 Cojoin Properties             Portion A (BVI)                Portion B (BVI)          CP Finance (BVI)
           Limited(1)                     Limited(1)                  Limited(1)                    Limited(1)                   Limited(1)                     Limited(1)               Limited(1)(2)




  Shine Hill                        Maple                                                    Well Charm                        CP                            CP
                    CP (SH)                      CP (MC)          Panhy       CP (PH)                       CP (WC)                       CP (A1)                        CP (B1)         CP Finance
 Development                         Court                                                   Development                   (Portion A)                   (Portion B)
                  Limited(2)(3)                 Limited(2)(3)   Limited(3)   Limited(2)(3)                 Limited(2)(3)                 Limited(2)(3)                 Limited(2)(3)     Limited(2)(3)
  Limited(3)                       Limited(3)                                                 Limited(3)                    Limited(3)                    Limited(3)




Notes:
(1)      Incorporated in the British Virgin Islands.
(2)      Newly incorporated wholly-owned subsidiaries of Champion REIT.
(3)      Incorporated in Hong Kong.




                                                                                                131
                       REORGANIZATION, STRUCTURE AND ORGANIZATION OF
                                       CHAMPION REIT

      The following diagram depicts the ownership structure of Champion REIT and the primary contractual
relationships between Champion REIT, the Unitholders, the Manager, the Trustee, the Property Manager
and the DMC Manager upon completion of the Global Offering (before any exercise of the Over-allotment
Option).
                                                                       Unitholders
                                                              Great Eagle            49.2%
                                                              Kerry Properties       4.2%
                                                              Wing Tai               1.6%
                        Great Eagle
                                                              Public Unitholders     45.0%


                                                          Investment in
                                     100%                Champion REIT               Distributions



                                              Manager’s Fee                                          Trustee Fee


                         Manager                                    CHAMPION REIT
                                                                      CHAMPION                                                Trustee
                                               Management               REIT                         Holds assets
                                                Services(1)                                          on trust for
                                                                                                     Unitholders
                                                          Ownership of
                                                            shares
                                                                   100%           Distributions
                                                                                                                100%
                                               Property and
                                                  lease
                                               management
          100%                                     fees
                                                                                                     Interest
                        Property                                    Holding Companies and                                    Finance
                        Manager(2)                                   Property Companies                                      Company
                                               Property and                                             Loan
                                                   lease
                                               management
                                                services(2)

                                   DMC                               100%
                               management fees




          100%

                      DMC Manager

                                                                         The
                                                                       Property
          100%                                       DMC
                                                  management
                    DMC Sub-manager               services(3)


      Legend

                   Payments and services pursuant to contractual relationships under Trust Deed, Property Management Agreement and DMC


Notes:
(1)      The Manager will provide management services to Champion REIT and the New Property Companies. The Manager will
         receive a Manager’s Fee from Champion REIT. See the section headed ‘‘The Manager — Fees, Costs and Expenses of the
         Manager’’ in this Offering Circular.




                                                                      132
                     REORGANIZATION, STRUCTURE AND ORGANIZATION OF
                                     CHAMPION REIT

(2)   The Property Manager will provide property and lease management services to the New Property Companies pursuant to the
      Property Management Agreement. The Property Manager will receive property and lease management fees from the New
      Property Companies. See the section headed ‘‘Material Agreements and Other Documents Relating to Champion REIT —
      Property Management Agreement’’ in this Offering Circular.
(3)   The DMC Manager has a general power of management in relation to Citibank Plaza in accordance with the provisions of the
      DMC, which has been delegated to the DMC Sub-manager. Each New Property Company, as an owner of a portion of the
      Citibank Plaza, is obliged to pay management fees to the DMC Manager pursuant to the DMC. See the section headed ‘‘The
      DMC Manager’’ in this Offering Circular.




                                                            133
                                             THE MANAGER


OVERVIEW

      Champion REIT is organized 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
Licensing 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 Champion 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 CHAMPION REIT

      The Manager, Eagle Asset Management (CP) Limited, was incorporated in Hong Kong on January 12,              B4(a)(i)
2006 and is a wholly-owned subsidiary of Great Eagle. It has a paid-up capital of HK$5 million and its
registered office is located at Suite 2804, 28/F, Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong.

      The Manager has a general power of management over the assets of Champion REIT. The Manager’s               B2(k)
main responsibility is to manage the assets of Champion REIT for the benefit of the Unitholders and the           B4(a)(ii)
Manager is not involved in any other REIT. The Manager will set the strategic direction and risk
management policies of Champion REIT and give recommendations to the Trustee on the acquisition,
divestment or enhancement of assets of Champion REIT in accordance with its stated investment strategy.
The Manager will manage the assets of Champion REIT in accordance with the Manager’s strategy as stated
in the section headed ‘‘Strategy’’ in this Offering Circular and in accordance with the provisions of the
Trust Deed and the compliance procedures set forth herein. The Manager is licensed by the SFC to conduct
the regulated activity of asset management, as required by the REIT Code.

      Further, the Manager will prepare property plans on a regular basis, which may contain proposals and
forecasts on net income, capital expenditure, sales and valuations, explanations of major variances to
previous forecasts, written commentary on key issues and underlying assumptions on inflation, annual
income, occupancy costs and any other relevant assumptions. The purpose of these plans is to explain the
performance of Champion REIT’s assets.

     The Manager will be responsible for ensuring compliance with the applicable provisions of the REIT
Code, the SFO and all other relevant legislation, the Listing Rules, the Trust Deed and all relevant contracts.
The Manager will also be responsible for all regular communications with Unitholders.

     The Manager may require the Trustee to borrow on behalf of Champion REIT (upon such terms and                B2(j)
conditions as the Manager deems fit, including the charging or mortgaging of all or any part of the
Deposited Property) whenever the Manager considers, among other things, that such borrowings are
necessary or desirable in order to enable Champion REIT to meet any liabilities or to finance the acquisition
of any property. However, the Manager must not direct the Trustee to incur a borrowing if to do so would          7.9
mean that Champion REIT’s total borrowings exceed 45.0% (or such other limit as may be stipulated under
the REIT Code) of the Deposited Property as set out in Champion REIT’s latest published audited accounts
immediately prior to the time the borrowing is incurred.

      The Manager has an office location that is separate from the other Great Eagle entities. Great Eagle
will provide back-office support services to the Manager, comprising accounting services, corporate
secretarial services and services relating to the IT infrastructure system. These ancillary services will be
provided to the Manager for the sake of continuity of business operations and convenience and the Manager
considers that it is in Champion REIT’s interests to use such back-office support services. The cost of such
services will be borne by the Manager and will not be charged to Champion REIT.

                                                     134
                                                          THE MANAGER

ORGANIZATIONAL AND REPORTING STRUCTURE OF THE MANAGER

         The following diagram sets forth the organizational and reporting structure of the Manager.

                                                           Board of Directors
                                      Independent Non-executive      Non-executive Directors:
                                      Directors:
                                      Mr. CHA Mou Sing, Payson      Dr. LO Ka Shui (Chairman)
                                      Professor K.C. CHAN           Mr. ANG Keng Lam
                                      Mr. ELDON, David Gordon       Mr. CHENG Wai Chee, Christopher
                                      Mr. SHEK Lai Him, Abraham     Mr. LO Kai Shui
         Audit Committee                                                                                       Disclosures Committee
                                               Executive Director & Chief Executive Officer (RO):
                                                     Mr. STEWARDSON, Jeremy Bellinger




                            Chief Operating Officer          Chief Executive Officer         Chief Investment Officer
                                    (RO)                              (RO)                             (RO)
                            Mr. KWONG Chi Kwong             Mr. STEWARDSON, Jeremy            Mr. CHOO Chong Yao,
                                                                    Bellinger                         Patrick




                                                                                             Finance and Office
                            Internal Auditor          Compliance Manager                       Administration
                           Mr. LEE Kim Man,            Mr. AU Tat Wah,                            Manager
                                 Julian                     Steve                            Ms. SUNG Kar Wai,
                                                                                                   Rosana




Notes:
(1)      Dotted lines represent ad hoc reporting on a case by case basis.
(2)      ‘‘RO’’ means Responsible Officer.


THE BOARD OF DIRECTORS OF THE MANAGER                                                                                                  B4(a)(i)

     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 Champion REIT, including a system of internal controls and business risk management
processes.

      The Board comprises nine Directors, consisting of the Chief Executive Officer, four independent non-
executive Directors and four non-executive Directors. The Chief Executive Officer, Chief Operating Officer
and the Chief Investment Officer will be licensed by the SFC as Responsible Officers of the Manager 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.




                                                                   135
                                            THE MANAGER

DIRECTORS
      The Board is entrusted with the responsibility for the overall management of the Manager. The
following table sets forth information regarding the Directors:
Name                                                 Age                        Position

Non-executive Directors
Dr. LO Ka Shui ***************************           59     Chairman
Mr. ANG Keng Lam ***********************             59     Non-executive Director
Mr. CHENG Wai Chee, Christopher ***********          57     Non-executive Director
Mr. LO Kai Shui **************************           46     Non-executive Director
Executive Director and Responsible Officer
Mr. STEWARDSON, Jeremy Bellinger ********            53     Chief Executive Officer
Independent Non-executive Directors
Mr. CHA Mou Sing, Payson *****************           63     Independent Non-executive Director
Professor K.C. CHAN **********************           49     Independent Non-executive Director
Mr. ELDON, David Gordon *****************            60     Independent Non-executive Director
Mr. SHEK Lai Him, Abraham****************            60     Independent Non-executive Director

       Information on the business and working experience of the Directors is set out below:
       Dr. LO Ka Shui, aged 59, has been a member of the board of directors of Great Eagle since 1980 and
is now deputy chairman and managing director of the Great Eagle Group. He is a non-executive director of
The Hongkong and Shanghai Banking Corporation Limited, Shanghai Industrial Holdings Limited, Phoenix
Satellite Television Holdings Limited, Winsor Properties Holdings Limited, Melco International
Development Limited, City e-Solutions Limited, TOM Online Inc and China Mobile (Hong Kong) Limited.
He was also a director of Hong Kong Exchanges and Clearing Limited and The HSBC China Fund Limited
and a past chairman of the Listing Committees of the Main Board and the Growth Enterprise Market of the
Hong Kong Stock Exchange. He is a vice president of the Real Estate Developers Association of Hong
Kong, a trustee of the Hong Kong Centre for Economic Research and a board member of the Hong Kong
Airport Authority. He has more than 26 years’ experience in property and hotel development and investment
both in Hong Kong and overseas. Dr. Lo was awarded ‘‘Hotelier of the Year’’ in 2005 by the Asia Pacific
Hotel Industry Conference and was named the DHL/SCMP Hong Kong Business Person of the Year for
2005. In 2003, he was awarded the Gold Bauhinia Star by the Government for his contribution to the
territory’s health care and financial sectors.
     Dr. Lo graduated from McGill University with a Bachelor’s Degree of Science and from Cornell
University with a Doctor of Medicine (M.D.) Degree. He was certified in cardiology.
      Mr. ANG Keng Lam, aged 59, is the chairman of the board of directors of Kerry Properties. Prior to
his election as the chairman of Kerry Properties on August 1, 2003, he was the deputy chairman of the board
of directors and the joint managing director of Kerry Properties from August 9, 1999 to July 31, 2003 and
from May 9, 1996 to July 31, 2003, respectively. He is also a director of Kerry Holdings Limited, the
immediate holding company of Kerry Properties. He is the chairman of China World Trade Center Co., Ltd,
which is listed on the Shanghai Stock Exchange and a non-executive director of Allgreen Properties Limited
which is listed on the Singapore Stock Exchange.




                                                   136
                                           THE MANAGER

     Mr. Ang is also a member of the National Committee of the Chinese People’s Political Consultative
Conference. He has been a senior executive of the Kuok Group since 1976 and has been responsible for the
planning and development of many Kuok Group projects, including Heng Fa Chuen in Hong Kong and the
China World Trade Center in Beijing.
      Mr. Ang graduated from the University of Western Australia with a Bachelor’s Degree in Civil
Engineering and from the University of Toronto with a Master’s Degree in Business Administration. He also
attended and completed the International Advanced Management Program at Harvard Business School in
November 1998.
      Mr. CHENG Wai Chee, Christopher, aged 57, was appointed non-executive director of Winsor
Properties Holdings Limited in May 1997 and appointed chairman in August 2001. He is also a member of
the audit committee of the board of directors of Winsor Properties Holdings Limited. He is the chairman of
USI Holdings Limited and an independent non-executive director of several listed and unlisted companies in
Hong Kong, namely, NWS Holdings Limited, New World China Land Limited, PICC Property and
Casualty Company Limited and DBS Bank (Hong Kong) Limited.
     Mr. Cheng currently serves as a member of the board of the SFC, the Hong Kong Trade Development
Council and the Hong Kong Monetary Authority. He is the chairman of the Competition Policy Review
Committee and a former chairman of the Hong Kong General Chamber of Commerce. He is also the
chairman of the Standing Committee on Judicial Salaries and Conditions of Service. As a long-serving
former member of the Public Service Commission, he provided advice to the Government on the
formulation of human resources management policies and practices for the civil service. He is also a
Steward of the Hong Kong Jockey Club and serves on the Council of The University of Hong Kong.
Mr. Cheng was awarded the Gold Bauhinia Star in 2004 and O.B.E. in 1992. He is also a Justice of the
Peace.
    Mr. Cheng graduated from the University of Notre Dame, Indiana with a Bachelor of Arts in Business
Administration, and from Columbia University, New York with a Master’s Degree in Business
Administration.
     Mr. LO Kai Shui, aged 46, was appointed to the board of directors of Great Eagle in 1984 and is now
deputy managing director of the Great Eagle Group. He has more than 23 years’ experience in property
development and investment, and building construction.
     Mr. Lo graduated from Columbia University with a Bachelor’s Degree in Engineering.
     Mr. STEWARDSON, Jeremy Bellinger, aged 53, is the Chief Executive Officer, an Executive
Director and a Responsible Officer of the Manager. He has 28 years’ of experience in the international
commercial property industry.
     Prior to joining the Manager, Mr. Stewardson was a property consultant from 2001 to 2005, during
which period he was involved in various projects in Hong Kong, Shanghai, Bangkok, Macau and Tokyo.
      Mr. Stewardson previously worked for Jones Lang Wootton and Jones Lang LaSalle from 1978 to
2000 in Asia and Europe. He was the managing director and international director of Jones Lang Wootton/
Jones Lang LaSalle, Bangkok, responsible for the operations of a full service property consultancy in
Thailand and Indochina from 1996 to 2000. He was one of the two directors of Jones Lang Wootton,
London, responsible for the development and implementation of the marketing plan for Canary Wharf,
London under a joint agency with CB Richard Ellis from 1994 to 1996. He was also responsible for the
commercial and industrial agency team across seven offices in Germany from 1990 to 1994. He was also the
director of Jones Lang Wootton, Hong Kong, responsible for the development marketing consultancy in
Asia from 1978 to 1990 and was involved in projects such as Harbour City Phase 1, Tsimshatsui, Kowloon
for The Wharf (Holdings) Limited and Exchange Square Phases 1 and 2, Central for Hongkong Land
Holdings Limited.

                                                   137
                                            THE MANAGER

     Mr. Stewardson is a Fellow of The Royal Institution of Chartered Surveyors.
      Mr. CHA Mou Sing, Payson, aged 63, was appointed director and the deputy chairman of the board
of directors of HKR International Limited in 1989 and in September 2001, respectively. He has served as a
director of a number of subsidiaries of HKR International Limited since its inception in 1977. He is also the
chairman and non-executive director of HKR International Limited’s associated corporation, Hanison
Construction Holdings Limited and an independent non-executive director of New World Development
Company Limited, both of which are listed on the Hong Kong Stock Exchange. Mr. Cha is also the
Chairman of The Mingly Corporation Limited.
      Mr. Cha has over 40 years’ experience in property development. He is a member of the National
Committee of the Chinese People’s Political Consultative Conference. He is also a director of LBJ Regents
Limited, CDW Holdings Limited and Novantenor Limited, all of which are substantial shareholders of HKR
International Limited. He is also a Justice of the Peace.
     Mr. Cha holds an honorary doctorate degree of Social Science from City University of Hong Kong.
     Professor K.C. Chan (CHAN Ka Keung, Ceajer), aged 49, was appointed Dean of Business and
Management at Hong Kong University of Science and Technology (‘‘HKUST’’) in July 2002. He joined
HKUST in 1993, after serving on the faculty of the Ohio State University in the United States. He is a non-
executive director of Shui On Constructions and Materials Limited.
    Professor Chan received his bachelor’s degree in economics from Wesleyan University and both his
M.B.A. and Ph.D. in Finance from the University of Chicago. He is listed in Who’s Who in Economics.
     Professor Chan is Chairman of the Consumer Council, and a member of the Commission on Strategic
Development, the Exchange Fund Advisory Committee, the Hang Seng Index Advisory Committee, and the
Hong Kong Council for Academic Accreditation. He is former President of the Asian Finance Association
and Member of the Maintenance Accreditation Committee of the Association to Advance Collegiate
Schools of Business (AACSB) International in the United States.
     Mr. ELDON, David Gordon, aged 60, joined the HSBC Group in 1968 and became chairman of
Hang Seng Bank Limited and The Hongkong and Shanghai Banking Corporation Limited in 1998 and
1999, respectively. After 37 years of service to the HSBC Group, he retired as chairman of Hang Seng Bank
Limited on April 21, 2005, retired as chairman of The Hongkong and Shanghai Banking Corporation
Limited on May 24, 2005 and also retired from the board of HSBC Holdings plc on May 27, 2005.
     Mr. Eldon is a director of the MTR Corporation Limited. He is the chairman of The Hong Kong
General Chamber of Commerce and the Hong Kong Ethics Development Advisory Committee of the
Independent Commission Against Corruption, and the honorary chairman and founding member of the
Seoul International Business Advisory Council. He is a member of the Hong Kong Trade Development
Council, Vice Patron of the Community Chest and International Council member of The Bretton Woods
Committee. He is also a Steward of the Hong Kong Jockey Club.
       Mr. Eldon became an Associate of the Chartered Institute of Bankers (ACIB) in 1972 and a Fellow of
the Institute (FCIB) in 1986. He was named the DHL/SCMP Hong Kong Business Person of the Year for
2003. In July 2004, he was awarded the Gold Bauhinia Star by the Government for his contribution to the
territory’s financial sector and his distinguished community services. He is also a Justice of the Peace.
    Mr. Eldon has been conferred an honorary doctorate of Business Administration by City University of
Hong Kong in November 2003, and was awarded the Commander of the British Empire in June 2005.
     Mr. SHEK Lai Him, Abraham, aged 60, is currently a member of the Legislative Council. He is also
a member of the managing board of Kowloon-Canton Railway Corporation, and a member of the Council of
The Hong Kong University of Science and Technology and the Court of The University of Hong Kong.

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                                            THE MANAGER

      Mr. Shek is also an independent non-executive director of Midas International Holdings Limited,
Paliburg Holdings Limited, Lifestyle International Holdings Limited, New World TMT Limited, NWS
Holdings Limited, Chuang’s Consortium International Limited, Titan Petrochemicals Group Limited and
See Corporation Limited, all of which are companies whose shares are listed on the Hong Kong Stock
Exchange. He is also a director of The Hong Kong Mortgage Corporation Limited. He was appointed as a
Justice of the Peace in 1995.
     Mr. Shek graduated from the University of Sydney with a Bachelor of Arts degree.

INDEPENDENCE OF DIRECTORS
      In assessing the independence of a non-executive Director, the Audit Committee will take into account
the following factors, none of which is necessarily conclusive. Independence is more likely to be questioned
if the Director:
     (a)   holds more than 1% of the total issued Units in Champion REIT (including Units 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). Any candidate for
           appointment who holds an interest of more than 1% must satisfy the Audit Committee, prior to
           the appointment, that he or she is independent. A candidate holding 5% or more would not
           normally be considered to be independent;
     (b)   has received an interest in the Units as a gift, or by means of other financial assistance, from
           Champion REIT or a connected person of Champion REIT (however, subject to the limit set out
           in (a) above). The director will still be considered independent if he/she receives Units from
           Champion REIT (but not from connected persons of Champion REIT) as part of his/her
           director’s fee or pursuant to option schemes;
     (c)   is a director, partner or principal of a professional advisor which currently provides or has
           within one year immediately prior to the date of his/her proposed appointment provided
           services, or is an employee of such professional advisor who is or has been involved in
           providing such services during the same period, to:
           (i) Champion REIT or any connected person of Champion REIT; or
           (ii) any person who was a chief executive or a director (other than an independent non-
                executive director) of the Manager within one year immediately prior to the date of the
                proposed appointment, or any of their associates;
     (d)   has a material interest in any principal business activity of, or is involved in any material
           business dealings with, Champion REIT or any connected person of Champion REIT;
     (e)   is on the board specifically to protect the interests of an entity whose interests are not the same
           as those of the Unitholders of Champion REIT as a whole;
     (f)   is or was connected with a director or the chief executive of the Manager, or a significant holder
           of Champion REIT, within two years immediately prior to the date of his/her proposed
           appointment;
     (g)   is, or has at any time during the two years immediately prior to the date of his/her proposed
           appointment been, an executive or director (other than an independent non-executive director) of
           the Manager or any other connected person of Champion REIT; and
     (h)   is financially dependent on Champion REIT or any connected person of Champion REIT.

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                                            THE MANAGER

     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 VIII to this Offering Circular).

ROLES OF THE EXECUTIVE OFFICERS OF THE MANAGER

      The Chief Executive Officer of the Manager is responsible for working with the Board to determine
the strategy for Champion REIT. The Chief Executive Officer will work with the other members of the
Manager’s management team to ensure that Champion REIT is operated in accordance with the Manager’s
stated investment strategy. Additionally, the Chief Executive Officer will be responsible for planning the
strategic development of Champion REIT.

      The Chief Executive Officer is also responsible for the day-to-day operations of the Manager and will
supervise the Manager’s management team to ensure that Champion REIT is operated in accordance with
the stated strategy, policies and regulations.

      The Chief Operating Officer is responsible for formulating the business plans of Champion REIT’s
properties with short, medium and long-term objectives, with a view to maximizing the rental income of
Champion REIT via active asset management. In particular, the Chief Operating Officer is responsible for
asset management functions for the Manager and will work closely with the Property Manager to implement
Champion REIT’s strategies so as to ensure that its properties maximize their income generation potential
and minimize their expense base without compromising the marketability of the rentable space.

      The Chief Investment Officer is responsible for identifying, researching and evaluating (a) potential
acquisitions or investments consistent with Champion REIT’s investment strategy with a view to enhancing
Champion REIT’s portfolio; or (b) divestments where a property is no longer strategic or fails to enhance
the value of Champion REIT’s portfolio or fails to be yield accretive. The Chief Investment Officer is also
responsible for investor relations and ensuring that Champion REIT makes regular disclosures and other
communications to Unitholders and the market, and for co-ordinating the promotion and marketing of
Champion REIT.

      The Finance and Office Administration Manager is primarily responsible for the financial
management of Champion REIT as well as general office administrative matters. The Finance and Office
Administration Manager’s responsibilities include reviewing financial statements, coordinating with
external auditors, managing tax affairs and overseeing the preparation of budgets.

      The Compliance Manager is primarily responsible for ensuring that, in managing the affairs of
Champion REIT, the Manager complies with the Trust Deed, the REIT Code, the Listing Rules, the rules
and regulations of the Hong Kong Stock Exchange (where applicable) the SFO and other applicable laws,
regulations and rules. The Compliance Manager is also responsible for ensuring that the Manager is kept
up-to-date with any changes in applicable rules and regulations that relate to compliance matters.

      The Internal Auditor is responsible for reviewing the accuracy and completeness of records of all
operations and transactions of Champion REIT and ensuring that the Manager’s internal control system
functions properly. He is also responsible for reviewing and making recommendations to the Board or the
Audit Committee, as the case may be, to ensure effective segregation of duties and operation functions of
the Manager, and ensure effectiveness and accuracy of the reporting of irregularities and infringements of
the Manager’s operational and compliance procedures.




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                                              THE MANAGER

EXECUTIVE OFFICERS OF THE MANAGER
    The following sets forth information on the working experience of the executive officers of the
Manager, who are full-time employees of the Manager:
      Mr. KWONG Chi Kwong, aged 46, is the Chief Operating Officer and a Responsible Officer of the
Manager. He is responsible for formulating the business plans of Champion REIT’s properties with short,
medium and long-term objectives, and with a view to maximizing the rental income of Champion REIT via
active asset management.
      Mr. Kwong has over 20 years’ experience in the industry. Prior to joining the Manager, he worked for
The Great Eagle Estate Agents Limited from 1985 to 2006 and was the Assistant General Manager from
2000 to 2006. As the Assistant General Manager, he held a variety of management and supervisory roles in
areas of leasing and sales of properties, formulation and implementation of marketing plans, market
research, site acquisitions, feasibility studies, liaison with government authorities and external professionals
and administration and human resource management. During his employment with The Great Eagle Estate
Agents Limited, Mr. Kwong has been involved in various major property developments and investment
projects, including (a) assisting in formulating investment/redevelopment strategies and investment
valuations in relation to the acquisition and redevelopment of Tregunter Tower by the Great Eagle Group;
(b) participating in project planning during the construction stage of Citibank Plaza and subsequently
advising on leasing strategies; and (c) participating in the project planning, development and acquisition of
Langham Place, including portfolio and lease management and advising on leasing strategies prior to its
demolition, and formulating marketing strategies during its redevelopment.
     Mr. Kwong holds a Bachelor of Arts degree from The University of Hong Kong.
      Mr. CHOO Chong Yao, Patrick, aged 40, is the Chief Investment Officer and a Responsible Officer
of the Manager. He is responsible for the strategic planning and the strategic management of Champion
REIT, and for communicating and liaising with Unitholders. He is also responsible for identifying and
evaluating potential acquisitions or investments consistent with Champion REIT’s investment strategy.
      Mr. Choo has over 15 years’ of asset management experience while licensed in Hong Kong and
Singapore. His portfolios consistently included investments in property companies and real estate-heavy
conglomerates listed throughout Asia and more recently, investments in real estate investment trusts in
Singapore, Hong Kong and North America. Prior to joining the Manager, from 2001 to 2005, he was the
Investment Director of Kingsway Fund Management Limited, where he directed an investment team
managing various public authorized funds. Mr. Choo has been involved in the launch and management of
unit trusts, Mandatory Provident Fund constituent funds and Approved Pooled Investment Funds, and is
well-acquainted with the operational and regulatory environment involving multi-investor trust structures
registered in Hong Kong.
     Mr. Choo graduated from the University of Pennsylvania with a Bachelor of Science degree.
    Ms. SUNG Kar Wai, Rosana, aged 32, is the Finance and Office Administration Manager of the
Manager. She is primarily responsible for the financial management and general office administration of
Champion REIT.
      Prior to joining the Manager, she worked for The Great Eagle Company, Limited from 1998 to 2006
and was the Senior Accountant from 2005. As the Senior Accountant, her duties include preparing monthly
consolidated accounts, profit forecast and cash flow forecast, performing financial reporting duties and
coordinating with overseas subsidiaries to ensure their compliance with Hong Kong’s requirements. She
also previously worked for Deloitte Touche Tohmatsu Certified Public Accountants from 1996 to 1998 as a
staff accountant where she was involved in carrying out statutory audits and preparing auditors’ reports.
     Ms. Sung holds a Master of Professional Accounting degree from The Hong Kong Polytechnic
University and a Bachelor of Business Administration degree with major in Accountancy from The Chinese

                                                      141
                                             THE MANAGER

University of Hong Kong. She is also an associate member of Hong Kong Institute of Certified Public
Accountants and a Fellow of the Association of Chartered Certified Accountants.
      Mr. AU Tat Wah, Steve, aged 42, is the Compliance Manager of the Manager. He is primarily
responsible for ensuring that the Manager complies with the Trust Deed, the REIT Code, the Listing Rules,
the rules and regulations of the Hong Kong Stock Exchange, where applicable, the SFO, and other
applicable laws, regulations and rules.
      Prior to joining the Manager, Mr. Au was at The Great Eagle Company, Limited from 1990 to 2006,
where he was the Assistant Company Secretary, responsible for assisting the company secretary in relation
to all company secretarial matters of the Great Eagle Group.
     Mr. Au has a Master’s degree in Business Administration from the University of Hull and is an
associate member of both the Institute of Chartered Secretaries and Administrators in the United Kingdom
and The Hong Kong Institute of Chartered Secretaries.
     Mr. LEE Kim Man, Julian, aged 32, is the Internal Auditor of the Manager. He is responsible for
reviewing the accuracy and completeness of records of all operations and transactions of Champion REIT
and ensuring the Manager’s internal control system functions properly.
     Prior to joining the Manager, Mr. Lee was the Senior Internal Auditor of The Great Eagle Company,
Limited from 2004 to 2006 and was responsible for reviewing the internal control and accounting
procedures, performing compliance tests, and developing and preparing the audit plan. Mr. Lee has nearly
10 years of experience in the field of accounting and auditing. Before joining the Great Eagle Group,
Mr. Lee was an Internal Auditor of Sun Hung Kai Properties Limited and Auditor of reputable Certified
Public Accountants firms.
     Mr. Lee holds a Masters of Science degree in Information Systems from The Hong Kong Polytechnic
University and a Bachelors of Arts (honors) degree in Accounting and Finance from the University of the
West of England, United Kingdom. Mr. Lee is an associate member of Hong Kong Institute of Certified
Public Accountants.

FEES, COSTS AND EXPENSES OF THE MANAGER                                                                           B14(b) 9.10

     The Manager is entitled to a Manager’s Fee, acquisition fee and divestment fee as described below:

Manager’s Fee
      In respect of the first financial year of Champion REIT, provided that the net property income of
Champion REIT for the first financial year shall be equal to or more than HK$270 million, the Manager
shall be entitled to be paid out of the Deposited Property a Manager’s Fee of 12% of the net property
income of Champion REIT for that financial year as shown in the audited annual accounts of Champion
REIT. Such Manager’s Fee, if any, shall accrue and be calculated as at December 31, 2006 and be payable
in arrears within 15 days after the publication of the audited annual accounts of Champion REIT for its first
financial year.
       In respect of the first semi-annual period of each financial year of Champion REIT (other than the first
financial year), provided that the net property income of Champion REIT for that semi-annual period as
shown in its published semi-annual financial statements is equal to or more than HK$200 million, the
Manager shall be entitled to be paid out of the Deposited Property a Manager’s Fee of 12% of the net
property income of Champion REIT for that semi-annual period as shown in its published semi-annual
financial statements for that semi-annual period. Such Manager’s Fee, if any, shall accrue and be calculated
as at the last day of that semi-annual period and be payable in arrears within 15 days after the publication of
relevant semi-annual financial statements.

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                                             THE MANAGER

       In respect of the second semi-annual period of each financial year of Champion REIT (other than the
first financial year), provided that the net property income of Champion REIT for that semi-annual period is
equal to or more than HK$200 million, the Manager shall be entitled to be paid out of the Deposited
Property a Manager’s Fee of 12% of the net property income for that semi-annual period. Such Manager’s
Fee, if any, shall accrue on and be calculated as at the last day of that financial year and be payable in
arrears within 15 days after the publication of the audited annual accounts of Champion REIT for that
financial year. For this purpose, the net property income of Champion REIT for the second semi-annual
period of a financial year shall be deemed to be equal to the difference between:
     (a)       the net property income of Champion REIT for the whole of that financial year as shown in
               its audited annual accounts for that financial year; and
     (b)       the net property income of Champion REIT for the first semi-annual period of that financial
               year as shown in its published semi-annual financial statements or, if such amount has been
               adjusted at the recommendation of the Auditors, the adjusted net property income for such
               semi-annual period of that financial year.
      Accordingly, if the net property income for any period is below the applicable threshold, the Manager
will not receive any Manager’s Fee for such period. If the net property income for any period is equal to or
more than the applicable threshold, the Manager will be entitled to receive the Manager’s Fee, calculated
based on 12% of the entirety of the net property income achieved.
       Upon the publication of the audited annual accounts of Champion REIT for any financial year (other
than the first financial year), if the Auditors were to recommend any adjustment to the net property income
for the first semi-annual period of that financial year as shown in the published semi-annual financial
statements of Champion REIT for that financial year, then the Manager’s Fee paid to the Manager for that
first semi-annual period shall be adjusted accordingly.
     Any increase in the Manager’s Fee above the rate mentioned in the preceding paragraphs or any
change in the structure of the Manager’s Fee must be approved by a Special Resolution of Unitholders.
      For an initial period from the Listing Date until December 31, 2010, the Manager’s Fee referable only
to the Property will be paid to the Manager in the form of Units. After December 2010, the Manager’s Fee
referable only to the Property will be paid to the Manager in the form of cash and/or Units, as the Manager
may elect. The Manager’s Fee referable to real estate other than the Property will be paid to the Manager in
the form of cash and/or Units, as the Manager may elect.
      The Manager will make the elections for the payment of the Manager’s Fee in cash and/or Units and,
if applicable, the respective percentages of the Manager’s Fee to be paid in cash and/or in Units annually on
or before January 15 of each year by way of notice in writing to the Trustee and a public announcement to
the Unitholders, such election to be irrevocable during the year in which it was made. In the event that the
Manager fails to make such an election in any year, the most recent valid election made by the Manager in a
prior year, if any, will apply and, if there is no such prior year election by the Manager, the Manager’s Fee
will be paid in cash.
      When paid in the form of Units, the Manager will be entitled to receive such number of Units as may
be purchased for the relevant amount of the Manager’s Fee at the prevailing Market Price at the time of the
issue of such Units. The maximum number of Units that may be issued to the Manager in a financial year
(including the period from the Listing Date until December 31, 2006) as payment of the Manager’s Fee will
be limited to such number of Units as represents 3.0% of the number of Units outstanding as of the last day
of the immediately preceding financial year plus the number of Units, if any, issued in that financial year for
the purposes of financing any acquisition of real estate. In the event payment is to be made in the form of
Units and the relevant thresholds for the issuance of Units without Unitholders’ approval, including the
threshold of 20% (or such other percentage as permitted by the REIT Code), are exceeded, then payment of
that excess part of the Manager’s Fee will be paid to the Manager in the form of cash.

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                                             THE MANAGER

     ‘‘Market Price’’ means the price as determined by the Manager as being the average closing price for
a Unit on the Hong Kong Stock Exchange for the period of 10 Business Days (as defined in the Trust Deed)
immediately preceding the relevant Business Day.

Acquisition Fee and Divestment Fee
     The Manager is also entitled to receive the following fees:
     (a)   Acquisition Fee
           An acquisition fee not exceeding the rate of 1.0% of the acquisition price for any real estate         9.10
           acquired directly or indirectly by Champion REIT (pro rated, if applicable, to the proportion of
           Champion REIT’s interest in the real estate acquired). The acquisition fee is payable as soon as
           practicable after completion of the acquisition. However, no acquisition fee is payable in relation
           to Champion REIT’s acquisition of the Holding Company Shares.
           The Manager will give Unitholders at least one month’s prior written notice of any increase in         B14(c)
           the rate of the acquisition fee that the Manager proposes to charge from time to time up to (but
           not exceeding) the permitted limit mentioned in the preceding paragraph. Any increase in the
           acquisition fee above the permitted limit mentioned in the preceding paragraph or any change in
           the structure of the acquisition fee must be approved by a Special Resolution of Unitholders.
           The acquisition fee will be paid to the Manager in the form of cash or, at the election of the
           Manager and with the prior approval of Unitholders by an Ordinary Resolution, entirely in the
           form of Units or partly in cash and partly in the form of Units.
           When paid in the form of Units, the Manager will be entitled to receive such number of Units as
           may be purchased for the relevant amount of the acquisition fee at the same issue price of Units
           used to finance or part finance the acquisition in respect of which the acquisition fee is payable
           or, where Units are not issued to finance or part finance such acquisition, at the issue price as
           determined by the Manager as being equal to the highest of the average closing price for a Unit
           on the Hong Kong Stock Exchange for the period of 10 trading days immediately prior to each
           of the following events: (i) the entry into of the agreement for the acquisition of the real estate,
           (ii) the announcement in respect of the acquisition of the real estate and (iii) the completion of
           the acquisition of the real estate.
     (b)   Divestment Fee
           A divestment fee not exceeding the rate of 0.5% of the sale price of any real estate sold or           9.10
           divested directly or indirectly by Champion REIT (pro rated, if applicable, to the proportion of
           Champion REIT’s interest in the real estate sold). The divestment fee is payable as soon as
           practicable after completion of the divestment.
           The Manager will give Unitholders at least one month’s prior written notice of any increase in         B14(c)
           the rate of the divestment fee that the Manager proposes to charge from time to time up to (but
           not exceeding) the permitted limit mentioned in the preceding paragraph. Any increase in the
           divestment fee above the permitted limit mentioned in the preceding paragraph or any change in
           the structure of the divestment fee must be approved by a Special Resolution of Unitholders. The
           divestment fee will be paid to the Manager in the form of cash or, at the election of the Manager
           and with the prior approval of Unitholders by an Ordinary Resolution, entirely in the form of
           Units or partly in cash and partly in the form of Units.
           When paid in the form of Units, the Manager will be entitled to receive such number of Units as
           may be purchased at the issue price as determined by the Manager as being equal to the highest
           of the average closing price for a Unit on the Hong Kong Stock Exchange for the period of 10
           trading days immediately prior to each of the following events: (i) the entry into of the

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                                            THE MANAGER

           agreement for the disposal of the real estate, (ii) the announcement in respect of the disposal of
           the real estate and (iii) the completion of the disposal of the real estate.
      Any payment to third party agents or brokers in connection with the acquisition or divestment of any
real estate for Champion REIT will be paid by the Manager to such persons out of the acquisition fee or the
divestment fee received by the Manager, and not additionally by Champion REIT or out of the assets of the
relevant property company.
      The Trustee, acting in consultation with the Manager, may rely on the recommendation of tax advisors
and authorize the payment of any acquisition fee or divestment fee, either at the level of Champion REIT or
at the level of the relevant property company.

RETIREMENT OR REMOVAL OF THE MANAGER
     The Manager shall have the power to retire, by 60 days’ written notice to the Trustee, in favor of a
corporation approved by the Trustee, the SFC and the Hong Kong Stock Exchange.
     Also, the Manager may be removed by prior notice given in writing by the Trustee if:
     (    the Manager goes into liquidation (except a voluntary liquidation for the purpose of
          reconstruction or amalgamation upon terms previously approved in writing by the Trustee) or if a
          receiver is appointed over any of its assets or a judicial manager is appointed in respect of the
          Manager (or any analogous process occurs or any analogous person is appointed in respect of the
          Manager);
     (    the Manager ceases to carry on business;
     (    the Manager fails or neglects, after no less than 30 days’ written notice from the Trustee, to carry
          out or satisfy any material obligation imposed on the Manager by the Trust Deed;
     (    Unitholders representing at least 75% in value of the Units issued and outstanding (excluding
          those held or deemed to be held by the Manager and the Unitholders who have interest in
          retaining the Manager) deliver to the Trustee a written request, or a Special Resolution is passed,
          to dismiss the Manager;
     (    for good and sufficient reason, the Trustee is of the opinion, and so states in writing such reason
          and opinion, that a change of the Manager is desirable in the interests of the Unitholders; or
     (    the SFC withdraws its approval of the Manager to act as the manager of Champion REIT.
      If the Manager is removed by the Trustee under the events mentioned above, the Trustee shall (with,
for so long as Champion REIT is authorized by the SFC, the prior written consent of the SFC) appoint
another corporation to be the new manager of Champion REIT.
      If the Manager’s removal is effected at the written request of the Unitholders as described above, the
Manager will have the right to deliver to the Trustee, within 14 days of the date of its removal, a written
representation addressed to the Unitholders (the ‘‘Manager’s Letter of Representation’’) concerning its
removal. The Trustee shall, at the cost and expense of Champion REIT, send or procure the sending of a
copy of the Manager’s Letter of Representation to each Unitholder.
      In the event that a general meeting of the Unitholders is convened for the purpose of considering the
removal of the Manager, the Manager may, at the costs and expenses of Champion REIT, issue a Manager’s
Letter of Representation to each Unitholder prior to the general meeting, and to table a copy of the
Manager’s Letter of Representation at the general meeting.
     Notwithstanding the foregoing, the Trustee has the right to terminate Champion REIT if for any
reason, there is no Manager under Champion REIT for a period of more than 60 days or such other longer

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                                            THE MANAGER

period as the Trustee considers appropriate. See the section headed ‘‘The Trust Deed — Termination of
Champion REIT’’ in this Offering Circular for details in respect of the termination of Champion REIT.

EXCLUSION OF LIABILITY
      In the absence of fraud, negligence, wilful default, breach of the Trust Deed or other constitutive
documents or breach of the REIT Code or any applicable laws or regulations by the Manager, it shall not
incur any liability by reason of any error of judgement or any matter or thing done or suffered or omitted to
be done by it in good faith under the Trust Deed. In addition, the Manager shall be entitled, for the purpose
of indemnity against any actions, costs, claims, damages, expenses or demands to which it may be put as
Manager, to have recourse to the assets of Champion REIT or any part thereof, save where such action, cost,
claim, damage, expense or demand is occasioned by the fraud, negligence, wilful default, breach of the
Trust Deed or other constitutive documents, the REIT Code or any applicable laws and regulations by the
Manager and any director, employee, servant, agent or delegate of the Manager.
      The Manager may, in managing Champion REIT and in carrying out and performing its duties and
obligations under the Trust Deed, to the extent permitted by applicable regulatory requirements, delegate to
any person as it thinks fit, or appoint any agent to carry out, specific aspects (but not the whole) of the
management and the administration of the assets of Champion REIT and any of the rights, trusts and
discretions granted to the Manager under the Trust Deed as it thinks fit to exercise any or all of its powers
and discretions and to perform all or any of its obligations under the Trust Deed, provided always that the
Manager shall be fully liable for all acts and omissions of such persons as if such acts and omissions had
been performed by the Manager itself.




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                                     THE PROPERTY MANAGER


THE PROPERTY MANAGER OF CHAMPION REIT                                                                           B4(c)

    The Property Manager, Eagle Property Management (CP) Limited, was incorporated in Hong Kong on
March 7, 2006 and is a wholly-owned subsidiary of Great Eagle.

      The Property Manager will manage, supervise, maintain and market the properties of Champion REIT
located in Hong Kong subject to the overall management and supervision of the Manager, upon the terms
and conditions set out in the Property Management Agreement entered into between the Manager and the
Property Manager.

      Pursuant to the Property Management Agreement, the Property Manager will provide the following
services for properties of Champion REIT located in Hong Kong on an exclusive basis, subject to the overall
management and supervision of the Manager:

     (    Property management services. These services include co-ordinating tenants’ fitting out
          requirements, recommending third party contracts for the provision of property management
          services, maintenance services, supervising the performance of service providers and contractors,
          arranging for adequate insurance and ensuring compliance with building and safety regulations.

     (    Lease management services. These services include the administration of rental collection,
          management of rental arrears, initiating lease renewals and negotiations of terms with tenants to
          conclude the renewal.

     (    Marketing services. These services include the provision of marketing and marketing co-
          ordination services.

      The Property Manager will have a team of full-time operational staff exclusively dedicated to
providing property management services to Champion REIT. Under the Property Management Agreement,
the Property Manager must at all times ensure that it will provide adequate resources at both the managerial
and operational levels for the property management of Champion REIT. See the section headed ‘‘Material
Agreements and Other Documents Relating to Champion REIT — Property Management Agreement’’ in
this Offering Circular for further details. The Property Manager has an office location that is separate from
the other Great Eagle entities that perform leasing and marketing functions in respect of other properties
held by Great Eagle. To ensure that there is segregation of information between the Property Manager and
other Great Eagle entities, the Property Manager has its own database with access and security codes
different from those of Great Eagle.




                                                    147
                                               THE PROPERTY MANAGER

MANAGEMENT REPORTING STRUCTURE OF THE PROPERTY MANAGER

        The following diagram sets forth the organizational and reporting structure of the Property Manager.

                                                           Board of Directors




                                                      Director and General Manager
                                                        LEE Ching Ming, Adrian




                                                           General Manager(1)
                                                          LAM Yuk Lin, Violin




                            Marketing Manager(1)      Assistant Marketing Manager(1)   Senior Marketing Manager(1)
                             NG Yuk Hing, Rita            CHAN Kei Kin, Ken              LEUNG Wai-Mun, Vivian




Note:
(1)     Full-time employees servicing the Property on an exclusive basis.


EXECUTIVE OFFICERS OF THE PROPERTY MANAGER

     The following sets forth information on the working experience of the executive officers of the
Property Manager:

      Mr. LEE Ching Ming, Adrian, aged 54, is the Director and General Manager of the Property
Manager. As the Director and General Manager of the Property Manager, Mr. Lee’s role is of a supervisory
and managerial nature at a senior level, and he has the overall responsibility for the formulation,
development and implementation of the business strategies in relation to the Property Manager’s leasing
activities. He is also an Assistant Director of Great Eagle responsible for finance, investment and corporate
communications, and a Director and the General Manager of The Great Eagle Estate Agents Limited
responsible for marketing, leasing and sales of the properties of the Great Eagle Group. Mr. Lee has worked
for the Great Eagle Group since 1994. Mr. Lee has over 32 years’ of experience in the banking and property
industry. He is a non-executive director of Recruit Holdings Limited. Mr. Lee holds a Bachelor of Social
Sciences degree from The University of Hong Kong.

      Ms. LAM Yuk Lin, Violin, aged 39, is a General Manager of the Property Manager. Prior to joining
the Property Manager, she worked for the Great Eagle Group from 1994 to 2006 and has been involved in
the leasing and marketing of Great Eagle’s interests in Citibank Plaza since 1999 and in development and
implementation of the business and leasing strategies of Great Eagle’s interests in Citibank Plaza from the
beginning of 2006. Ms. Lam holds a Bachelors degree in Communications from the University of Hawaii.

      Ms. LEUNG Wai-Mun, Vivian, aged 41, is the Senior Marketing Manager of the Property Manager.
Ms. Leung is responsible for advertising, marketing, promotion and public relations activities of the
Property Manager. She has over 17 years’ experience in the advertising and marketing industry. Prior to
joining the Property Manager in February 2006, she worked for various advertising agencies and held senior
marketing and business development positions with a number of publishing and marketing companies.
Ms. Leung holds a Bachelor of Arts degree from York University in Canada.

                                                                 148
                                     THE PROPERTY MANAGER

      Ms. NG Yuk Hing, Rita, aged 43, is the Marketing Manager of the Property Manager. Prior to
joining the Property Manager, she worked for The Great Eagle Estate Agents Limited from 1993 where her
last held position was Marketing Manager, responsible for the leasing of office and retail space and tenant
management of Great Eagle’s properties in Citibank Plaza and the preparation of analysis and reports in
relation to tenancies. Ms. Ng has over 12 years of experience in the property leasing management field.
Prior to working for the Great Eagle Group, she worked for approximately six years at New World Centre
Management Office Limited and approximately three years at the Sino Group.
      Mr. CHAN Kei Kin, Ken, aged 31, is the Assistant Marketing Manager of the Property Manager and
is responsible for the leasing of office and retail spaces for Great Eagle’s interests in Citibank Plaza.
Mr. Chan has about nine years of experience in the real estate industry in Hong Kong. Prior to joining the
Property Manager, he was with the Great Eagle Group from May 2005. Prior to that, he was the Senior
Marketing Officer and Marketing Officer of Hutchison Whampoa Properties Limited from 2001 to 2005.
Mr. Chan previously worked for Savills (Hong Kong) Limited as a valuer and assistant valuer between 1996
and 2001. Mr. Chan holds a Master of Science degree in Finance from The Chinese University of Hong
Kong and a Bachelor of Science degree in Surveying from The University of Hong Kong. He is also a
member of the Hong Kong Institute of Surveyors and the Royal Institute of Chartered Surveyors and is a
Registered Professional Surveyor (General Practice).

FEES OF THE PROPERTY MANAGER                                                                                    B14(b)

      Under the Property Management Agreement (which has been ratified and acceded to by each New
Property Company), the Property Manager will be entitled to receive from each New Property Company the
following fees in relation to the management, supervision, maintenance and marketing of the relevant
portion of the Property owned by that New Property Company.
     (a)    Property and Lease Management Services
    For property and lease management services, each New Property Company will pay the Property
Manager a fee of 3.0% per annum of the Gross Property Revenue of the relevant portion of the Property
owned by the relevant New Property Company.
     (b)    Marketing Services
      For marketing services which will be provided by the Property Manager, each New Property Company
will pay the Property Manager the following commissions:
     (     a commission equivalent to one month’s base rent, for securing a tenancy of three years or more;
     (     a commission equivalent to one-half month’s base rent, for securing a tenancy of less than three
           years;
     (     a commission equivalent to one-half month’s base rent, for securing a renewal of tenancy
           irrespective of the duration of the renewal term; and
     (     a commission equivalent to 10.0% of the total licence fee for securing a licence for a duration of
           less than 12 months.
      If the tenancy, renewal of tenancy or licence is secured by a third party agent, the Property Manager
will not be entitled to receive any of the above commissions. The New Property Companies can use the
services of either the Property Manager or third party leasing agents.
     In addition to its fees, the Property Manager will be fully reimbursed by the relevant Property
Company for the employment costs and remuneration relating to the employees of the Property Manager
engaged solely and exclusively for the operation of the parking facilities of the Property.

                                                    149
                                          THE DMC MANAGER

      In Hong Kong, the relationship between the co-owners of a property is governed by a document called
a deed of mutual covenant (or an instrument of a similar nature), which is an agreement between the co-
owners to regulate their respective rights and obligations as co-owners of the land and building(s) and to
provide for the building’s effective maintenance and management. The DMC for Citibank Plaza provides
for Longworth Management Limited to be the DMC Manager unless it resigns or is removed by a resolution
of owners holding not less than 75% of the undivided shares in Citibank Plaza, in each case with three
months’ notice.

      Longworth Management Limited was incorporated in Hong Kong on August 13, 1991 and is a
wholly-owned subsidiary of Great Eagle. It has a paid-up capital of HK$10,000 and its registered office is
located at 33/F, Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong. It has been the DMC Manager
for Citibank Plaza since its completion in 1992.

      The DMC Manager has a general power of management in relation to Citibank Plaza in accordance
with the provisions of the DMC. Its scope of responsibilities under the DMC include the following:
     (    management, maintenance, repair and upkeep of common areas, common facilities, public
          structures (including a vehicular tunnel, certain footbridges, stairways and escalators which, by
          virtue of the Government Grant, have to be maintained by the owners of Citibank Plaza for use
          by members of the public), the structure and fabric of the buildings, curtain walls, foundations,
          roofs, lifts, escalators, fire service installations, security systems and other plant and equipment in
          the buildings;
     (    operation and maintenance of the building services systems (including the air-conditioning
          system, electrical and mechanical systems, plumbing and drainage system, building management
          system and fire services system) and providing supply of central air-conditioning to the office and
          retail areas; and
     (    maintenance of building security.

      The DMC Manager is also empowered to do all things which it in its discretion deems necessary or
desirable for the purposes of maintaining and improving all facilities and services in or on Citibank Plaza or
the lot on which Citibank Plaza is erected for the better enjoyment or use of Citibank Plaza by the owners
and their respective agents, tenants and licensees.

     Pursuant to the DMC, the DMC Manager is permitted to appoint a sub-manager, and has appointed The
Great Eagle Properties Management Company, Limited, another wholly-owned subsidiary of Great Eagle, as
the DMC Sub-manager to assume and perform the obligations of the DMC Manager under the DMC. The
DMC Manager and the DMC Sub-manager also manage certain other properties of the Great Eagle Group.

      Each New Property Company, as an owner of a portion of Citibank Plaza, is obliged to pay building
management fees to the DMC Manager pursuant to the DMC. In aggregate, the New Property Companies
hold 91.6% of the management shares for Citibank Plaza and are obliged to pay such portion of the
aggregate building management fees payable by all owners of Citibank Plaza under the DMC. For leased
areas, building management fees are billed and recovered from tenants based on the amount payable under
the DMC without any mark-up. For vacant space, building management fees will be borne by the New
Property Companies but with a partial rebate if a certain minimum portion of a floor is vacant and no air-
conditioning is used. The building management fee for the year ended September 30, 2003 and the three
months ended December 31, 2003 was HK$6.07 per management share (equivalent to HK$6.07 per sq. ft.
of Gross Rentable Area for office space and HK$9.105 per sq. ft. of Gross Rentable Area for retail space).
The building management fee for the period from January 1, 2004 to and including the year ending
September 30, 2006 was /is HK$5.87 per management share (equivalent to HK$5.87 per sq. ft. of Gross
Rentable Area for office space and HK$8.805 per sq. ft. of Gross Rentable Area for retail space). The
building management fee is reviewed annually.

                                                     150
                                                     THE DMC MANAGER

      The single largest component of management expenses is electricity. The other significant items are
the costs of annual maintenance contracts for building services installations and repairs and maintenance. In
addition, under the DMC, the DMC Manager is entitled to remuneration at the rate of 12% of the budgeted
management expenses (excluding the Manager’s remuneration).
      The Manager has reviewed the historical accounts of the DMC Manager and believes that the DMC
Manager will continue to derive sufficient revenue to cover the ongoing expenditure associated with
Citibank Plaza and to ensure that the building will continue to be maintained at a high standard.
      In addition, having regard to the reserves and sinking fund balance of the DMC Manager and the letter
from the Building Surveyor set out in Appendix VII to this Offering Circular which concluded that no extra
provision for capital expenditure is expected to be required for the Property in the next five years, the
Manager believes that no further contribution from the owners will be required in the next five years.

MANAGEMENT REPORTING STRUCTURE OF THE DMC SUB-MANAGER
        The following diagram sets forth the organizational and reporting structure of the DMC Sub-manager.
                                                             Board of Directors




                                                         Director & General Manager
                                                           LEUNG Tat Kai, Henry




                                                         Assistant General Manager(1)
                                                           NGAN Kin Wah, Daniel




                                                           Chief Estate Manager(1)
                                                         FUNG Mok Lai Shim, Billian




                               Building Management                                      Estate Management Team(1)
                            System & Technical Team(1)




Note:
(1)     Full-time employees servicing Citibank Plaza on an exclusive basis.

EXECUTIVE OFFICERS OF THE DMC SUB-MANAGER
     The following sets forth information on the working experience of the executive officers of the DMC
Sub-manager:
     Mr. LEUNG Tat Kai, Henry, aged 52, is the Director and the General Manager of the DMC Sub-
manager responsible for the management of the property portfolio of the Great Eagle Group. Prior to joining
the DMC Sub-manager in 2002, he was the Senior Manager of International Finance Centre Management
Company Limited from 1997 to 2002 and of Harriman Realty Co., Ltd from 1994 to 1997. Mr. Leung holds
an Bachelors (honors) degree in Law from the University of London, a higher diploma in Company
Secretaryship and Administration and a higher diploma in Surveying from The Hong Kong Polytechnic
University. He is also a member of the Hong Kong Institute of Real Estate Administration and an associate
member of the Institute of Chartered Secretaries and Administrators.

                                                                    151
                                       THE DMC MANAGER

      Mr. NGAN Kin Wah, Daniel, aged 47, is the Assistant General Manager of the DMC Sub-manager.
Mr. Ngan has more than 20 years of experience in the property management industry. Prior to joining the
DMC Sub-manager in 2004, he worked for Hongkong Land (Property Management) Limited from 1981 to
2004. Mr. Ngan holds a Masters degree in Science from the University of Greenwich, a Bachelors degree in
Commerce from Curtin University of Technology, a diploma in Management Studies jointly organized by
the Hong Kong Management Association and The Hong Kong Polytechnic University and a certificate in
Mechanical Engineering from the Morrison Hill Technical Institute. He is also a member of the Hong Kong
Institute of Real Estate Administration, a member of the Chartered Management Institute, a member of the
American Society of Heating, Refrigerating and Air-conditioning Engineers Incorporation and a member of
International Facility Management Association.
     Mrs. FUNG MOK Lai Shim, Billian, aged 54, is the Chief Estate Manager of the DMC Sub-
manager, which she joined in 1993. Ms. Fung holds a certificate from the Ontario Mortgage Brokers
Association and a certificate in Housing Management. She is also a member of the Chartered Institute of
Housing (United Kingdom).




                                                  152
          OVERVIEW OF GREAT EAGLE HOLDINGS LIMITED, KERRY PROPERTIES
                  LIMITED AND WING TAI CORPORATION LIMITED

      After the completion of the Global Offering, Great Eagle, Kerry Properties and Wing Tai will hold
approximately 49.2%, 4.2% and 1.6%, respectively, (43.2%, 3.7% and 1.4%, respectively, if the Over-
allotment Option is exercised in full) of the outstanding Units.

OVERVIEW OF GREAT EAGLE
     Great Eagle, which is headquartered in Hong Kong, is engaged principally in property development,
management and investment in the office, retail and hotel sectors in Hong Kong. It also invests in office
properties in the United States, and invests in and manages hotels in North America, Europe, Australia and
New Zealand.
       Its office/retail properties in Hong Kong comprise (a) a 1.8 million sq. ft. office, retail and hotel
complex known as Langham Place in the prime shopping district of Mongkok, Kowloon that includes
550,168 sq. ft. of gross rentable area of Grade A office space and 302,187 sq. ft. of gross rentable area of
retail space; (b) Great Eagle Centre in Wanchai, Hong Kong, which has 162,508 sq. ft. of gross rentable area
of Grade A office space and 37,144 sq. ft. of gross rentable area of retail space; and (c) 4,882 sq. ft. of gross
rentable area of retail space in Eaton Hotel Banquet and Conference Centre. In aggregate, it owns
712,676 sq. ft. of gross rentable area of Grade A office space and 344,213 sq. ft. of gross rentable retail
space in Hong Kong. In the United States, it owns four office buildings with a total floor area of over
700,000 sq. ft. Its hotel portfolio currently comprises eight properties with over 4,700 rooms, including six
luxury hotels branded under the Langham name in Hong Kong, London, Boston, Melbourne and Auckland,
the Eaton Hotel in Hong Kong and the Delta Chelsea Hotel in Toronto. Its wholly-owned subsidiary
manages all the hotels with the exception of the Toronto property. Great Eagle is also active in property
management and maintenance services as well as building materials trading.
    Great Eagle was founded in 1963 as The Great Eagle Company, Limited, which was listed on the
Hong Kong Stock Exchange in 1972. In 1990, Great Eagle Holdings Limited, a company incorporated in
Bermuda, became the listed company and holding company of the Great Eagle Group.
        The market capitalization of Great Eagle was approximately HK$12.9 billion as of December 31,
2005.
      The following selected financial information has been extracted from Great Eagle’s audited financial
statements for the year ended December 31, 2005:

CONSOLIDATED INCOME STATEMENT (HK$’000)
                                                                                                    Year Ended
                                                                                                   December 31,
                                                                                                       2005

Turnover *******************************************************************                         3,521,201
Profit attributable to shareholders ***********************************************                 10,028,139




                                                      153
        OVERVIEW OF GREAT EAGLE HOLDINGS LIMITED, KERRY PROPERTIES
                LIMITED AND WING TAI CORPORATION LIMITED

CONSOLIDATED BALANCE SHEET (HK$’000)
                                                                                          As at
                                                                                       December 31,
                                                                                           2005

Non-current assets
  Property, plant and equipment **********************************************          7,302,912
  Prepaid lease payments ****************************************************           1,840,726
  Investment properties ******************************************************         37,049,745
  Interests in associates *****************************************************            18,760
  Available for sale investments***********************************************            16,432
  Loan receivables**********************************************************              278,344
  Pledged bank deposits *****************************************************             489,346
                                                                                       46,996,265
Current assets
  Inventories **************************************************************               75,309
  Debtors, deposits and prepayments*******************************************            407,991
  Prepaid lease payments ****************************************************              44,771
  Bank balances and cash****************************************************              719,351
                                                                                        1,247,422
  Non-current assets classified as held for sale **********************************       253,800
                                                                                        1,501,222
Current liabilities
  Creditors, deposits and accruals *********************************************        1,532,173
  Derivative financial instruments *********************************************           44,356
  Provision for taxation *****************************************************             92,760
  Borrowings due within one year*********************************************           1,390,620
  Unsecured bank overdraft **************************************************               3,967
                                                                                        3,063,876
Net current liabilities ********************************************************       (1,562,654)
Total assets less current liabilities**********************************************    45,433,611
Non-current liabilities
  Borrowings due after one year **********************************************         14,526,388
  Deferred taxation *********************************************************           4,653,230
                                                                                       19,179,618
NET ASSETS *************************************************************               26,253,993
Equity
  Share capital*************************************************************              297,401
  Share premium and reserves ************************************************          24,041,690
Equity attributable to equity holders of the parent ********************************   24,339,091
Minority interests ***********************************************************          1,914,902
TOTAL EQUITY **********************************************************                26,253,993

     For further details, please refer to Great Eagle’s 2005 results announcement.




                                                  154
        OVERVIEW OF GREAT EAGLE HOLDINGS LIMITED, KERRY PROPERTIES
                LIMITED AND WING TAI CORPORATION LIMITED

OVERVIEW OF KERRY PROPERTIES

      Kerry Properties is principally engaged in (a) property development and investment in Hong Kong, the
PRC and the Asia-Pacific region; (b) logistics, freight, warehouse ownership and operations;
(c) infrastructure-related investment in Hong Kong and the PRC; and (d) hotel ownership in the PRC. Kerry
Properties is listed on the Hong Kong Stock Exchange and its market capitalization was approximately
HK$25.0 billion as of December 31, 2005.

      The following selected financial information has been extracted from Kerry Properties’ audited
financial statements for the year ended December 31, 2005:

CONSOLIDATED INCOME STATEMENT (HK$’000)
                                                                                              Year ended
                                                                                             December 31,
                                                                                                 2005

Turnover ******************************************************************                   8,008,824
Profit attributable to shareholders **********************************************            3,066,863

CONSOLIDATED BALANCE SHEET (HK$’000)
                                                                                                As at
                                                                                             December 31,
                                                                                                 2005

Non-current assets **********************************************************                 38,940,228
Current assets **************************************************************                  6,290,471
Current liabilities ***********************************************************                3,629,776
Net current assets***********************************************************                  2,660,695
Total assets less current liabilities**********************************************           41,600,923
Non-current liabilities *******************************************************               14,703,048
                                                                                              26,897,875
Equity attributable to the shareholders:
Share capital***************************************************************                   1,216,579
Share premium *************************************************************                    3,918,838
Other reserves *************************************************************                   9,699,847
Retained profits ************************************************************                  9,777,277
Proposed final dividend ******************************************************                   608,289
                                                                                              25,220,830
Minority interests ***********************************************************                 1,677,045
Total equity ***************************************************************                  26,897,875

     For further details please refer to Kerry Properties’ 2005 Annual Report.

OVERVIEW OF WING TAI

      Wing Tai was incorporated in Hong Kong on February 23, 1967 and has a paid-up share capital of
HK$16.5 million. Wing Tai is principally engaged in (a) property and other investments holdings; and
(b) the provision of management services.

                                                   155
                                      CORPORATE GOVERNANCE

      With the objectives of establishing and maintaining high standards of corporate governance, certain          B4(a)(i)/
policies and procedures have been put in place to promote the operation of Champion REIT in a transparent          B4(a)(ii)
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 will be followed by the Manager and Champion
REIT.

AUTHORIZATION STRUCTURE
      Champion REIT is a collective investment scheme authorized by the SFC under section 104 of the
SFO and regulated by the provisions of the REIT Code. The Manager has been authorized by the SFC under
section 116 of the SFO to conduct the regulated activity of asset management. The Manager has three                B4(a)(ii)
persons who are approved as Responsible Officers pursuant to the requirements of section 125 of the SFO
and paragraph 5.4 of the REIT Code, one of whom is an executive Director 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. The Trustee is
qualified to act as a trustee for collective investment schemes authorized under the SFO pursuant to the
REIT Code.

ROLES OF THE TRUSTEE AND MANAGER
      The Trustee and the Manager are independent of each other. The Trustee is responsible under the              B4(a)/
Trust Deed for the safe custody of the assets of Champion REIT on behalf of Unitholders. The Manager’s             B4(b)
role under the Trust Deed is to manage Champion REIT in accordance with the Trust Deed and, in
particular, to ensure that the financial and economic aspects of Champion REIT’s assets are professionally
managed in the sole interests of Unitholders.

FUNCTIONS OF THE BOARD OF DIRECTORS OF THE MANAGER
     The Board comprises nine members, four 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 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 REIT Code, the Manager is required to act in the best
interests of Unitholders, to whom it owes a fiduciary duty.

BOARD COMPOSITION
       With the aim of creating a board structure that is both effective and balanced, the size of the Board has
been set to provide for a minimum of five Directors and a maximum of 13 Directors. Pursuant to the
Manager’s corporate governance policy, independent non-executive Directors must be individuals who
fulfill the independence criteria set out in the compliance manual adopted by the Manager.
     The composition of the Board is determined using the following principles:
     (     the Chairman of the Board should be a non-executive Director of the Manager;
     (     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, and a minimum of three members, of the Board should be independent non-
           executive Directors.

                                                      156
                                     CORPORATE GOVERNANCE

     The composition will be reviewed regularly to ensure that the Board has the appropriate mix of
expertise and experience.

Audit Committee

      The Audit Committee is appointed by the Board from among the non-executive directors of the
Manager; a majority of the members of the Audit Committee are required to be independent non-executive
directors. As of the date of this Offering Circular, the members of the Audit Committee are Mr. David
Eldon, Professor K.C. Chan, Mr. Abraham Shek (each of whom are independent non-executive Directors)
and Dr. Lo Ka Shui and Mr. Ang Keng Lam (both of whom are non-executive Directors). Mr. David Eldon
has been appointed as the Chairman of the Audit Committee. The role of the Audit Committee is to monitor
and evaluate the effectiveness of the Manager’s internal controls. The Audit Committee also reviews the
quality and reliability of information prepared for inclusion in financial reports issued by the Manager. The
Audit Committee is responsible for the nomination of external auditors and reviewing the adequacy of
external audits in respect of cost, scope and performance.

     The Audit Committee’s responsibilities also include:

     (a)    reviewing external audit reports to ensure that, where deficiencies in internal controls have been
            identified, appropriate and prompt remedial action is taken by the management;

     (b)    monitoring the procedures in place to ensure compliance with applicable legislation, the REIT
            Code and the Listing Rules;

     (c)    reviewing all financial statements and all internal audit reports;

     (d)    monitoring the procedures established to regulate connected party transactions, including
            ensuring compliance with the provisions of the REIT Code relating to transactions between
            Champion REIT and a ‘‘connected person’’ (as defined in the REIT Code); and

     (e)    making recommendations to the Board on persons for appointment and reappointment as
            Directors to, and persons for removal as Directors from, the full Board.

Disclosures Committee

      The Disclosures Committee is appointed by the Board from among the Directors. The Disclosures
Committee will consist of the Chief Executive Officer, one non-executive Director, and one independent
non-executive Director of the Manager. As of the date of this Offering Circular, the members of the
Disclosures Committee are Mr. Abraham Shek, Dr. Lo Ka Shui and Mr. Jeremy Stewardson. Mr. Abraham
Shek has been appointed as the Chairman of the Disclosures Committee. The role of the Disclosures
Committee is to review matters relating to the disclosure of information to Unitholders and public
announcements. The Disclosures Committee also works with the management of the Manager to ensure the
disclosure of information is accurate and complete.

     The Disclosures Committee’s responsibilities include:

     (a)    reviewing and recommending to the Board on matters of corporate disclosure issues and
            announcements, financial reporting, connected party transactions, and potential areas of conflict
            of interests;

     (b)    overseeing compliance with applicable legal requirements and the continuity, accuracy, clarity,
            completeness and currency of information disseminated by or on behalf of Champion REIT to
            the public and applicable regulatory agencies;

                                                     157
                                     CORPORATE GOVERNANCE

     (c)    reviewing and approving all material non-public information and all public regulatory filings of
            or on behalf of Champion REIT prior to such information being disseminated to the public or
            filed with applicable regulatory agencies, as applicable; and
     (d)    reviewing periodic and current reports, proxy statements, information statements, registration
            statements and any other information filed with regulatory bodies.

MANAGEMENT OF BUSINESS RISK
      The Board will meet quarterly or more often if necessary and will review the financial performance of     B2(k)
the Manager and Champion REIT against a previously approved budget. The Board will also review any
risks to the assets of Champion REIT, examine liability management and will act upon any comments from
the auditors of Champion REIT.
      The Manager has appointed experienced and well-qualified management to handle the day-to-day
operations of the Manager and Champion REIT. In assessing business risk, the Board will consider the
economic environment and the property industry risk. It will review management reports and feasibility
studies on individual development projects prior to approving major transactions.

CONFLICTS OF INTERESTS AND BUSINESS COMPETITION WITH GREAT EAGLE
       Great Eagle, which is headquartered in Hong Kong, is engaged principally in property development,
management and investment in the office, retail and hotel sectors in Hong Kong. It also invests in office
properties in the United States, and invests in and manages hotels in North America, Europe, Australia and
New Zealand. Its core office/retail properties comprise (a) a 1.8 million sq. ft. office, retail and hotel
complex known as Langham Place in the prime shopping district of Mongkok, Kowloon that includes
550,168 sq. ft. of gross rentable area of Grade A office space and 302,187 sq. ft. of gross rentable area of
retail space; and (b) Great Eagle Centre in Wanchai, Hong Kong, which has 162,508 sq. ft. of gross rentable
area of Grade A office space and 37,144 sq. ft. of gross rentable area of retail space. In aggregate, it owns
712,676 sq. ft. of gross rentable area of Grade A office space and 339,331 sq. ft. of gross rentable area of
retail space in Hong Kong. See the section headed ‘‘Overview of Great Eagle Holdings Limited, Kerry
Properties Limited and Wing Tai Corporation Limited — Overview of Great Eagle’’ in this Offering
Circular.
      There may be circumstances where Champion REIT competes directly with Great Eagle and/or its
subsidiaries or associates for acquisitions or disposals of properties as well as for tenants within the Hong
Kong market as Great Eagle, its subsidiaries and associates are engaged in and/or may engage in, amongst
other things, investment in, and the development and management of, properties in the office, retail,
residential and hotel sectors in Hong Kong and elsewhere.
      In addition, there may be potential conflicts of interests between Great Eagle and Champion REIT in
respect of the performance of estate management services in relation to the Property or other properties that
may be acquired by Champion REIT, as the Manager, the Property Manager, the DMC Manager and the
DMC Sub-manager are each a wholly-owned subsidiary of Great Eagle and two members of the Board are
directors of Great Eagle and/or its affiliated companies.
     The Manager has instituted the following procedures to deal with conflicts of interests issues:
     (a)    The Manager will be a dedicated manager to Champion REIT and will not manage any other
            real estate investment trust or be involved in any other real property business.
     (b)    The majority of the Board are not related to Great Eagle and the independent non-executive
            Directors will act independently for the interests of Champion REIT. Furthermore, the
            management structure of the Manager will include the Audit Committee and the Disclosures
            Committee to promote a high level of corporate governance and address any potential conflicts

                                                    158
                                     CORPORATE GOVERNANCE

            of interests with Great Eagle. In addition, the Manager has adopted a compliance manual which
            sets out detailed compliance procedures in connection with its operations.

     (c)    The Manager will have a team of full-time senior management and employees that will operate
            independently of Great Eagle.

     (d)    All connected party transactions shall be managed in accordance with the procedures set out in
            the section headed ‘‘Connected Party Transactions’’ in this Offering Circular.

      In respect of matters in which a Director has an interest, direct or indirect, in any contract or
arrangement to which Champion REIT (whether through the Manager or the Trustee) is a party, such
interested Director shall disclose his interest to the Board and abstain from voting at a meeting of the
Directors at which the relevant matters are to be decided.

       With respect to estate management services, the Manager does not anticipate any significant likelihood
of conflicts of interests arising between Great Eagle and Champion REIT. Further, given the extensive
experience of the DMC Manager and the DMC Sub-manager in the estate management of Citibank Plaza,
the Manager considers that it is in the interest of Champion REIT for the existing estate management
arrangements to continue after the Global Offering. Although the DMC Manager is also currently the
manager of the office block in Langham Place which is majority owned by Great Eagle, the DMC Manager
does not have a substantive role in property management of Citibank Plaza as such functions have been
delegated to the DMC Sub-manager. The DMC Sub-manager currently has a team of more than 40 full time
staff exclusively dedicated to carrying out property management services in respect of Citibank Plaza with a
separate office location and IT system.

       With respect to leasing and marketing functions, the Manager does not anticipate any significant
likelihood of conflicts of interests arising between Great Eagle and Champion REIT because the Property
Manager will provide property management services (including leasing and marketing functions) in respect
of the Property exclusively and will not perform any property management functions in respect of Great
Eagle’s properties. The Property Manager has an office location that is separate from the other Great Eagle
entities that perform leasing and marketing functions in respect of other properties held by Great Eagle. To
ensure that there is segregation of information between the Property Manager and other Great Eagle entities,
the Property Manager has its own database with access and security codes different from those of Great
Eagle.

GENERAL MEETINGS

      Champion 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 of Unitholders if requested in writing by not less
than two Unitholders registered as holding together not less than 10% of the Units for the time being in
issue and outstanding. At least 14 days’ notice of the meeting will be given to Unitholders, except that
21 days’ notice will be given to Unitholders where a Special Resolution is proposed for consideration at
such meeting, 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 together not less than
10% of the Units for the time being in issue and outstanding 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 together not
less than 25% of the Units for the time being in issue and outstanding.

                                                    159
                                     CORPORATE GOVERNANCE

REPORTING AND TRANSPARENCY
      Champion REIT will prepare its accounts in accordance with Hong Kong GAAP with a financial year-            B16/
end of December 31 and a financial half-year end of June 30. In accordance with the REIT Code, the annual         B17
report and accounts for Champion 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.
     As required by the REIT Code, the Manager will ensure that public announcements of material
information and developments with respect to Champion REIT will be made on a timely basis in order to
keep Unitholders appraised of the position of Champion REIT. Announcements will be made by publishing
them in at least one leading Hong Kong English language and one Chinese language daily newspaper or
through other means permitted by the SFC.

ISSUES OF FURTHER UNITS POST-LISTING
      To minimize 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 (a) free of such pre-emption rights up to an aggregate maximum in any financial year
of 20% (or such other percentage of outstanding Units as may, from time to time, be prescribed by the SFC)
of the number of Units outstanding at the end of the previous financial year; and (b) free of pre-emption
rights in other circumstances provided that the approval of Unitholders by way of an Ordinary Resolution is
obtained.
      Except pursuant to the issue of Units under the Global Offering, an issue of Units to a connected
person of Champion REIT (other than as part of an offer made to all Unitholders on a pro rata basis, and
other than issues of Units to the Manager as payment of the Manager’s Fee in accordance with certain
waivers granted by the SFC) shall require specific prior approval of Unitholders by way of an Ordinary
Resolution in respect of which the connected person shall be prohibited from voting or being counted in the
quorum for the meeting of the Unitholders. Where the issue of Units would give rise to a conflict of interest
on the part of the Manager or its connected persons, the Manager and its connected persons shall abstain
from voting in relation to any issuance of Units.
     Champion REIT is also subject to certain restrictions in respect of the Units issued by it, the details of
which are set out in the section headed ‘‘The Global Offering’’ in this Offering Circular.

INTERESTS OF, AND DEALINGS IN UNITS BY, DIRECTORS, THE MANAGER OR THE
SIGNIFICANT UNITHOLDERS
      To monitor and supervise any dealings of Units, the Manager has adopted a code containing rules on
dealings by the Directors and the Manager. Pursuant to this code, any Directors or the Manager wishing to
deal in the Units must first have regard to provisions analogous to those set out in Parts XIII and XIV of the
SFO with respect to insider dealing and market misconduct. In addition, a Director must not make any
unauthorized disclosure of confidential information or make any use of such information for the advantage
of himself or others.
      Directors who are aware of or privy to any negotiations or agreements related to intended acquisitions
or disposals which are significant transactions 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
Champion REIT’s securities for a similar period.

                                                     160
                                      CORPORATE GOVERNANCE

      Similarly, where the Manager is in possession of any unpublished price-sensitive information, it must
refrain from dealing in the Units as soon as it becomes aware of, or privy to, such information until proper
disclosure of the information in accordance with the REIT Code and any applicable Listing Rules.

      During the period commencing one month immediately preceding the earlier of the date of the board
meeting for the approval of Champion REIT’s results for any period as required under the REIT Code and
the deadline for Champion REIT to publish an announcement of its results for any period as required under
the REIT Code, and ending on the date of the results announcement, a Director or the Manager must not
deal in any Units unless the circumstances are exceptional, for example, the exceptional circumstances as
described in Rule C14 of Appendix 10 to the Listing Rules. In any event, in the case of dealings by a
Director or the Manager, the Directors or the Manager must comply with the procedure set out in the code
containing rules on dealings in Units by the Directors and the Manager adopted by the Manager.

     The codes of good practice may also be extended to senior executives, officers and other employees of
the Manager as the Board may determine.

     The Manager has also adopted procedures for the monitoring of disclosure of interests by Directors,
the Chief Executive Officer of the Manager, and the Manager. The provisions of Part XV of the SFO shall
be deemed to apply to the Manager, the Directors and Chief Executive Officer of the Manager and each
Unitholder and all persons claiming through or under them.

      Under the Trust Deed and by virtue of the deemed application of Part XV of the SFO, Unitholders will
have a notifiable interest if their holdings of Units reach or exceed the ‘‘notifiable percentage level’’ (as
defined in the SFO for the purposes of Part XV of the SFO, and which is 5% as of the date of this Offering
Circular) of the Units then in issue, and will be required to notify the Hong Kong Stock Exchange, the
Trustee and the Manager of their holdings in Champion 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
Trustee and any Unitholder at any time during business hours upon reasonable notice to the Manager. For
further details of the Trust Deed, see the section headed ‘‘The Trust Deed’’ in this Offering Circular.

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: (a) change in the Manager’s investment
policies for Champion REIT; (b) disposal of any land or an interest, option or right over any of the land
forming part of the assets of Champion REIT or shares in any Property Company holding such land, option            7.8
or right over any of the land for Champion REIT within two years of the acquisition of such land; (c) any
increase in the rate above the permitted limit or change in structure of the Manager’s fees; (d) any increase
in the rate above the permitted limit or change in structure of the Trustee’s fees; (e) certain modifications of
the Trust Deed; (f) termination of Champion REIT; and (g) merger of Champion REIT. Unitholders may
also, by way of Special Resolution, (i) remove Champion REIT’s auditors and appoint other auditors or
(ii) remove the Trustee or the Manager. As stated above, the quorum for passing a Special Resolution is two
or more Unitholders present in person or by proxy registered as holding together not less than 25% of the
Units for the time being in issue and outstanding.




                                                      161
                                             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
   Champion REIT. The Trust Deed is available for inspection at the registered office of the Manager at
   Suite 2804, 28/F, Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong.


THE TRUST DEED

     Champion REIT is a real estate investment trust constituted by the Trust Deed and regulated by the              B1
SFO, the REIT Code, Chapter 20 of the Listing Rules and the Listing Agreement.

      The Trust Deed was entered into on April 26, 2006 between Eagle Asset Management (CP) Limited,
as the Manager of Champion REIT, and HSBC Institutional Trust Services (Asia) Limited, as the trustee of
Champion REIT.

      The terms and conditions of the Trust Deed shall be binding on each Unitholder (and all persons
claiming through or under such Unitholder) as if such Unitholder had been a party to the Trust Deed and as
if the Trust Deed contained covenants by such Unitholder to observe and be bound by all the provisions of
the Trust Deed and an authorization by each Unitholder to do all such acts and things as the Trust Deed may
require the Manager or the Trustee, as the case may be, to do.

     The provisions of the REIT Code prescribe certain terms of the Trust Deed and certain rights, duties
and obligations of the Manager, the Trustee and Unitholders under the Trust Deed.

REIT STRUCTURE

      Champion REIT is established in the form of a unit trust under Hong Kong law to invest in real estate,
either directly or indirectly through special purpose vehicles. The Manager must manage Champion REIT
so that the principal investments of Champion REIT are real estate or other authorized investments. For
further details of the investment objectives and policies of the Manager, see the section headed ‘‘Strategy’’
in this Offering Circular. The assets of Champion REIT will be held by the Trustee on trust for the benefit
of Unitholders.

THE UNITS AND UNITHOLDERS

      The rights and interests of Unitholders are contained 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 Champion REIT is divided into Units. A Unitholder has no equitable or
proprietary interest in the underlying assets of Champion REIT and is not entitled to the transfer to it of any
asset (or any part thereof) or of any estate or interest in any assets (or any part thereof) of Champion REIT.

      Unless otherwise expressly provided in the Trust Deed, a Unitholder may not (a) interfere or seek to
interfere with or question the rights, powers, obligations, authority or discretion of the Trustee or the
Manager to the extent those rights, powers, obligations, authority or discretion are properly exercised or
performed under the Trust Deed; (b) claim or exercise any right in respect of the assets of Champion REIT
(or any part thereof) or lodge any caveat or other notice affecting the real estate assets and real estate-related
assets of Champion REIT (or any part thereof); or (c) require that any asset of Champion REIT be
transferred to the Unitholder.

                                                       162
                                            THE TRUST DEED

ISSUE OF UNITS
     The following is a summary of the provisions of the Trust Deed relating to the issue of Units.
       The Manager has the exclusive right to effect the creation and issue of Units for the account of
Champion REIT. The offer of Units for the purpose of the Global Offering shall be at the Offer Price
initially stated to be in the range of HK$5.00 to HK$5.75 per Unit, with the actual Offer Price to be
determined by agreement between the Joint Lead Underwriters, Great Eagle and the Manager on the Price
Determination Date.
      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
capitalization of Champion REIT by more than 50%, 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.
      Subject to certain restrictions in the Trust Deed on issue of new Units to a connected person, 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% (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.
      Subject to certain limits described in the Trust Deed, the Manager may effect the issue of Units (or the
grant of any option to subscribe for Units) on behalf of Champion REIT on any Business Day at an issue
price that is equal to the Market Price or, in its discretion, at a premium to the Market Price or at a discount
of no more than 20% to the Market Price.
      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 any rights issue, the Manager may, in its absolute discretion, elect not to extend an offer
of Units under the rights issue to those Unitholders whose addresses are outside Hong Kong. In such event,
the rights or entitlement to the Units of such Unitholders will be offered for sale by the Manager as the
nominee and authorized agent of each such relevant Unitholder and at such price as the Manager may
determine. Where necessary, the Trustee shall have the discretion to impose such other terms and conditions
in connection with such sale. The proceeds of any such sale, if successful, will be paid to the relevant
Unitholders.

NO REPURCHASE OR REDEMPTION OF UNITS
      Unitholders have no right to demand the repurchase or redemption of their Units. The Manager must
not repurchase or redeem any Units unless permitted to do so by the relevant codes and guidelines issued by
the SFC from time to time. If such codes or guidelines are issued by the SFC, any repurchase or redemption
of Units by the Manager must be effected in accordance with such codes and guidelines.

Public Float Requirement
      The Manager shall use reasonable efforts to ensure that a minimum of 25% (or any other percentage
specified or permitted by the SFC from time to time) (the ‘‘Public Float Percentage’’) of the outstanding
Units are held in public hands. In the event that the Manager becomes aware that the percentage of the

                                                      163
                                           THE TRUST DEED

outstanding Units in the public hands has fallen below the Public Float Percentage, the Manager shall use its
reasonable efforts to restore the percentage of Units held in public hands to at least the Public Float
Percentage of the outstanding Units. The Manager shall adopt proper internal procedures for monitoring the
public float and shall notify the Trustee and the SFC promptly if such percentage falls below the Public
Float Percentage of the outstanding Units and issue an announcement regarding the same.

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 audited accounts and the annual reports of Champion REIT; and
     (c)    participate in the termination of Champion REIT by receiving a share of all net cash proceeds       B17
            derived from the sale or realization of the assets of Champion REIT less any liabilities, in
            accordance with their proportionate interests in Champion REIT at the date of the termination of
            Champion REIT.
     No Unitholder has a right to require that any asset of Champion REIT be transferred to him.
     Further, Unitholders cannot give any directions to the Trustee or the Manager (whether at a meeting of
Unitholders or otherwise) if it would require the Trustee or the Manager to do or omit doing anything which
may result in:
     (a)    Champion REIT ceasing to comply with the REIT Code, the Listing Rules or any condition to
            the authorization of Champion REIT by the SFC; or
     (b)    the exercise of any discretion expressly conferred on the Trustee or the Manager by the
            Trust Deed or the determination of any matter which, under the Trust Deed, requires the
            agreement of either or both of the Trustee and the Manager.
     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 any creditor of Champion REIT in the event that the liabilities
of Champion REIT exceed its assets.

AMENDMENT OF THE TRUST DEED
     Save where an amendment to the Trust Deed has been approved by a Special Resolution passed at a
meeting of Unitholders duly convened and held in accordance with the provisions of the Trust Deed, no
amendment may be made to the provisions of the Trust Deed unless the Trustee certifies in writing, in its
opinion, that such amendment:
     (a)    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 Unitholders under the
            Trust Deed and does not increase the costs and charges payable from the assets of Champion
            REIT;
     (b)    is necessary in order to comply with applicable fiscal, statutory or official requirements
            (whether or not having the force of law), including, without limitation, requirements under the
            SFO, the REIT Code, the Listing Rules or any other applicable rules of any other relevant
            ‘‘Specified Stock Exchange’’ (as defined in the Trust Deed) on which Champion REIT may be
            listed; or
     (c)    is necessary to correct a manifest error.

                                                    164
                                           THE TRUST DEED

      No such amendment shall impose upon any Unitholder any obligation to make any further payments
in respect of his Units or to accept any liability in respect thereof.

MEETING OF UNITHOLDERS

      A general meeting of Unitholders shall be convened by the Manager at least once in every calendar
year in addition to any other meetings in that year and the Manager shall specify the meeting as the Annual
General Meeting in the notice calling it. The time and place of the Annual General Meeting shall be
appointed by the Manager.

      A meeting of Unitholders may be convened at any time by the Trustee or the Manager, respectively,
and the Manager shall convene such a meeting at the request in writing of not less than two Unitholders
registered as holding together not less than 10% of the Units for the time being in issue and outstanding.
The party convening the meeting may convene a meeting of Unitholders at such time or place in Hong
Kong, subject to the provisions of the Trust Deed, as such party may think fit and propose resolutions for
consideration at such meeting.

     The Manager or a person nominated by the Manager (if present) shall be the Chairman of any meeting
of Unitholders.

      Except as otherwise provided for in the Trust Deed, at least 14 days’ notice of the meeting shall be
given to Unitholders where an Ordinary Resolution is proposed for consideration at such meeting and at
least 21 days’ notice of the meeting shall be given to Unitholders where a Special Resolution is proposed for
consideration at such meeting, in each case 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. Each notice shall specify the place, day and hour of
the meeting and the terms of any resolution to be proposed at such meeting. 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. No proceedings at any meeting shall be invalidated by the accidental
omission to give notice to or the non-receipt of notice by any of Unitholders.

      Save for the purpose of passing a Special Resolution, the quorum for any meeting of Unitholders for
the transaction of business shall be two or more Unitholders present in person or by proxy registered as
holding together not less than 10% of the Units for the time being in issue and outstanding. The quorum for
passing a Special Resolution shall be two or more Unitholders present in person or by proxy registered as
holding together not less than 25% of the Units for the time being in issue and outstanding. No business
shall be transacted at any meeting unless the requisite quorum is present at the commencement of business.
Split proxies shall, for the avoidance of doubt, be permitted.

      For a meeting at which Unitholders have 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 (where the
Unitholder(s) concerned is (are) not connected persons related to the Manager) or the Trustee (where the
Unitholder(s) concerned is (are) connected persons related to the Manager), if appropriate, in its absolute
opinion) including an issue of new Units where a Unitholder may increase his holdings of Units by more
than his pro rata share, such Unitholders shall be prohibited from voting their own Units at such meeting or
being counted in the quorum for such meeting.

      At any meeting, a resolution put to the meeting shall be decided on a poll and the result of the poll
shall be deemed to be the resolution of the meeting. On a poll, every Unitholder who is present in person or
by proxy shall have one vote for every Unit of which he is the Unitholder provided such Units are fully
paid-up. Votes cast by a Unitholder in contravention of the REIT Code or Listing Rules shall not be
counted. On a poll, votes may be given either personally or by proxy. The form of the instrument of proxy
used shall be in accordance with the form illustrated in the Trust Deed or in any other form which the
Trustee shall approve.

                                                    165
                                            THE TRUST DEED

     Any Unitholder being a corporation may by resolution of its directors (or other governing body)
authorize any person to act as its representative at any meeting of Unitholders. A person so authorized shall
have the same rights and powers as if he were an individual Unitholder.
      More than one proxy or corporate representative may be appointed by the HKSCC Nominees to attend
and vote at Unitholders’ meetings and no documents of title or notarized authorization in respect of such
appointment shall be required to be produced by such representatives. Where a Unitholder is a recognized
clearing house (within the meaning of the SFO) or its nominees, it may authorize such person(s) as it thinks
fit to act as its representative(s) or proxy(ies) at any Unitholders’ meeting or any class of Unitholders,
provided that, if more than one person is so authorized, the authorization or proxy form must specify the
number and class of Units in respect of which each such person is so authorized.
      In accordance with the Trust Deed, a meeting of Unitholders will be convened to pass Special
Resolutions when decisions with respect to certain matters require the prior approval of Unitholders by way
of Special Resolution. Such matters include, without limitation: (a) change in the Manager’s investment
policies or strategies for Champion REIT; (b) disposal of any land or an interest, option or right over any of     7.8
the land forming part of the assets of Champion REIT or shares in any Property Company holding such
land, option or right over any of the land for Champion REIT within two years of the acquisition of such
land; (c) any increase in the rate above the permitted limit or change in structure of the Manager’s fees;
(d) any increase in the rate above the permitted limit or change in structure of the Trustee’s fees; (e) certain
modifications of the Trust Deed; (f) termination of Champion REIT; and (g) merger of Champion REIT.
Unitholders may also, by way of Special Resolution, (i) remove Champion REIT’s auditors and appoint
other auditors or (ii) remove the Trustee or the Manager.
      Any decisions 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. Such matters requiring approval by
way of Ordinary Resolution include, without limitation, (a) subdivision or consolidation of Units; (b) any
issue of Units after the Listing Date which would increase the market capitalization of Champion REIT by
more than 50%; (c) any issue of Units during any financial year that would 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% (or such other percentage of outstanding Units as may, from time to time, be prescribed by the SFC);
(d) except pursuant to an initial public offering or a rights issue, an issue of new Units to a connected person
(other than as part of an offer made to all Unitholders on a pro rata basis); and (e) the election by the
Manager for the acquisition fee or the divestment fee, which is to be paid to the Manager in the form of
cash, to be paid in the form of Units or partly in cash and partly in the form of Units. Unitholders may also,
by way of Ordinary Resolution, dismiss any approved valuer appointed by the Trustee on behalf of
Champion REIT in accordance with the Trust Deed.

POWERS, DUTIES AND OBLIGATIONS OF THE TRUSTEE                                                                      B4(b)

     The Trustee’s powers, duties and obligations are set out in the Trust Deed. The powers and duties of
the Trustee include, but are not limited to:
     (a)    acting as trustee of Champion REIT and, therefore, protecting the rights and interests of
            Unitholders;
     (b)    holding the assets of Champion REIT in trust for the benefit of the Unitholders;
     (c)    overseeing the activities of the Manager in accordance with and for compliance with the
            Trust Deed, other relevant constitutive documents and the regulatory requirements applicable to
            Champion REIT; and
     (d)    ensuring that the assets of Champion REIT are properly segregated and held for the benefit of
            the Unitholders in accordance with the provisions of the Trust Deed.

                                                      166
                                            THE TRUST DEED

      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.
     In the exercise of its powers, the Trustee may, on the instructions of the Manager in writing, and
subject to the provisions of the Trust Deed, acquire or dispose of any real or personal property, borrow and
encumber any asset of Champion REIT.
      Although the Trustee may, upon the request of the Manager, borrow money and obtain other financial
accommodation for the purpose of Champion REIT, both on a secured and an unsecured basis, the Trustee
shall take all reasonable care to ensure that the investment and borrowing provisions set out in the
Trust Deed and the conditions under which Champion REIT was authorized by the SFC are complied with.
The Manager must not direct the Trustee to incur any borrowing if to do so would mean that the aggregate         7.9
borrowings of Champion REIT exceed 45% (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 assets of Champion REIT as set out in Champion REIT’s latest published audited accounts
immediately prior to such borrowing being effected.
      The Trustee is not personally liable to a Unitholder in connection with the office of the Trustee except
in respect of its own fraud, negligence, wilful default, breach of the Trust Deed or other constitutive
documents to which it is a party, breach of the REIT Code or any applicable laws and regulations or a
breach of trust. Any liability incurred and any indemnity to be given by the Trustee shall be limited to the
assets of Champion REIT over which the Trustee has recourse, provided that the Trustee has acted without
fraud, negligence, wilful default, breach of the Trust Deed or other constitutive documents to which it is a
party, breach of the REIT Code or any applicable laws and regulations or a breach of trust. The Trust Deed
contains certain indemnities in favor of the Trustee under which it will be indemnified out of the assets of
Champion REIT for liability arising in connection with certain acts or omissions.

RETIREMENT AND REPLACEMENT OF THE TRUSTEE
     The Trustee may retire or be replaced under the circumstances set out below:
     (a)    The Trustee shall not be entitled to retire voluntarily except upon the appointment (with, for so
            long as the Champion REIT is authorized 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 analogous process occurs or any analogous
                     person is appointed in respect of the Trustee);
             (ii)    if the Trustee ceases to carry on business; or
             (iii)   if the Unitholders by a Special Resolution duly passed at a meeting of Unitholders held
                     in accordance with the provisions of the Trust Deed, and of which at least 21 days’
                     notice has been given to the Trustee and the Manager, shall so decide.

TRUSTEE’S FEE                                                                                                    B14(b)/
                                                                                                                 B14(c)/
     Champion REIT will pay the Trustee an ongoing fee not exceeding the rate of 0.03% per annum of the
value of the Deposited Property, subject to a minimum amount of HK$200,000 per month. The Trustee’s              9.10

ongoing fee may be further increased to a maximum of 0.06% per annum of the value of the Deposited
Property. The Trustee shall give at least one month’s prior written notice to the Manager and the
Unitholders of any increase in the rate of the remuneration of the Trustee that the Trustee proposes to charge

                                                      167
                                            THE TRUST DEED

from time to time up to (but not exceeding) the permitted limit of 0.06% per annum of the value of the
Deposited Property. Any increase in the rate of the remuneration of the Trustee above the permitted level or
any change in the structure of the Trustee’s fees must be approved by a Special Resolution of Unitholders
passed at a Unitholders’ meeting duly convened under the provisions of the Trust Deed. Subject to the limits
set forth above, the rate of the Trustee’s ongoing fee shall be the rate as agreed from time to time between
the Trustee and the Manager.
       The ongoing fee of the Trustee shall be paid quarterly in arrears, which will be calculated by reference
to the unaudited quarterly management accounts of Champion REIT prepared by the Manager for the
relevant quarter. The amount of the ongoing fees actually paid to the Trustee during each Financial Year
shall be adjusted at the end of the relevant Financial Year upon publication of the audited annual accounts of
Champion REIT for that Financial Year, to reflect any differences between (a) the actual amount paid to the
Trustee in that Financial Year; and (b) the amount calculated by reference to the audited annual accounts of
Champion REIT for the relevant Financial Year that the Trustee is entitled to receive. If the total amount
actually paid to the Trustee during the Financial Year exceeds the amount the Trustee is entitled to receive in
respect of the relevant Financial Year, the Trustee shall pay to Champion REIT the difference within 30 days
after the publication of the audited annual accounts. If the total amount actually paid to the Trustee during
the Financial Year is less than the amount the Trustee is entitled to receive in respect of the relevant
Financial Year, then Champion REIT shall pay the difference to the Trustee.
      In addition to the Trustee’s ongoing fee as described above, Champion REIT will pay to the Trustee a
one-time inception fee of no more than HK$200,000.
      Under the terms of the Trust Deed, if the Trustee finds it expedient or necessary or is requested by the
Manager to undertake duties that are of an exceptional nature or otherwise outside the scope of the Trustee’s
normal duties in the ordinary course of normal day-to-day business operation of Champion REIT, including
but not limited to any services in relation to acquisition or divestment or disposal of Investments by the
Trust after the IPO or subsequent closing of Champion REIT after the IPO, the Trustee is entitled to charge,
out of the assets of Champion REIT, such fees on a time-cost basis at a rate to be agreed with the Manager
from time to time. However, unless otherwise approved by the Unitholders by way of an ordinary
resolution, (i) the aggregate amount of such fees shall not exceed 0.05% of (a) the acquisition price (in the
case of an acquisition of any real estate whether directly or indirectly by Champion REIT) or (b) the sale
price (in the case of a sale or disposal of real estate whether directly or indirectly held by Champion REIT);
and (ii) the aggregate amount of such fees that are not related to any specific transaction described in
(i) above shall not exceed 20% of the Trustee’s ongoing fees for that financial year.

TERMINATION OF CHAMPION REIT
      Champion REIT shall terminate in the event that (a) the Units are not listed on the Hong Kong Stock         B2(n)/
Exchange by December 31, 2006 or such later date as may be agreed by the Manager and the Trustee; or (b)          B29
for any reason, there is no Manager under Champion REIT for a period of more than 60 calendar days or
such longer period as the Trustee considers appropriate. Otherwise, Champion REIT shall continue until the
expiration of 80 years less one day from the date of commencement of Champion REIT or until it is
terminated in accordance with the provisions of the Trust Deed.
      Unless Champion REIT is wound up by a court order or is otherwise terminated in the circumstances
described above or by the operation of law, the termination of Champion REIT shall require specific prior
approval from the Unitholders by Special Resolution of the Unitholders at a meeting to be convened by the
Manager in accordance with the provisions of the Trust Deed.
      Where the proposal to terminate Champion REIT is recommended by the Manager, the Manager and
connected persons related to it shall abstain from voting if they hold interests in the Units and if their
interest (at the sole determination of the Trustee) in terminating Champion REIT is different from that of all
other Unitholders.

                                                     168
                                           THE TRUST DEED

      The Trustee shall not be liable for any consequences arising out of such termination recommended by
the Manager and approved by Special Resolution of the Unitholders in the absence of fraud, bad faith,
wilful default or negligence.
     An announcement on the intention to terminate Champion REIT shall be made by the Manager to the
Unitholders as soon as practicable in accordance with the provisions of the Trust Deed.
      The Manager shall serve on the Unitholders, within 21 Business Days of the announcement on the
termination of Champion REIT, a circular convening an extraordinary general meeting containing the
following information:
     (a)    the rationale for the termination of Champion REIT;
     (b)    the effective date of the termination;
     (c)    the manner in which the assets of Champion REIT are to be dealt with;
     (d)    the procedures and timing for the distribution of the proceeds of the termination;
     (e)    a valuation report of Champion REIT prepared by an approved valuer which is dated not more
            than three months before the date of the circular;
     (f)    the alternatives available to the Unitholders;
     (g)    the estimated costs of the termination and who is expected to bear such costs; and
     (h)    such other material information that the Manager determines that the Unitholders should be
            informed of.
      No further Units shall be created, issued, cancelled or sold upon the Unitholders’ approval of the
termination of Champion REIT. No transfer of Units may be registered and no other change to the register
may be made without the sanction of the Trustee following the announcement referred to above. No further
investments may be made by Champion REIT upon its termination and the obligations of the Trustee, the
Manager and the property valuer shall continue until the completion of the liquidation of the assets and the
termination of Champion REIT.
      Upon approval of the proposal to terminate Champion REIT at the extraordinary general meeting
referred to above, the Trustee shall:
     (a)    oversee the realization of the assets of Champion REIT by the Manager, which the Manager
            shall effect as soon as practicable;
     (b)    ensure that the Manager shall repay any outstanding borrowings effected by or for the account
            of Champion REIT, together with any interest thereon but remaining unpaid; and
     (c)    ensure the proper discharge of all other obligations and liabilities of Champion REIT.
      All assets of Champion REIT shall be disposed of through public auction or any form of open tender.
The disposal shall be conducted at arm’s length and conducted in the best interests of the Unitholders. The
disposal price shall be the best available price obtained through public auction or open tender. Save as is
provided in the REIT Code, the Manager shall have absolute discretion in carrying out the sale and
repayment in such manner and within such period as the Manager deems advisable, provided that such
period may not exceed 24 months and where it exceeds 12 months, it must be in the interests of the
Unitholders and the Unitholders shall be informed by way of an announcement. Subject to the provisions of
the Trust Deed, any net cash proceeds derived from the sale or realization of such assets of Champion REIT
shall (at such time or times as the Trustee shall deem convenient) be distributed to the Unitholders pro rata
to the number of Units held or deemed to be held by them, respectively, at the date of the termination of
Champion REIT.

                                                     169
                                          THE TRUST DEED

     Upon the completion of the liquidation of the assets of Champion REIT, the following shall be
prepared:
     (a)   a Manager’s review and comment on the performance of Champion REIT and an explanation as
           to how the assets of Champion REIT have been disposed of and the transaction prices and major
           terms of disposal;
     (b)   a Trustee’s report that the Manager has managed and liquidated the assets of Champion REIT in
           accordance with the REIT Code and the provisions of the Trust Deed;
     (c)   financial statements of Champion REIT which shall be distributed to the Unitholders by the
           Manager within three months of the completion of the liquidation of the assets of Champion
           REIT and a copy filed with the SFC; and
     (d)   an auditors’ report.
      Following the disposal of the assets of Champion REIT and the distribution of the net cash proceeds
derived from the sale or realization of the assets of Champion REIT, Champion REIT will terminate.

MERGER OF CHAMPION REIT
      The merger of Champion REIT shall require the specific prior approval from the Unitholders by            B30
Special Resolution of the Unitholders at a meeting to be convened by the Manager in accordance with the
provisions of the Trust Deed.
      Where the proposal to merge Champion REIT is recommended by the Manager, the Manager and
connected persons related to it shall abstain from voting if they hold interests in the Units and if their
interest (at the sole determination of the Trustee) in merging Champion REIT is different from that of all
other Unitholders.
       Where upon such merger the Trustee retires, any deed effecting the merger shall include
indemnification of the Trustee to its satisfaction. In case the merger is recommended by the Manager and
approved by Special Resolution of the Unitholders, the Trustee shall cease to be liable for obligations and
liabilities of Champion REIT subsisting at the time of the 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 such merger of Champion REIT, other than any liability arising from the
fraud, wilful default, bad faith or negligence of the Trustee.
     An announcement on the intention to merge Champion REIT shall be made by the Manager to the
Unitholders as soon as practicable in accordance with the provisions of the Trust Deed.
     The Manager shall serve on the Unitholders, within 21 Business Days of the announcement on the
merger of Champion REIT, a circular convening an extraordinary general meeting containing the following
information:
     (a)   the rationale for the merger of Champion REIT;
     (b)   the effective date of the merger;
     (c)   the manner in which the assets of Champion REIT 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 Champion REIT prepared by an approved valuer which is dated not more
           than three months before the date of the circular;
     (f)   the alternatives available to the Unitholders;
     (g)   the estimated costs of the merger and who is expected to bear such costs; and

                                                    170
                                           THE TRUST DEED

     (h)   such other material information that the Manager determines that the Unitholders should be
           informed of.
     No further Units shall be created, issued, cancelled or sold upon the Unitholders’ approval of the
merger of Champion REIT. No transfer of Units may be registered and no other change to the register may
be made without the sanction of the Trustee following the announcement referred to above.
     Upon completion of the merger of Champion REIT, the following shall be prepared:
     (a)   a Manager’s review and comment on the performance of Champion REIT and an explanation as
           to how the assets of Champion REIT have been accounted for in the merged scheme;
     (b)   a Trustee’s report that the Manager has managed and merged Champion REIT in accordance
           with the REIT Code and the provisions of the Trust Deed;
     (c)   financial statements of Champion REIT which shall be distributed to the Unitholders by the
           Manager within three months of the completion of the merger and a copy filed with the SFC;
           and
     (d)   an auditors’ report.
      Any merger of Champion REIT pursuant to the foregoing may only take effect upon the successor
entity assuming responsibility for the performance and discharge of all obligations and liabilities of
Champion REIT subsisting at the time of the merger.

DEEMED APPLICATION OF PART XV OF THE SECURITIES AND FUTURES ORDINANCE
      With certain exceptions, the provisions of Part XV of the SFO, which requires shareholders of Hong
Kong listed corporations to notify the Hong Kong Stock Exchange and the listed corporation if their
shareholding interests reach or exceed a certain percentage (which is 5% as of the date of this Offering
Circular), have been incorporated into the Trust Deed, mutatis mutandis, and have been made binding on the
directors and chief executive of the Manager, the Manager and on each Unitholder and all persons claiming
through or under him as if:
     (a)   Champion REIT is a ‘‘listed corporation’’ for the purposes of Part XV of the SFO;
     (b)   the ‘‘relevant share capital’’ of such listed corporation are references to: (a) the Units which are
           issued and outstanding from time to time; and (b) the 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;
     (d)   a person who is interested in a Unit is interested in a share in the relevant share capital of such
           listed corporation;
     (e)   the Manager itself is a director of such listed corporation;
     (f)   the directors and chief executive of the Manager are the directors and chief executive
           respectively of such listed corporation;
     (g)   ‘‘percentage level’’, in relation to a notifiable interest, means the percentage figure found by
           expressing the aggregate number of Units in which the person is interested immediately before
           or, as the case may be, immediately after the relevant time as a percentage of all the Units in
           issue at the relevant time as published by the Manager and rounding that figure down (if it is not
           a whole number) to the next whole number; and
     (h)   ‘‘percentage level’’, in relation to a short position, means the percentage figure found by
           expressing the aggregate number of Units in which the person has a short position immediately
           before or, as the case may be, immediately after the relevant time as a percentage of all the

                                                    171
                                             THE TRUST DEED

             Units in issue at the relevant time as published by the Manager and rounding that figure down (if
             it is not a whole number) to the next whole number.
     Specifically, the Trust Deed provides that, subject to certain modifications set out in the Trust Deed:        5.13

     (a)     the duty of disclosure under Divisions 2 to 4 of Part XV of the SFO shall arise in respect of a
             person who (i) is interested in Units, or who acquires an interest in or who ceases to be
             interested in Units; or (ii) has a short position in Units, or who comes to have or ceases to have a
             short position in Units; and

     (b)     the duty of disclosure under Divisions 7 to 9 of Part XV of the SFO shall arise in respect of the
             Manager and each director and chief executive of the Manager who (i) is interested in Units, or
             who acquires an interest in or who ceases to be interested in Units, or (ii) has a short position in
             Units, or who comes to have or ceases to have a short position in Units.

      Where a duty of disclosure arises by virtue of the deemed application of Part XV of the SFO, the
relevant person shall give notice to the Manager and the Hong Kong Stock Exchange and the Manager shall
promptly send a copy of the notification received by it to the Trustee.

      The powers and duties of a ‘‘listed corporation’’ under Division 5 of Part XV of the SFO to investigate
ownership of interests in Units shall be exercisable or performed by the Trustee and the Manager, provided
that the power shall be exercised or performed solely by the Manager, save where the interest or short
position (or deemed interest or deemed short position) relates to Units held by the Manager or to Units in
which the Manager is interested or has a short position, in which case the power shall be exercised by or the
duty shall be performed solely by the Trustee.

      If a person who has a duty of disclosure under the Trust Deed fails to make notification in accordance
with the provisions of the Trust Deed, irrespective of whether that person is a Unitholder or not, the Units in
which that person is (or is deemed to be) interested in (the ‘‘Affected Units’’) shall be subject to any or all
of the following actions which (a) if the person interested in the Affected Units is a person other than the
Manager, the Manager; or (b) if the person interested in the Affected Units is the Manager, the Trustee,
may, in its absolute discretion, take in respect of any or all of the Affected Units:

     (i)     declare that the voting rights attached to any or all of the Affected Units to be suspended (and,
             upon such declaration, such voting rights shall be suspended for all purposes in connection with
             Champion REIT);

     (ii)    suspend the payment of any distributions in respect of any or all of the Affected Units (and,
             upon such suspension, any such distributions shall be retained in a trust account in the name of
             (I) (where the person interested in the Affected Units is a person other than the Manager) the
             Manager or (II) where the person interested in the Affected Units is the Manager) the Trustee,
             pending the application of such distributions);

     (iii)   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; and/or

     (iv)    suspend registration and/or decline to register any transfer of part or all of the Affected Units,

until the relevant notification requirements are fully complied with to the satisfaction of the Manager or the
Trustee, as the case may be.

       Each Unitholder and all persons claiming through or under him expressly acknowledge and agree to
the grant of the rights and powers set out above to the Manager and the Trustee and agree to be bound by
any action taken by the Manager or the Trustee, as the case may be, pursuant to the Trust Deed in good
faith.

                                                      172
                     MATERIAL AGREEMENTS AND OTHER DOCUMENTS
                             RELATING TO CHAMPION REIT

       The agreements described in this section are complex documents and only a summary of the                 B2(f)/
  agreements is set out herein. Investors should refer to the agreements themselves to confirm specific         8.4(b)/
  information or for a detailed understanding of Champion REIT. The agreements are available for                7.7
  inspection at the registered office of the Manager at Suite 2804, 28/F, Great Eagle Centre, 23 Harbour
  Road, Wanchai, Hong Kong during normal business hours until 12:00 noon on May 16, 2006, which is
  the date on which application lists close.

SUBSCRIPTION AGREEMENT
     On April 26, 2006, Great Eagle entered into a subscription agreement (the ‘‘Subscription
Agreement’’) with the Manager pursuant to which the Manager issued, at the direction of Great Eagle, an
aggregate of 1,508,490,809 Units as follows: 1,349,495,877 Units to GE Holder, 114,796,151 Units to KP
Holder and 44,198,781 Units to Wing Tai. The initial subscription price paid in respect of such Units was
HK$4.80 per Unit, making an aggregate subscription price of HK$7,240,755,883 (the ‘‘Initial Subscription
Price’’).
      In the event the Listing Date occurs on or before December 31, 2006 (or such later date as the parties
to the Subscription Agreement may agree in writing) and the Offer Price is greater than HK$4.80, the
subscription price for each of such Units shall be increased by an amount equal to the difference between
the Offer Price and the initial subscription price paid.
      The Initial Subscription Price was satisfied by the assignment to the Trustee, on behalf of Champion
REIT, of a promissory note issued by Alfida Limited, a wholly-owned subsidiary of Great Eagle, to GE
Holder on April 26, 2006 for an amount equal to the Initial Subscription Price (the ‘‘Subscription
Promissory Note’’). In the event of an adjustment to the Initial Subscription Price, the principal amount of
the Subscription Promissory Note will be increased to include the amount of such adjustment. The
Subscription Promissory Note does not bear any interest and shall be paid by Alfida Limited on the Listing
Date.

REORGANIZATION AGREEMENTS
      On April 26, 2006, the Trustee, as trustee of Champion REIT, entered into the Reorganization
Agreements with the relevant Vendor Companies pursuant to which the Trustee, on behalf of Champion
REIT, acquired from the relevant Vendor Companies the Holding Company Shares with the rights attaching
to them as at and from the Listing Date together with the rights to receive dividends and other distributions
relating to income derived from the period on and after the Listing Date. Completion of the Reorganization
took place on April 26, 2006.
      The Holding Companies together indirectly own the entire legal and beneficial interest in the Property.
Of the six Holding Companies acquired by the Trustee, on behalf of Champion REIT, pursuant to the
Reorganization, (a) four Holding Companies, being East Power Limited, Cojoin Properties Limited, Portion
A (BVI) Limited and Portion B (BVI) Limited, were indirect wholly-owned subsidiaries of Great Eagle; and
(b) two Holding Companies, being Fuscastus Limited and Harvest Star Limited, were indirectly owned by
Great Eagle (85.9%), Kerry Properties (10.2%) and Wing Tai (3.9%).

Initial Consideration
      The aggregate initial consideration paid by the Trustee, on behalf of Champion REIT and out of the
assets of Champion REIT, for the acquisition of the Holding Companies pursuant to the Reorganization
Agreements was HK$18,663,844,643 (the ‘‘Initial Consideration’’) and comprised (a) the consideration
for the Holding Company Shares (the ‘‘initial share consideration’’), which is subject to the adjustments as
described in the sub-section headed ‘‘Adjustments’’ below; and (b) the consideration for the assignment by

                                                    173
                     MATERIAL AGREEMENTS AND OTHER DOCUMENTS
                             RELATING TO CHAMPION REIT

each Vendor Company to the Trustee, on behalf of Champion REIT, of the amount owing by the relevant
Holding Company to such Vendor Company as of Completion on a dollar for dollar basis.
     The initial consideration paid in respect of the acquisition of each Holding Company was as follows:
     (     HK$13,266,101,208 in respect of the acquisition of Fuscastus Limited;
     (     HK$707,812,906 in respect of the acquisition of Harvest Star Limited;
     (     HK$729,131,106 in respect of the acquisition of East Power Limited;
     (     HK$299,006,880 in respect of the acquisition of Cojoin Properties Limited;
     (     HK$3,164,242,954 in respect of the acquisition of Portion A (BVI) Limited; and
     (     HK$497,549,589 in respect of the acquisition of Portion B (BVI) Limited.
       The initial share consideration paid in respect of the acquisition of each Holding Company was
determined based on the net asset value of that Holding Company and its subsidiaries as of the expected
listing date of May 24, 2006 (the ‘‘Expected Listing Date’’), after making certain adjustments (the
‘‘Adjusted Net Asset Value’’). These adjustments included adjusting the value of the relevant portion of the
Property owned by that Holding Company and its subsidiaries to an agreed value representing an agreed
discount to the Appraised Value of such relevant portion of the Property.
     Pursuant to the Reorganization Agreements, a pro forma completion balance sheet for each Holding
Company and its subsidiaries (the ‘‘Pro Forma Completion Balance Sheet’’) was prepared to determine
the Adjusted Net Asset Value as of the Expected Listing Date. The Pro Forma Completion Balance Sheet
was prepared on the basis of the figures set out in the unaudited consolidated completion management
accounts of the relevant Holding Company and its subsidiaries drawn up as of the Expected Listing Date,
subject to the adjustments referred to above.
     The Initial Consideration was satisfied by the issue of promissory notes by the Trustee, on behalf of
Champion REIT, to the relevant Vendor Companies (the ‘‘Purchaser Promissory Notes’’). The Purchaser
Promissory Notes do not bear any interest and shall be paid by the Trustee, on behalf of Champion REIT, on
the Listing Date.

Adjustments
  IPO Adjustment
      In the event the Listing Date occurs on or before December 31, 2006 (or such later date as the parties
to the Reorganization Agreements may agree in writing), the initial share consideration in respect of each
Holding Company will be subject to an adjustment calculated in the manner described below (the ‘‘IPO
Adjustment’’).
     The IPO Adjustment will be calculated as follows:
                                           A% × (B – C)
     where:
     (a)   ‘‘A’’ is the percentage specified in the relevant Reorganization Agreement, being (i) 71.10% in
           respect of the acquisition of Fuscastus Limited; (ii) 3.79% in respect of the acquisition of Harvest
           Star Limited; (iii) 3.90% in respect of the acquisition of East Power Limited; (iv) 1.60% in
           respect of the acquisition of Cojoin Properties Limited; (v) 16.95% in respect of the acquisition
           of Portion A (BVI) Limited and (vi) 2.66% in respect of the acquisition of Portion B
           (BVI) Limited;

                                                     174
                       MATERIAL AGREEMENTS AND OTHER DOCUMENTS
                               RELATING TO CHAMPION REIT

     (b)   ‘‘B’’ is the sum of:
           (i)     the gross proceeds from the issue of Units pursuant to the Global Offering net of
                   commissions payable to the Underwriters;
           (ii)    the gross amount drawn down by the Finance Company pursuant to the Facility on the
                   Listing Date; and
           (iii)   the principal amount of the Subscription Promissory Note; and
     (c)   ‘‘C’’ is the sum of:
           (i)     the Initial Consideration;
           (ii)    the aggregate upfront swap payments of the interest rate swaps entered into between each
                   of the New Property Companies and Merrill Lynch Capital Markets Bank Limited;
           (iii)   the front-end fees payable in respect of the Facility; and
           (iv)    HK$76.6 million, being the amount in respect of the costs and expenses of the Global
                   Offering agreed for the purposes of the calculation of the IPO Adjustment.
      Where the amount of the IPO Adjustment is a positive figure, such amount shall be paid by the
Trustee, on behalf of Champion REIT and out of the assets of Champion REIT, to the relevant Vendor
Company on the Listing Date. Where the amount of the IPO Adjustment is a negative figure, such amount
shall be offset against the principal amount of the Purchaser Promissory Note issued to the relevant Vendor
Company and the balance of the principal amount of such Purchaser Promissory Note shall be paid to the
relevant Vendor Company on the Listing Date.
      The main purpose of the IPO Adjustment is to ensure that the consideration for the acquisition of the
Holding Company Shares reflects the value of the Property implied by the Offer Price attributable to the
Holding Companies. The aggregate IPO Adjustment pursuant to the Reorganization Agreements is
calculated as follows:
                                                                         Based on the         Based on the
                                                                       Minimum Offer        Maximum Offer
                                                                       Price of HK$5.00     Price of HK$5.75
                                                                                   (HK$ millions)
Gross proceeds pursuant to the Global Offering net of
   commissions payable to the Underwriters *****************                  6,017                   6,919
Initial drawdown of the term loan under the Facility **********               7,000                   7,000
Subscription Promissory Note*****************************                     7,542                   8,674
Aggregate of Initial Consideration payable to Vendor Companies              (18,664)                (18,664)
Upfront swap payments**********************************                      (1,417)                 (1,417)
Front-end fees payable in respect of the Facility**************                 (36)                    (36)
Cost and expenses of the Global Offering *******************                    (77)                    (77)
IPO Adjustment ****************************************                         366                   2,400

  Post-Completion Adjustment
      Pursuant to the Reorganization Agreements, an audit of the accounts and a review of the Pro Forma
Completion Balance Sheet of each Holding Company and its subsidiaries will be conducted by the auditors
of the relevant Holding Company and its subsidiaries within 90 days after the Listing Date. An adjustment
payment (the ‘‘Post-Completion Adjustment’’) is to be made by or to the relevant Vendor Company to
address any overstatement or understatement, as the case may be, of the current assets/current liabilities and

                                                      175
                      MATERIAL AGREEMENTS AND OTHER DOCUMENTS
                              RELATING TO CHAMPION REIT

of the cash balance and deposit at bank of the relevant Holding Company and its subsidiaries as of the
Listing Date as shown in the relevant Pro Forma Completion Balance Sheet. The amount of the Post-
Completion Adjustment shall be paid by the Trustee, on behalf of Champion REIT and out of the assets of
Champion REIT, or the relevant Vendor Company, as the case may be, within 14 days of the receipt of the
adjustment statement issued by the auditors of the relevant Holding Company and its subsidiaries.

Final Consideration
      The final consideration for the acquisition of the Holding Companies shall be announced by the
Manager upon the determination of the adjustments described above together with the quantum of the
adjustment amounts.

Representations and Warranties
      Each Reorganization Agreement contains certain representations and warranties made by the relevant
Vendor Company in respect of, among others, the relevant Holding Company and its subsidiaries and the
relevant portion of the Property owned by the Holding Company.
     Each Reorganization Agreement also sets out limitations on the liability of the relevant Vendor
Company in respect of any breach of warranties, including provisions for aggregate maximum liability,
minimum threshold for claims and a limitation period of 24 months from the Listing Date for all claims.

Guarantee of Relevant Vendor Company’s Obligations
     Great Eagle has guaranteed the relevant Vendor Company’s obligations pursuant to the East Power
Reorganization Agreement, the Cojoin Properties Reorganization Agreement, the Portion A
(BVI) Reorganization Agreement and the Portion B (BVI) Reorganization Agreement.
      Great Eagle, Kerry Properties and Wing Tai (together with Great Eagle as guarantor for Wing Tai)
have severally guaranteed, in proportion to their respective indirect shareholding interest in Fuscastus
Limited and Harvest Star Limited immediately prior to Completion, the relevant Vendor Companies’
obligations under the Fuscastus Reorganization Agreement and the Harvest Star Reorganization Agreement.

DEEDS OF TAX COVENANT
      On April 26, 2006, the Trustee, as trustee of Champion REIT, and each relevant Holding Company
and its subsidiaries entered into a separate Deed of Tax Covenant with the relevant Vendor Company and the
relevant guarantor(s). Pursuant to the Deeds of Tax Covenant, each relevant Vendor Company covenanted to
indemnify the Trustee and the relevant Holding Company and its subsidiaries in respect of:
     (a)   any liability for tax resulting from or by reference to any event occurring on or before the Listing
           Date or in respect of any gross receipts, income, profits or gains earned, accrued or received by
           the relevant Holding Company or its subsidiaries on or before the Listing Date (including, for the
           avoidance of doubt, any profits tax arising from the sale of the Property by the Predecessor
           Property Companies to the New Property Companies), except that (i) the relevant Vendor
           Company shall not be responsible for any stamp duty payable in connection with the relevant
           Property Sale and Purchase Agreement in respect of the relevant portion of the Property or on the
           assignment of the relevant portion of the Property pursuant to such Property Sale and Purchase
           Agreement; and (ii) it is acknowledged that in determining the consideration for the acquisition
           of the relevant Holding Company Shares, the provision made for stamp duty in relation to the
           sale of the Property by the Predecessor Property Companies to the New Property Companies
           shall not be taken into account; and

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     (b)   all reasonable out-of-pocket costs and expenses properly incurred and payable by the Trustee or
           the relevant Holding Company or its subsidiaries in connection with a successful claim pursuant
           to the relevant Deed of Tax Covenant.
      The limitation period for claims under paragraph (a) or (b) above is seven years from the Listing Date.
The right of the Trustee and the relevant Holding Company and its subsidiaries to be indemnified pursuant
to the relevant Deed of Tax Covenant is not prejudiced by any tax action or proceeding in respect of the
relevant tax liability which is the subject matter of the claim not being finally resolved before the expiry of
the applicable limitation period.
     Great Eagle has guaranteed the relevant Vendor Company’s obligations under the Deeds of Tax
Covenant relating to the acquisition of East Power Limited, Cojoin Properties Limited, Portion A
(BVI) Limited and Portion B (BVI) Limited.
      Great Eagle, Kerry Properties and Wing Tai (together with Great Eagle as guarantor for Wing Tai)
have severally guaranteed, in proportion to their respective indirect shareholding interest in Fuscastus
Limited and Harvest Star Limited immediately prior to Completion, the relevant Vendor Company’s
obligations under the Deeds of Tax Covenant relating to the acquisition of Fuscastus Limited and the
Harvest Star Limited.

PROPERTY SALE AND PURCHASE AGREEMENTS
      Immediately following the completion of the Reorganization, the Predecessor Property Companies
entered into the Property Sale and Purchase Agreements with the New Property Companies pursuant to
which each New Property Company agreed to acquire the entire portion of the Property owned by the
relevant Predecessor Property Company. The Property Sale and Purchase Agreements are conditional upon
the listing of Champion REIT on the Hong Kong Stock Exchange on or before December 31, 2006.
     The consideration payable by the New Property Companies pursuant to the Property Sale and
Purchase Agreements is as follows:
     (     HK$16,117,000,000 in respect of the portion of the Property owned by Shine Hill Development
           Limited, being the Appraised Value of such portion of the Property;
     (     HK$860,000,000 in respect of the portion of the Property owned by Maple Court Limited, being
           the Appraised Value of such portion of the Property;
     (     HK$885,000,000 in respect of the portion of the Property owned by Panhy Limited, being the
           Appraised Value of such portion of the Property;
     (     HK$363,000,000 in respect of the portion of the Property owned by Well Charm Development
           Limited, being the Appraised Value of such portion of the Property;
     (     HK$3,841,000,000 in respect of the portion of the Property owned by CP (Portion A) Limited,
           being the Appraised Value of such portion of the Property; and
     (     HK$604,000,000 in respect of the portion of the Property owned by CP (Portion B) Limited,
           being the Appraised Value of such portion of the Property.
     Upon the Property Sale and Purchase Agreements becoming unconditional, the consideration will be
paid by the New Property Companies to the Predecessor Property Companies on the Listing Date.
      Legal assignment of the relevant portion of the Property will take place on the earlier of: (a) such date
as may be notified by the relevant New Property Company to the relevant Predecessor Property Company by
not less than 14 clear days’ notice in writing; and (b) the 10th anniversary of the date of the relevant
Property Sale and Purchase Agreement. Based on tax advice obtained by the Manager from leading counsel,

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                     MATERIAL AGREEMENTS AND OTHER DOCUMENTS
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the Property Sale and Purchase Agreements will not be chargeable with Hong Kong ad valorem stamp duty
under the Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong). Such stamp duty will only be
payable on the legal assignment of the Property to the New Property Companies at the then prevailing Hong
Kong ad valorem stamp duty rate.

DPU GUARANTEE DEED
      On April 26, 2006, GE Holder entered into a deed of guarantee (the ‘‘DPU Guarantee Deed’’) with
the Trustee, as trustee of Champion REIT, and the Manager. Pursuant to the DPU Guarantee Deed,
GE Holder has guaranteed that the DPU for the FY06 Distribution Period which each Public Unitholder
would receive (the ‘‘Actual FY06 DPU’’) will not be less than HK$0.1694 per Unit (the ‘‘Guaranteed
FY06 DPU’’). The Actual FY06 DPU is determined after taking into account the Distribution Waiver by the
Relevant Holders for the FY06 Distribution Period with respect to all of the Units the Relevant Holders hold
as of the Listing Date (the ‘‘Initial Units Held’’) pursuant to the Distribution Entitlement Waiver Deed. See
the sub-section headed ‘‘Distribution Entitlement Waiver Deed’’ below for further details.
      In the event that the DPU for the FY06 Distribution Period, after taking into account the Distribution
Waiver, (the ‘‘Pre-Guarantee FY06 DPU’’) is less than the Guaranteed FY06 DPU, GE Holder will make a
one-time cash payment (the ‘‘FY06 Guarantee Payment’’) to the Trustee for the benefit of Champion
REIT in an amount equal to the product of (a) the difference between the Guaranteed FY06 DPU and the
Pre-Guarantee FY06 DPU; and (b) the difference between the number of Units outstanding as of the Record
Date for the FY06 Distribution Period and the Initial Units Held.
    The Manager will arrange for Champion REIT’s external auditors to conduct a review of the
Manager’s calculation of the amount of the Pre-Guarantee FY06 DPU and, if applicable, the amount of the
FY06 Guarantee Payment as soon as practicable after the finalization of the audited financial statements of
Champion REIT for the year ending December 31, 2006.
     The Manager has undertaken to include the amount of the FY06 Guarantee Payment, if any, received
by the Trustee pursuant to the DPU Guarantee Deed in the determination of the amount of distributions to
the Public Unitholders for the FY06 Distribution Period.
      The Manager has further undertaken to GE Holder that (a) there will only be one distribution period
during the 2006 financial year, being the FY06 Distribution Period; and (b) it shall not effect, without the
prior written consent of GE Holder during the FY06 Distribution Period, (i) any sale or disposal of any of
the real estate held by Champion REIT or (ii) any sub-division or consolidation of the Units.
      The DPU Guarantee Deed will automatically terminate upon the occurrence of any of the following
events: (a) if the Listing Date does not occur on or before December 31, 2006 (or such later date as the
parties to the DPU Guarantee Deed (other than the Trustee) may agree in writing); (b) if certain provisions
of the Trust Deed relating to the calculation of distributions by Champion REIT are amended in any
material respect without the prior written consent of GE Holder or (c) if there is a material breach by the
Manager of its undertakings referred to above.
     Great Eagle has guaranteed the payment obligations of GE Holder pursuant to the DPU Guarantee
Deed.

DISTRIBUTION ENTITLEMENT WAIVER DEED
       On April 26, 2006, the Relevant Holders entered into a distribution entitlement waiver deed
(the ‘‘Distribution Entitlement Waiver Deed’’) with the Trustee, as trustee of Champion REIT, and the
Manager. Pursuant to the Distribution Entitlement Waiver Deed, each Relevant Holder waived its
entitlement to receive any distributions payable (a) for the FY06 Distribution Period with respect to all of
the Units it holds as of the Listing Date; (b) for the FY07 Distribution Periods with respect to 55% of the

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                     MATERIAL AGREEMENTS AND OTHER DOCUMENTS
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Units it holds as of the Listing Date; and (c) for the FY08 Distribution Periods with respect to 20% of the
Units it holds as of the Listing Date.

     As of the Listing Date, the Relevant Holders will hold an aggregate of 1,508,490,809 Units and each
Relevant Holder will hold the following number of Units: GE Holder (1,349,495,877 Units), KP Holder
(114,796,151 Units) and Wing Tai (44,198,781 Units).

      In the event any Relevant Holder holds less than the number of Units in respect of which the above
waiver applies as of the relevant Record Date, that Relevant Holder will make a one-time cash payment
(the ‘‘Top-Up Payment’’) to the Trustee for the benefit of Champion REIT in an amount equal to:

     (a)   (in respect of FY06 Distribution Period) the product of (i) the Relevant FY06 DPU; and (ii) the
           difference between the number of Units held by that Relevant Holder as of the Listing Date and
           as of the Record Date for the FY06 Distribution Period;

     (b)   (in respect of the FY07 Distribution Periods) the product of (i) the Relevant FY07 DPU; and
           (ii) the difference between (A) 55% of the number of Units held by that Relevant Holder as of
           the Listing Date; and (B) the number of Units held by that Relevant Holder as of the relevant
           Record Date; and

     (c)   (in respect of the FY08 Distribution Periods) the product of (i) the Relevant FY08 DPU; and
           (ii) the difference between (A) 20% of the number of Units held by that Relevant Holder as of the
           Listing Date and (B) the number of Units held by that Relevant Holder as of the relevant Record
           Date.

      The ‘‘Relevant FY06 DPU’’ is the higher of the Pre-Guarantee FY06 DPU and the Guaranteed FY06
DPU. The ‘‘Relevant FY07 DPU’’ is the DPU for the Interim FY07 Distribution Period or the Final FY07
Distribution Period, as the case may be, determined after taking into account the waiver by the Relevant
Holders of their entitlement to receive any distributions for the Interim FY07 Distribution Period or the
Final FY07 Distribution Period, as the case may be, in respect of 55% of the Units held by them as of the
Listing Date referred to above. The ‘‘Relevant FY08 DPU’’ is the DPU for the Interim FY08 Distribution
Period or the Final FY08 Distribution Period, as the case may be, determined after taking into account the
waiver by the Relevant Holders of their entitlement to receive any distributions for the Interim FY08
Distribution Period or the Final FY08 Distribution Period, as the case may be, in respect of 20% of the Units
held by them as of the Listing Date referred to above.

      The Manager will arrange for Champion REIT’s external auditors to conduct a review of the
Manager’s calculation of the amount of the Relevant FY06 DPU, the Relevant FY07 DPU, the Relevant
FY08 DPU and, if applicable, the amount of the Top-Up Payment due from the Relevant Holders as soon as
practicable (a) (in respect of the FY06 Distribution Period, the Final FY07 Distribution Period or the Final
FY08 Distribution Period) after the finalization of the audited financial statements of Champion REIT for
the year ending December 31, 2006, December 31, 2007 or December 31, 2008, as the case may be; and
(b) (in respect of the Interim FY07 Distribution Period or the Interim FY08 Distribution Period) after the
preparation of the interim unaudited financial statements of Champion REIT for the Interim FY07
Distribution Period or the Interim FY08 Distribution Period, as the case may be.

      The Manager has undertaken to include the amount of the relevant Top-Up Payments, if any, received
by the Trustee for the benefit of Champion REIT pursuant to the Distribution Entitlement Waiver Deed in
the determination of the amount of distributions to (a) the Unitholders (other than the Relevant Holders) for
the FY06 Distribution Period; and (b) the Unitholders (including the Relevant Holders but only to the extent
of the Units held by them to which the Distribution Waiver does not apply) for the FY07 Distribution
Periods and the FY08 Distribution Periods.

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                     MATERIAL AGREEMENTS AND OTHER DOCUMENTS
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      The Manager has further undertaken to the Relevant Holders that (a) there will only be one
distribution period during the 2006 financial year, being the FY06 Distribution Period and only two
distribution periods during each of the 2007 and 2008 financial years, being the FY07 Distribution Periods
and FY08 Distribution Periods, respectively; and (b) it shall not effect, without the prior written consent of
the Relevant Holders during the FY06 Distribution Period, the FY07 Distribution Periods and the FY08
Distribution Periods, (i) any sale or disposal of any of the real estate held by Champion REIT or (ii) any
sub-division or consolidation of Units.
      The Distribution Entitlement Waiver Deed will automatically terminate upon the occurrence of any of
the following events: (a) if the Listing Date does not occur on or before December 31, 2006 (or such later
date as the parties to the Distribution Entitlement Waiver Deed (other than the Trustee) may agree in
writing), (b) if certain provisions of the Trust Deed relating to the calculation of distributions by Champion
REIT are amended in any material respect without the prior written consent of the Relevant Holders or (c) if
there is a material breach by the Manager of its undertakings referred to above.
      Under the Distribution Entitlement Waiver Deed, Great Eagle has guaranteed the payment obligations
of GE Holder and Wing Tai, and Kerry Properties has guaranteed the payment obligations of KP Holder.
Wing Tai has agreed to indemnify Great Eagle in respect of Great Eagle’s guarantee of Wing Tai’s
obligations under the Distribution Entitlement Waiver Deed.

INFORMATION REGARDING THE LEASEHOLD TITLE TO THE PROPERTY
Government Grants
     Land ownership in Hong Kong is held by way of long-term leases or conditions of grant, as the case
may be, granted by the Government. The Property is held under a Government Grant which contains terms
and conditions ordinarily found in grants or leases granted by the Government. For example, the leases
contain provisions requiring the lessee:
     (    to develop or redevelop the land in compliance with the buildings and town planning legislation
          and regulations;
     (    to use the land and buildings erected on the land for the permitted use;
     (    to maintain all buildings erected on the land in good and substantial repair and condition;
     (    to maintain and repair any slopes, retaining walls, supports, foundations or other structures
          whether on the land or on adjoining land and in accordance with the relevant guidelines issued
          from time to time by the relevant government authorities;
     (    to pay the yearly government rent and discharge all taxes, rates, charges and assessments imposed
          on the land; and
     (    not to encroach upon or occupy any adjoining Government land.
     The Government has a right to terminate the lease and re-enter the land in the event the lessee fails to
observe or perform the terms and conditions of the Government Grant.
     The following is a description of the Government Grant for the Property.
      The Property is held from the Government for the residue of the term of years from August 3, 1989
until June 30, 2047 under a Government Lease of Inland Lot No. 8888 deemed to have been issued under
and by virtue of Section 14(3) of the Conveyancing and Property Ordinance (Chapter 219 of the Laws of
Hong Kong) upon compliance with the conditions precedent contained in Conditions of Sale dated
August 3, 1989 in respect of Inland Lot No. 8888 and made between Shine Hill Development Limited of the
one part and the Governor of Hong Kong of the other part and registered in the Land Registry as Conditions

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of Sale No. 12063, as varied and modified by three Modification Letters respectively registered in the Land
Registry by (a) Memorial Nos. UB4596900, UB5211008 and UB5261559; (b) a Deed of Dedication
registered in the Land Registry by Memorial No. UB5243536 and (c) a No-Objection Letter registered in
the Land Registry by Memorial No. UB5863821 (such compliance being evidenced by a Certificate of
Compliance dated November 9, 1992 and registered in the Land Registry by Memorial No. UB5487289).

Deeds of Mutual Covenant
     In Hong Kong, it is common for a number of owners to own collectively both the parcel of land and
the building(s) on it. The land and building(s) are held by the co-owners as tenants in common in shares
which usually bear some relationship to the size of the individual units held by the various owners within
the building(s).
      In Hong Kong, the relationship between the co-owners is governed by a document called a deed of
mutual covenant (or an instrument of a similar nature), which is an agreement between the co-owners to
regulate their co-ownership of the land and building(s) and to provide for the building’s effective
maintenance and management. A deed of mutual covenant notionally divides the land and building(s) into a
number of undivided shares. Some deeds of mutual covenant also provide for management shares to be
allocated to each unit for the purpose of calculating a co-owner’s contribution to management expenses.
Under a deed of mutual covenant, each co-owner is allocated a number of shares which entitle that owner to
exclusive use and occupation of the owner’s unit(s) to the exclusion of other co-owners and gives each
co-owner certain rights and obligations in relation to the use, maintenance and repair of the common parts
and facilities of the building(s) to which each co-owner is bound to contribute a proportionate share of the
associated costs and expenses by reference to the undivided shares or management shares allocated to its
unit. Most deeds of mutual covenant also require a co-owner to pay management fee deposits and make
contributions to the management funds before taking possession of its unit and provides for the formation of
an owners’ committee to speak for the individual owners in all relations between the owners and the
manager and to make such decisions as reappointment of the manager, approval of annual budgets and
approval of house rules. The deed of mutual covenant usually binds the manager and all the owners of a
development and their successors-in-title, regardless of whether they are original parties to the deed of
mutual covenant and amendment to the deed of mutual covenant requires the consent of all the existing co-
owners and their respective mortgagees.
     The DMC for Citibank Plaza comprises the following documents:
     (a)   The deed of mutual grant and mutual covenant and management agreement, dated November 23,
           1992, was made between Shine Hill Development Limited, Shine Duty Limited (now known as
           CP (Portion A) Limited), Shine Belt Limited (now known as CP (Portion B) Limited), Fair Page
           Limited, Panhy Limited, Maple Court Limited, Longworth Management Limited and Citicorp
           International Limited and registered in the Land Registry by Memorial No. UB5511011 and re-
           registered by Memorial No. UB5947750. Longworth Management Limited is 100% owned by
           Great Eagle. See the section headed ‘‘Connected Party Transactions’’ in this Offering Circular for
           further details.
     (b)   The supplemental deed of mutual grant, dated December 22, 1994, was made between Shine Hill
           Development Limited, Shine Belt Limited (now known as CP (Portion B) Limited), Fair Page
           Limited, Panhy Limited, Maple Court Limited and Citicorp International Limited and registered
           in the Land Registry by Memorial No. UB6205748.
     (c)   The second supplemental deed of mutual grant, dated March 1, 1995, was made between Shine
           Hill Development Limited, Shine Belt Limited (now known as CP (Portion B) Limited), Fair
           Page Limited, Maple Court Limited and Citicorp International Limited and registered in the Land
           Registry by Memorial No. UB6252028.

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                     MATERIAL AGREEMENTS AND OTHER DOCUMENTS
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     (d)   The third supplemental deed of mutual grant, dated March 16, 1995, was made between Shine
           Hill Development Limited and Maple Court Limited and registered in the Land Registry by
           Memorial No. UB6254168.

     (e)   The supplemental deed of mutual covenant and management agreement, dated July 25, 1996,
           was made between Shine Hill Development Limited, Citiproperties (Hong Kong) Limited
           (formerly known as Shine Duty Limited and now known as CP (Portion A) Limited), Citirealty
           (Hong Kong) Limited (formerly known as Shine Belt Limited and now known as CP (Portion B)
           Limited)), Fair Page Limited, Panhy Limited, Maple Court Limited, The Financial Secretary
           Incorporated, Longworth Management Limited and Citicorp International Limited and registered
           in the Land Registry by Memorial No. UB6947946.

      The purpose of the deed of mutual covenant is to make provisions for the maintenance, management,
repair, renovation, insurance and service of the building and the common areas and facilities thereof, to
define and regulate the rights, interests and obligations of the owners and to provide for a due proportion of
the relevant expenses to be borne by the owners.

      As the deed of mutual covenant binds all owners of undivided shares of and in the building, the
Property Companies, as owners of the building, are bound by the deed of mutual covenant, although some
of them may not be party to it.

PROPERTY MANAGEMENT AGREEMENT

      The Property, which comprises the initial portfolio of Champion REIT, and any subsequent properties
located in Hong Kong, whether directly or indirectly acquired or wholly or partly owned by Champion
REIT, will be managed by the Property Manager pursuant to the Property Management Agreement.

     The Property Management Agreement was entered into on April 26, 2006 by the Manager and the
Property Manager pursuant to which the Property Manager was appointed to manage, supervise, maintain
and market all the properties of Champion REIT located in Hong Kong on an exclusive basis, subject to the
overall management and supervision of the Manager.

      On April 26, 2006, each New Property Company entered into a deed of ratification and accession in
favor of the Manager and the Property Manager confirming that it will be bound by the provisions of the
Property Management Agreement.

     The initial term of appointment of the Property Manager is three years from the Listing Date.

      Six months prior to the expiry of the initial three year term, the Property Manager may request for an
extension of its appointment for a further term to be agreed between the Manager and the Property Manager
on the same terms and conditions, except for the revision of all fees payable to the Property Manager to the
prevailing market rates. The Manager will agree to extend the appointment of the Property Manager for the
extension term on the revised fees based on the prevailing market rates determined as set out below,
provided that such extension shall be subject to the approval of the Unitholders if such approval is required
pursuant to the Trust Deed or any applicable regulatory requirements relating to connected party
transactions relating to real estate investment trusts.

      The Manager will decide the prevailing market rates for the extension term and if the Property
Manager disagrees with the Manager’s decision on the prevailing market rates for the extension term, the
dispute will be referred to an independent expert whose determination of the prevailing market rates will be
final and binding on the parties.

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Property Manager’s Services
      The services provided by the Property Manager for each property under its management include the            B4(c)
following:
     (     Property management services. These services include co-ordinating tenants’ fitting out
           requirements, recommending third party contracts for the provision of property management
           services, maintenance services, supervising the performance of service providers and contractors,
           arranging for adequate insurance and ensuring compliance with building and safety regulations.
     (     Lease management services. These services include the administration of rental collection,
           management of rental arrears, initiating lease renewals and negotiations of terms with tenants to
           conclude the renewal.
     (     Marketing services. These services include the provision of marketing and marketing co-
           ordination services.
      In addition, the Property Manager will co-ordinate with the relevant service providers under all
existing contracts entered into by or on behalf of the relevant Property Company as of the Listing Date, in
relation to the provision of services for the relevant portion of the Property, and use reasonable endeavors to
arrange for the (a) termination; (b) continuation on the same terms as those existing as of the Listing Date;
or (c) replacement on such terms as the Manager may agree with the relevant service providers, to ensure
continuity in the provision of such services to the relevant Property Company after the Listing Date. Under
the Property Management Agreement, the Property Manager must at all times ensure that it will provide
adequate resources at both the managerial and operational levels for the management of the properties of
Champion REIT in Hong Kong.

Property Manager’s Fees                                                                                           B14(b)
                                                                                                                  9.10
      Under the Property Management Agreement (which has been ratified and acceded to by each New
Property Company), the Property Manager will be entitled to receive from each New Property Company the
following fees in relation to the management, supervision, maintenance and marketing of the relevant
portion of the Property owned by that New Property Company.

     (a)   Property and Lease Management Services
          For property and lease management services, each New Property Company will pay the Property
     Manager a fee of 3.0% per annum of the Gross Property Revenue of the relevant portion of the
     Property owned by the relevant New Property Company.

     (b)   Marketing Services
           For marketing services which will be provided by the Property Manager each Property Company
     will pay the Property Manager the following commission:
           (    a commission equivalent to one month’s base rent, for securing a tenancy of three years or
                more;
           (    a commission equivalent to one-half month’s base rent, for securing a tenancy of less than
                three years;
           (    a commission equivalent to one-half month’s base rent, for securing a renewal of tenancy
                irrespective of the duration of the renewal term; and
           (    a commission equivalent to 10.0% of the total licence fee for securing a licence for a
                duration of less than 12 months.

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                     MATERIAL AGREEMENTS AND OTHER DOCUMENTS
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          If the tenancy, renewal of tenancy or licence is secured by a third party agent, the Property
     Manager will not be entitled to receive any of the above commissions. The New Property Companies
     can use the services of either the Property Manager or third party leasing agents.

Certain Operating Expenses
     In addition to its fees, the Property Manager will be fully reimbursed by the relevant Property
Company for the employment costs and remuneration relating to the employees of the Property Manager
engaged solely and exclusively for the operation of the parking facilities of the Property.

Expenses
      At the election of the Property Manager, (a) a New Property Company designated by the Property
Manager will open and maintain in its name a master operating account for the Property or (b) each New
Property Company will open and maintain in its name an operating account for the portion of the Property
owned by it. The Property Manager is authorized to utilize funds deposited in the master operating account
or the operating account, as the case may be, to make payment of all costs and expenses incurred in the
management, supervision, maintenance and marketing of the portion of the Property owned by the relevant
New Property Company, within each annual budget approved by the Manager and by the board of directors
of the relevant New Property Company.

Termination
      The Manager may terminate the appointment of the Property Manager in relation to all properties
under its management or the relevant New Property Company may terminate the appointment of the
Property Manager in relation to a property under its management, in each case on the occurrence of certain
specified events, which include the liquidation or cessation of business of the Property Manager. The
Manager or the relevant New Property Company may also terminate the appointment of the Property
Manager specifically in relation to a property under its management (a) in the event of the sale of such
property; or (b) if the Property Manager after receipt of written notice fails (within cure periods, where
applicable) to remedy any breach of its obligations in relation to such property.
      The Manager may also terminate the appointment of the Property Manager (a) in relation to a property
under its management in the event of the sale of the property company which owns such property; (b) in
relation to all or part of the properties under its management in the event the Property Manager has
materially and/or persistently underperformed its obligations; or (c) if there is a change in the ownership or
control, direct or indirect, of shares carrying 50% or more of the voting rights attached to the issued share
capital of the Property Manager, except within the group of companies of which the Property Manager is a
member.

Novation/Assignment
      The Manager is entitled to novate all its rights, benefits and obligations under the Property
Management Agreement to a new manager of Champion REIT appointed pursuant to the terms of the
Trust Deed.
     The Property Manager may, with the prior written consent of the Manager, novate all its rights,
benefits and obligations under the Property Management Agreement to any wholly-owned, direct or indirect
subsidiary of Great Eagle which is able to provide the services required of it under the Property
Management Agreement on an exclusive basis and which can meet all the requirements under the Property
Management Agreement, especially those on the expertise, resources and experience of personnel of the
Property Manager.

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      A New Property Company may assign all its rights, benefits and obligations under the Property
Management Agreement by way of security to any banks or financial institutions in connection with any
debt financing transactions entered into or to be entered into by the relevant New Property Company or any
wholly-owned, direct or indirect subsidiary of Champion REIT.

Indemnity

      Each party to the Property Management Agreement, including each New Property Company which
has executed a deed of ratification and accession, (the ‘‘Indemnifying Party’’) shall indemnify each of the
other parties (the ‘‘Indemnified Party’’) from and against any and all actions, proceedings, liabilities,
claims, demands, losses, damages, charges, costs and expenses that the Indemnified Party suffers or incurs,
to the extent that they arise out of any breach, negligence, fraud or misconduct of the Indemnifying Party, its
employees or agents, in the performance of the Indemnifying Party’s obligations and duties under the
Property Management Agreement.

Exclusion of Liability

      In the absence of fraud, negligence, wilful default or breach of the Property Management Agreement
by the Property Manager, it shall not incur any liability by reason of any error of judgement or any matter or
thing done or suffered or omitted to be done by it in good faith under the Property Management Agreement.

UNDERWRITING AGREEMENTS

     The Hong Kong Underwriting Agreement was entered into on April 27, 2006 and the International
Underwriting Agreement is expected to be entered into on or prior to the Price Determination Date. For a
summary of the key terms and provisions of the Hong Kong Underwriting Agreement, see the section
headed ‘‘Underwriting’’ in this Offering Circular.

THE FACILITY

       The Manager has put in place the Facility as part of the financing of the acquisition of the Holding
Company Shares pursuant to the Reorganization. The Facility will be in the principal amount of HK$7,200
million from a group of banks, including Bank of China (Hong Kong) Limited, The Bank of East Asia,
Limited, Citigroup Global Markets Asia Limited, The Hongkong and Shanghai Banking Corporation
Limited, Hang Seng Bank Limited, Industrial and Commercial Bank of China (Asia) Limited, J.P. Morgan
Securities (Asia Pacific) Limited and Sumitomo Mitsui Banking Corporation, acting as mandated
coordinating arrangers. The Facility Agreement, which was entered into on April 26, 2006, comprises a
HK$7,000 million term loan facility, to be drawn down on the Listing Date, and a HK$200 million
revolving credit facility which will remain undrawn as of the Listing Date. Hang Seng Bank Limited will act
as facility agent under the term loan and revolving credit facility. The term loan and the revolving credit
facility are required to be repaid on a date which is five years from the Listing Date.

     The proceeds of the term loan will be used to partially finance the acquisition of the Holding
Company Shares pursuant to the Reorganization. The revolving credit facility will be used to finance the
operating expenses and capital expenditures in relation to the Property.

      Each loan under the Facility will bear interest at HIBOR plus a margin. The all-in cost of the Facility
will be no more than HIBOR plus 63 basis points per annum. In addition, the revolving credit facility will
be subject to a commitment fee of 15 basis points per annum on the daily undrawn amount commencing
from the earlier of (a) 30 days from the date of the Facility Agreement and (b) the date of listing of
Champion REIT on the Hong Kong Stock Exchange.

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                      MATERIAL AGREEMENTS AND OTHER DOCUMENTS
                              RELATING TO CHAMPION REIT

      The availability of the term loan and revolving credit facility on the Listing Date is conditional on
certain conditions precedent being satisfied. Such conditions include, without limitation, the provision of
executed copies of the Trust Deed, the Property Management Agreement, the Reorganization Agreements
and other material contracts entered into by each of Champion REIT, the Property Companies and the
Finance Company.

The Term Loan
      The Finance Company may prepay all or any part of the term loan on any interest payment date, on
not less than 14 days prior written notice to the lenders, if they also pay all accrued interest and all amounts
due and payable under the Facility Agreement. For a partial prepayment, the prepayment must be in an
amount not less than HK$50 million and in integral multiples of HK$5 million. The term loan may become
mandatorily repayable in the event it is or becomes illegal in any applicable jurisdiction or in the case of an
event of default.

Revolving Credit Facility
      The Finance Company is permitted under the revolving credit facility to repay and reborrow against its
available limit during the term of the revolving credit facility. The revolving credit facility is available to be
drawn down until one month prior to the final maturity date of the Facility. The Finance Company may
cancel the undrawn amount of the revolving credit facility. The revolving credit facility may also become
prepayable in the event it is or becomes illegal in any applicable jurisdiction or in the case of an event of
default.

Events of Default
      The Facility Agreement contains customary events of default, the occurrence of which would allow
the facility agent, upon the instructions of the majority lenders to demand immediate repayment of the
outstanding advances made under the term loan and the revolving credit facility, together with accrued
interest, fees and other sums, and cancel the lenders’ commitments under the revolving credit facility. Such
events include:
      (    the failure to pay any sum payable under the Facility Agreement when due or otherwise in
           accordance with the provisions thereof;
      (    the failure of Champion REIT, the Property Companies, the Finance Company, CP Finance
           (BVI) Limited or the Holding Companies to duly and punctually perform or comply with any of
           its obligations or undertakings under the Facility Agreement and, in case of non-monetary failure
           which in the opinion of the facility agent is capable of remedy, being unable to remedy such
           failure to the facility agent’s satisfaction with 21 days after receipt of written notice from the
           agent requiring it to do so;
      (    a breach of any of the representations or warranties made in the Facility Agreement;
      (    a default or acceleration in any other indebtedness owed by any of Champion REIT, the Property
           Companies, the Finance Company, CP Finance (BVI) Limited or the Holding Companies;
      (    the enforcement of any encumbrance, guarantee or other security created by the Finance
           Company, Champion REIT, the Property Companies, the Holding Companies, CP Finance (BVI)
           Limited or any other subsidiaries of Champion REIT;
      (    the failure to be granted any of the authorizations required from any governmental or other
           authority or from any shareholders or creditors of the Finance Company, Champion REIT, the
           Property Companies, CP Finance (BVI) Limited and the Holding Companies for and in

                                                       186
               MATERIAL AGREEMENTS AND OTHER DOCUMENTS
                       RELATING TO CHAMPION REIT

    connection with the Facility Agreement and the entering into of the Trust Deed or such
    authorizations ceasing to be in full force and effect or being modified in a manner which might
    materially and adversely affect the ability of any of them to perform its obligations under the
    Facility Agreement;
(   a creditor taking possession of all or any part of the business or assets of the Finance Company or
    the Property Companies or any execution or other legal process being enforced against the
    business or any asset of the Finance Company or the Property Companies and being not
    discharged within seven days or the Finance Company or the Property Companies failing to make
    payment in accordance with any final judgement or court order against it;
(   the insolvency, winding-up, administration, reorganization, reconstruction, dissolution or
    bankruptcy of any of Champion REIT, the Property Companies, the Finance Company,
    CP Finance (BVI) Limited or the Holding Companies;
(   any of Champion REIT, the Property Companies, the Finance Company, CP Finance (BVI)
    Limited or the Holding Companies ceasing or threatening to cease to carry on business or any
    substantial part thereof or changing or threatening to change the nature or scope of their business
    or disposing of or threatening to dispose of, or any governmental or other authority expropriating
    or threatening to expropriate, all or any substantial part of its business or assets;
(   the Facility Agreement or any provision thereof ceasing for any reason to be in full force and
    effect or being terminated or jeopardised or becoming invalid or unenforceable or there being any
    dispute regarding the same or there being any purported termination or repudiation of the same or
    it becoming impossible or unlawful for the Finance Company or any party thereto to perform any
    of its respective obligations thereunder or for any lender or the agent to exercise all or any of its
    rights, powers and remedies thereunder or any undertaking being not enforceable and the Finance
    Company failing to do, or failing to refrain from doing, the activity which it purported to
    undertake to do or, as the case my be, not to do;
(   the Government or any other competent authority re-entering or threatening to re-enter and take
    back possession of all or any part of the Property or the term for which the Property is held from
    the Government being reduced or terminated or all or any part of the Property being made subject
    to a compulsory purchase or similar order or all or a material part of the Property being destroyed
    or rendered unfit for occupation or unsuitable for its intended use and in such case, is not fully
    and adequately compensated or insured against;
(   (subsequent to listing of the Units) the listing of the Units on the Hong Kong Stock Exchange
    (i) being suspended for 14 or more consecutive days (or such longer period as agreed by the
    majority lenders, such agreement not to be unreasonably withheld) or (ii) being cancelled or
    otherwise ceasing other than for suspension for the purpose of voluntary reorganization;
(   any situation occurring which in the opinion of the majority lenders gives reasonable grounds to
    believe that a material adverse change in the business or financial condition or prospects of any of
    Champion REIT, the Finance Company, the Property Companies, CP Finance (BVI) Limited or
    the Holding Companies has occurred or that the ability any of Champion REIT, the Finance
    Company, the Property Companies, CP Finance (BVI) Limited or the Holding Companies to
    perform its respective obligations under the Facility Agreement to which it is a party has been or
    will be materially and adversely affected; and
(   Champion REIT failing to comply with the SFO or any relevant SFC Codes (including the REIT
    Code) or the occurrence of any of the events of default contained in the legal charge and
    debenture, the borrower floating charge and the earnings assignment given in connection with the
    Facility Agreement.

                                               187
                     MATERIAL AGREEMENTS AND OTHER DOCUMENTS
                             RELATING TO CHAMPION REIT

Covenants
      The Facility Agreement contains certain customary covenants that restrict the Finance Company and
the Property Companies (subject to certain agreed exceptions), from, among other things, incurring
additional debt and creating security on the Property Companies’ property, revenues or other assets.
Affirmative covenants include covenants by the Finance Company (which in the case of certain covenants
also include covenants by the Property Companies and/or the Trustee on behalf of Champion REIT to
ensure or procure the covenants are complied with) to, among other requirements:
     (    maintain, or procure to be maintained, property all risk, rental loss and third party liability
          insurance policies with respect to the Property with reputable insurers;
     (    comply or procure compliance with all relevant laws and regulations, including the REIT Code
          and all relevant SFO codes and guidelines on collective investment schemes;
     (    procure the maintenance of the listing of the Units on the Hong Kong Stock Exchange; and
     (    procure that there will be no change of the Trustee, Manager, Property Manager and/or valuer of
          the Property without giving prior written notice to the facility agent;
     (    maintain in full force and effect the authorizations required from any governmental or other
          authority or from any shareholders or creditors of the Finance Company, Champion REIT, the
          Property Companies, CP Finance (BVI) Limited and the Holding Companies, or any other
          authorizations, for and in connection with the Facility Agreements and the entering into of the
          Trust Deed; and
     (    procure that neither the Finance Company nor any Property Company will borrow or raise money
          or credit or incur any other indebtedness or issue any guarantee/indemnity except where the
          aggregate principal amount does not exceed HK$50 million and except for certain advances made
          between the Group Companies.
     The Trustee, on behalf of Champion REIT, is required to procure that no substantial change is made to
the general nature of Champion REIT’s business, any Holding Company or any Property Company.
     The Finance Company must also comply with the following financial ratios:
     (    total borrowings, including actual outstanding as well as committed but undrawn amounts
          (excluding committed but undrawn borrowings solely for the purpose of refinancing existing
          borrowings within one month’s time) of the Finance Company and the Property Companies, shall
          not exceed 50% of the aggregate open market value of the Property (the ‘‘Security Margin’’),
          tested on a semi-annual basis, or if it exceeds 50%, to restore such ratio to 50% or below within
          six months or such longer period as the majority lenders may agree, from the facility agent’s
          notification to the borrower of non-compliance with the Security Margin (the ‘‘Remedy Period’’).
          The mere fact that the Security Margin exceeds 50% will not be an event of default if
          (i) Champion REIT has delivered its proposal of restoration of the Security Margin to the facility
          agent within three months from the facility agent’s notification to the borrower of non-
          compliance, (ii) the Security Margin shall have been restored to 50% or below within the Remedy
          Period and (iii) the Security Margin does not at any time during the Remedy Period reach or
          exceed 65%;
     (    earnings before interest, tax, depreciation and amortization in respect of each financial year shall
          not be less than 2.5 times the finance costs after the interest rate swaps (including capitalized
          interest but excluding the amortized upfront swap payments, and thus equivalent to the cash
          finance costs), tested on a quarterly basis, and;
     (    total consolidated borrowings of Champion REIT and its subsidiaries shall not exceed 45% of its
          consolidated gross asset value, tested on a semi-annual basis.

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               MATERIAL AGREEMENTS AND OTHER DOCUMENTS
                       RELATING TO CHAMPION REIT

     Where the Champion REIT has no investment other than the Property, non-compliance with this
     financial covenant by itself will not constitute an event of default if:

     (1)   the Security Margin does not exceed 50%; or

     (2)   where the Security Margin does exceed 50%, (i) the Champion REIT shall have delivered
           its proposal of restoration of the Security Margin to the facility agent within 3 months
           from the facility agent’s notification to the borrower of non-compliance, and (ii) the
           Security Margin shall have been restored to 50% or below within the Remedy Period and
           (iii) the Security Margin does not at any time during the Remedy Period reach or exceed
           65%;

     Where the Champion REIT has other investments in addition to the Property, non-compliance
     with this covenant by itself shall not constitute an Event of Default if:

     (1)   the Security Margin does not exceed 50%; and

     (2)   the majority lenders have, at the request of the borrower, determined, and on such terms
           and conditions as they may think fit, that such non-compliance with the financial covenant
           by itself does not constitute an event of default;

The negative covenants include that the Finance Company must not:
(   purchase or redeem any of its issued shares or reduce its share capital or make a distribution of
    assets or other capital distribution to its shareholders;
(   (and must procure that none of the Property Companies will) declare or pay any dividend or
    make any other income distribution or repayment of shareholder’s or inter-company loan to its
    shareholders, the Property Companies, CP Finance (BVI) Limited, the Holding Companies or
    Champion REIT where there is an event of default (including where the Security Margin reaches
    or exceeds 65% at any time during the Remedy Period) which has not been waived or remedied,
    or where an event of default will occur as a result of such declaration, payment, distribution or
    repayment;
(   acquire or agree to acquire any property or assets except property or assets which are required for
    the day-to-day administration of its business;
(   sell, transfer or otherwise assign, deal with or dispose of all or any part of its business or its assets
    or revenues, whether by a single transaction or by a number of transactions whether related or
    not;
(   make or grant any indemnity or guarantee or in any other manner be or become directly or
    indirectly or contingently liable for any indebtedness or other obligation of any other person,
    except in relation to the payment of costs and expenses pursuant to or otherwise permitted under
    or contemplated by the Facility Agreement or as may be necessary in the ordinary course of its
    business;
(   enter into any agreement or obligation which might materially and adversely affect its financial or
    other condition; or
(   allow or permit any material change in investment and distribution policies and fee payment
    formula to Champion REIT Trustee, the Manager and the Property Manager without prior written
    notice having been given to the facility agent.

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                      MATERIAL AGREEMENTS AND OTHER DOCUMENTS
                              RELATING TO CHAMPION REIT

Provision of Information
     Under the Facility Agreement, the Finance Company must submit:
     (a) annual audited financial statements of the Finance Company and the Property Companies within
         180 days of the end of each fiscal year and unaudited interim financial statements of the Finance
         Company and the Property Companies within 120 days after the end of the first six months of
         each fiscal year;
     (b) on a semi-annual basis, at its own expense, a valuation report on the Property prepared by an
         independent property valuer appointed by the Trustee and/or the Manager required under the
         Trust Deed or by any law or directive including relevant regulations of the Hong Kong Stock
         Exchange within 30 days after completion of such reports provided that such valuation shall be
         conducted at least once in every half financial year of Champion REIT;
     (c) annual audited financial statements of Champion REIT within 180 days of the end of each fiscal
         year and unaudited interim financial statements within 120 days after the end of the first six
         months of each fiscal year;
     (d) the rent roll and change of tenancy report on a quarterly basis within 60 days from each calendar
         quarter end;
     (e) the operating budget approved by the Manager and/or the Trustee annually in advance; and
     (f) material notices, reports, accounts, circulars, documents or other material information sent to the
         Unitholders at the same time as they are dispatched to the Unitholders.

Security
     The term loan and the revolving credit facility are required to be secured by:
     (     a first priority legal charge and debenture over the Property;
     (     an assignment of rental and sales proceeds and lease and sales and purchase agreements of the
           Property, incorporating a charge over each of a rental account and a sales proceeds account;
     (     an assignment of all policies of insurance (other than third party liability insurance) relating to
           the Property;
     (     an assignment of the Property Management Agreement;
     (     a joint and several guarantee by Champion REIT and the Property Companies;
     (     a subordination and assignment of the liabilities owing by the Finance Company and the Property
           Companies to the Holding Companies; and
     (     a first floating charge over all the undertaking, property, assets and rights of the Finance
           Company.

INTEREST RATE SWAPS
      Each of the New Property Companies entered into an interest rate swap agreement on April 24, 2006,
for a term of five years effective on the Listing Date, with Merrill Lynch Capital Markets Bank Limited,
with a guarantee by Merrill Lynch & Co., Inc. The swaps are for a total notional amount equivalent to the
amount of the term loan, or HK$7,000 million, and upfront swap payments of HK$1,417.0 million in
aggregate are to be paid by the New Property Companies to Merrill Lynch Capital Markets Bank Limited on
the Listing Date.

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                     MATERIAL AGREEMENTS AND OTHER DOCUMENTS
                             RELATING TO CHAMPION REIT

     The following table sets forth the notional amounts of each interest rate swap agreement, equivalent to
the portion of the term loan on-lent by the Finance Company to the respective New Property Companies,
and the amount of upfront swap payments under each interest rate swap agreement.
                                                              Notional swap amount     Upfront payment
     New Property Company                                        (HK$ millions)         (HK$ millions)

     CP   (SH) Limited******************************                  4,977                 1,007.5
     CP   (MC) Limited *****************************                    265                    53.6
     CP   (PH) Limited******************************                    273                    55.3
     CP   (WC) Limited *****************************                    112                    22.7
     CP   (A1) Limited ******************************                 1,187                   240.3
     CP   (B1) Limited ******************************                   186                    37.7
     Total****************************************                    7,000                 1,417.0

      Under the interest rate swaps, the swap counterparty will pay the New Property Companies on a
quarterly basis an aggregate amount equivalent to the floating rate interest payable in respect of the term
loan under the Facility Agreement, which the New Property Companies will pay to the Finance Company
for the Finance Company to meet the interest payments payable in respect of the term loan under the
Facility Agreement. In return, the New Property Companies will pay fixed interest rates on the notional
amount of their respective interest rate swap agreements to the swap counterparty. For further details of the
interest rate swaps, see the section headed ‘‘Certain Factors Affecting Future Results of Operations and
Financial Condition — Change in Nature of Existing Costs — Finance Costs and Interest Rate Swaps’’ in
this Offering Circular.




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                               CONNECTED PARTY TRANSACTIONS


DETAILS OF CONNECTED PARTY TRANSACTIONS                                                                         B2(o)/
                                                                                                                B2(p)
     Following completion of the Global Offering, there will be continuing transactions between Champion
REIT and the following persons noted below, which will constitute connected party transactions of
Champion REIT within the meaning of the REIT Code. Details of these transactions as well as the
modifications or waivers sought by Champion 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 the Manager, Champion REIT and the other
companies or entities held or controlled by Champion REIT (collectively, ‘‘Champion REIT Group’’) and
parties which have a relationship or connection with Champion REIT.
     The REIT Code contains rules (the ‘‘connected party rules’’) governing transactions between
Champion REIT and its Group Companies, and certain defined categories of ‘‘connected persons’’ within
the meaning given in the REIT Code. Such transactions will constitute ‘‘connected party transactions’’ for
the purposes of the REIT Code.
    In addition to ‘‘significant holders’’ (that is, holders of 10% or more of the outstanding Units),          8.3(a)
Champion REIT’s ‘‘connected persons’’ will include, among others:
     (a)    the Trustee and companies within the same group or otherwise ‘‘associated’’ with the Trustee
            (the ‘‘Trustee Connected Persons’’) within the meaning given in the REIT Code. As a result,
            the list of ‘‘connected persons’’ of Champion REIT will include HSBC Holdings plc.
            (‘‘HSBC’’) and other members of its group because the Trustee is an indirect wholly-owned
            subsidiary of HSBC; and
     (b)    Sun Fook Kong Holdings Limited (‘‘SFK’’), a corporation controlled by certain members of the
            family of Mr. Lo Ying Shek, the Chairman of Great Eagle, and their related trusts and
            companies, or any person who is a connected person of Champion REIT as a result of its
            relationship with SFK (for example, subsidiaries and associated companies of SFK)
            (collectively, the ‘‘SFK Connected Persons Group’’).
      The Manager has established an internal control system intended to ensure that connected party            8.2(b)
transactions between Champion REIT Group and its ‘‘connected persons’’ are monitored and that they are
undertaken on terms in compliance with the REIT Code. As required by the REIT Code, all connected party
transactions must be carried out at arm’s length and on normal commercial terms and in the best interests of
Unitholders.
      The Manager has also applied to the SFC for certain waivers from strict compliance with the REIT
Code with respect to transactions (a) between Champion REIT Group and/or the SFK Connected Persons
Group; and (b) between the Trustee Connected Persons and Champion REIT Group. These waivers are
subject to the conditions mentioned under the sub-sections headed ‘‘Waivers for Certain Connected Party
Transactions between Champion REIT Group, the Great Eagle Connected Persons Group and/or the SFK
Connected Persons Group’’ and ‘‘Waivers for Certain Connected Party Transactions between the Trustee
Connected Persons and Champion REIT Group’’ below. Save as disclosed in this Offering Circular, the
Manager has not entered into nor does it anticipate entering into any connected party transactions such as
leasing transactions with Champion REIT Group.

INTERNAL CONTROLS
      The Manager has established an internal control system intended to ensure that connected party            8.2(b)
transactions between Champion REIT Group and its ‘‘connected persons’’ are monitored and that these are

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                                CONNECTED PARTY TRANSACTIONS

undertaken on terms in compliance with the REIT Code. As required by the REIT Code, all connected party
transactions must be carried out at arm’s length and on normal commercial terms and in the best interests of
Unitholders.
      As a general rule, the Manager must demonstrate to the Audit Committee that all connected party
transactions satisfy the foregoing criteria, which may entail (where practicable) obtaining quotations from
parties unrelated to the Manager, or obtaining one or more valuation letters from independent professional
valuers.
      The Manager is required to investigate and monitor all transactions by Champion REIT in order to             8.2(b)
determine whether such transactions are connected party transactions. Furthermore, the Manager is required
to maintain a register to record all connected party transactions which are entered into by Champion REIT
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 is also required to incorporate into its
internal audit plan a review of all connected party transactions entered into by Champion REIT.
      With respect to tenancies of real estate by members of Champion REIT Group in the ordinary course
of business, transactions shall be evaluated for these purposes by reference to the value of rental for the term
of the tenancy.

WAIVERS FOR CERTAIN CONNECTED PARTY TRANSACTIONS BETWEEN CHAMPION
REIT GROUP, THE GREAT EAGLE CONNECTED PERSONS GROUP AND/OR THE SFK
CONNECTED PERSONS GROUP
Categories of Transactions covered by the Waiver
      The SFC has granted a waiver from strict compliance with the disclosure and Unitholders’ approval
requirements under Chapter 8 of the REIT Code in respect of the following categories of connected party
transactions between Champion REIT Group, the Great Eagle Connected Persons Group (as defined below)
and/or the SFK Connected Persons Group:
     (a) Leasing and licensing transactions
      The leasing and licensing transactions include transactions that are to be conducted in the ordinary
course of the leasing business of Champion REIT and transacted on normal arm’s length commercial terms
with Great Eagle or any person who is a ‘‘connected person’’ of Champion REIT as a result of its
relationship with Great Eagle (the ‘‘Great Eagle Connected Persons Group’’).
     (b) Property management transactions
     Property management transactions include any transactions that are in the nature of property
management, estate management, leasing services and other operational arrangements in respect of the
Property and subsequent properties to be acquired by Champion REIT and that are to be entered into with
the Great Eagle Connected Persons Group or the SFK Connected Persons Group, including:
     (     Property management in respect of Champion REIT’s assets: The Manager will delegate the
           property and lease management functions in respect of Champion REIT’s real estate assets to the
           Property Manager, which may delegate such functions to any wholly-owned subsidiaries of Great
           Eagle which are qualified to perform such property and lease management services, or may enter
           into contracts with qualified third party service providers that have been vetted and approved by
           the Manager for the provision of those services contemplated under the Property Management
           Agreement which are not provided directly by the employees or delegates of the Property
           Manager;
     (     Third party services: Under the terms of the Property Management Agreement, the Property
           Manager may enter into contracts as agent for the Property Companies in respect of services such

                                                      193
                                CONNECTED PARTY TRANSACTIONS

            as cleaning, repair and maintenance in relation to the Property. It is currently anticipated that
            some of these third party contractors will be members of the Great Eagle Connected Persons
            Group or the SFK Connected Persons Group;
     (      Leasing services: Under the terms of the Property Management Agreement, the Property
            Manager will provide leasing and marketing services to Champion REIT for the Property. The
            Property Manager will be entitled to receive a payment of leasing commission based on the
            following rate for services rendered:
            (    a commission equivalent to one month’s base rent, for securing a tenancy of three years or
                 more;
            (    a commission equivalent to one-half month’s base rent, for securing a tenancy of less than
                 three years;
            (    a commission equivalent to one-half month’s base rent, for securing a renewal of tenancy
                 irrespective of the duration of the renewal term; and
            (    a commission equivalent to 10.0% of the total licence fee, for securing a licence for a
                 duration of less than 12 months; and
     (      Deeds of mutual covenant: Each of the Property Companies will be bound by the terms of the
            DMC. In respect of properties to be acquired by Champion REIT, the relevant property holding
            company will, where applicable, be bound by the deed of mutual covenant applicable to the
            property owned by it. The deed of mutual covenant binds the manager under the deed of mutual
            covenant and all the owners of a development and their successors-in-title, irrespective of
            whether they are original parties to the deed of mutual covenant. The DMC Manager is a member
            of the Great Eagle Connected Persons Group. Further, it is also possible that the manager
            appointed under the deed of mutual covenants in respect of future properties to be acquired by
            Champion REIT may be members of the Great Eagle Connected Persons Group. There may also
            be situations arising where one or more members of the Great Eagle Connected Persons Group
            may own other parts of the development of which the property owned by Champion REIT forms
            part, and therefore technically the deed of mutual covenant constitutes a contract between them.
            Under the relevant deeds of mutual covenants, the DMC Manager is entitled to collect a property
            management fee for the management services rendered.
     Pursuant to such waiver, any connected party transactions falling within the categories mentioned
above need not be disclosed as connected party transactions and are not subject to Unitholders’ approval
subject to the conditions imposed by the SFC set out below.

Waiver Conditions
     (a)     Extensions or modifications
      The waiver in the preceding paragraphs granted by the SFC has been granted for a period which will
expire on December 31, 2008. The waiver may be extended beyond December 31, 2008, and/or the
conditions of the waiver may be modified from time to time, provided that:
     (i)     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;
     (ii)    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

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                                 CONNECTED PARTY TRANSACTIONS

      (iii)   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 of Champion REIT
              after the date on which the approval referred to in (i) above is obtained.

      (b)     Annual limits

     The annual value of the connected party transactions described in the above shall not exceed the
respective annual limits set out in the following table:
                                             For the period from
                                             the Listing Date to    For the year ending    For the year ending
Categories of connected party transactions   December, 31 2006      December 31, 2007      December 31, 2008

Leasing/licensing transactions with the
  Great Eagle Connected Persons
  Group *************************            HK$    6.1 million     HK$ 12.0 million       HK$ 15.8 million
Property management transactions with
  the Great Eagle Connected Persons
  Group *************************            HK$115.7 million       HK$190.9 million       HK$210.0 million
Property management transactions with
  the SFK Connected Persons Group**          HK$    3.7 million     HK$    6.1 million     HK$    6.7 million

     The annual limits set out in the table above should not be taken as the anticipated growth
projections or indicators of the performance of Champion REIT. The annual limits have been
determined in good faith by the Manager.

      In respect of leasing/licensing transactions, an independent valuation will be conducted for each of
such leasing/licensing transactions except where they are conducted on standard or published rates. In the
case of leasing/licensing transactions with no fixed term, including monthly tenancies, an independent
valuation will be conducted no less than once every 24 months.

      (c)     Disclosure in semi-annual and annual report

     Details of the relevant connected party transactions will be disclosed in Champion REIT’s semi-             8.2
annual and annual reports, as required under paragraph 8.14 of the REIT Code.

      (d)     Auditors’ review procedures

      In respect of each relevant financial period, the Manager will engage and agree with the auditors of
Champion 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 will be provided to the SFC), confirming whether all such connected party transactions:

      (i)     have received the approval of the Board (including the independent non-executive Directors);

      (ii)    are in accordance with the pricing policies of Champion REIT;

      (iii)   have been entered into in accordance with the terms of the agreements governing the
              transactions; and

      (iv) the total value in respect of which has not exceeded the respective annual limits, where
           applicable, as set out in the above.




                                                      195
                                CONNECTED PARTY TRANSACTIONS

     (e)     Review by the independent non-executive directors of the Manager
      The independent non-executive Directors will review the relevant connected party transactions
annually and confirm in Champion REIT’s annual report for the relevant financial period that such
transactions have been entered into:
     (i)     in the ordinary and usual course of business of Champion REIT;
     (ii)    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 favorable to Champion REIT than terms available to or from (as
             appropriate) independent third parties; and
     (iii)   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.
     (f)     Auditors’ access to books and records
      The Manager will allow, and will procure the counterparty to the relevant connected party transaction
to allow, the auditors of Champion REIT sufficient access to their records for the purpose of reporting on
the transactions.
     (g)     Notification to the SFC
      The Manager will promptly notify the SFC and publish an announcement if it knows or has reason to
believe that the auditors and/or the independent non-executive Directors will not be able to confirm the
matters set out in the above.
     (h)     Subsequent increases in annual caps with independent unitholders’ approval
      If necessary, for example, where there are further asset acquisitions by Champion REIT thereby
increasing the scale of its operations generally, or where there are changes in market or operating
conditions, the Manager may, from time to time in the future, seek to increase one or more of the annual
limits set out in the above, provided that:
     (i)     the approval of Independent Unitholders is obtained by way of an Ordinary Resolution passed in
             a general meeting of Unitholders;
     (ii)    disclosure of details of the proposal to increase the cap amounts 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
     (iii)   the requirements referred to in paragraphs (b) to (g) above shall continue to apply to the relevant
             transactions, save that the increased annual limits shall apply.
     (i)     Paragraph 8.14 of the REIT Code
      The Manager will 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 change to the REIT Code which may impose stricter requirements in respect of disclosure
and/or unitholders’ approval.
      Details of the connected party transactions will be disclosed in the semi-annual and annual report of
Champion REIT as required under paragraph 8.14 the REIT Code. The independent non-executive Directors              8.2
will review the connected party transactions annually and confirm whether such transactions are carried out
in the ordinary and usual course of business of Champion 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.

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                               CONNECTED PARTY TRANSACTIONS

Opinion of the Board

     The Board (including all the independent non-executive Directors) confirms that:

     (a)    in its opinion, the annual limits stated above, and the basis for such annual limits, are fair and
            reasonable having regard to the interests of the Unitholders as a whole.

     (b)    for those of the continuing connected party transactions in respect of which waiver is being
            sought hereunder (‘‘Continuing CPTs’’) which are subsisting as of the Listing Date, in its
            opinion, each of such Continuing CPTs has been entered into: (i) in the ordinary and usual
            course of business of Champion REIT (or its predecessor, as the case may be); and (ii) on terms
            which are normal commercial terms at arm’s length 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
            CPTs shall be entered into: (i) in the ordinary and usual course of business of Champion 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 Listing Agent

      Merrill Lynch Far East Limited, in its capacity as the listing agent of Champion REIT for the purposes
of the authorization of Champion REIT under Part IV of the SFO and the listing of the Units on the Hong
Kong Stock Exchange, confirms that, in their opinion, the Continuing CPTs as subsisting as of the Latest
Practicable Date are in the ordinary and usual course of business of Champion REIT, 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 confirms that the rentals of the subject lettings were at market levels
as of their respective tenancy agreement dates and the other commercial terms in the tenancies such as
tenure, rental deposits and break clauses are normal commercial terms.

WAIVERS FOR CERTAIN CONNECTED PARTY TRANSACTIONS BETWEEN THE TRUSTEE
CONNECTED PERSONS AND CHAMPION REIT GROUP

Categories of Transactions covered by the Waiver

    The Manager has also applied to the SFC for waivers from strict compliance with Chapter 8 of the
REIT Code in respect of certain transactions between the Trustee Connected Persons and Champion REIT
Group.

     For the purposes of this section:

     (a)    ‘‘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 Champion REIT); and

     (b)    ‘‘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.

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                               CONNECTED PARTY TRANSACTIONS

       In support of the application for the waiver request, the Manager has undertaken with the SFC to meet
certain conditions, including the following general conditions (‘‘General Conditions’’) on an ongoing
basis:
     (a)    the connected party transactions are carried out at arm’s length on normal commercial terms and
            in the interests of the Unitholders of Champion REIT as a whole;
     (b)    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;
     (c)    the Manager is satisfied with the Trustee’s internal controls and compliance procedures, such as
            implementing ‘‘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
     (d)    the Manager incorporates provisions in the Trust Deed that require the Trustee to take actions or
            commence proceedings on behalf of Champion 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 Champion REIT
            with such Trustee Connected Persons.
       Separately and for the purpose of this waiver, each of the Trustee and The Hongkong and Shanghai          8.3(b)
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 Champion REIT. The Trustee undertakes to
the SFC that it will not be involved in the making of any decisions on behalf of Champion 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.
      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 Champion 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 set out above, 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 to ensure that they are conducted in the best interests of the Unitholders of
Champion REIT as a whole.
     Based on the controls summarized above, the Manager intends to adopt and observe certain policies
with respect to transactions between Champion REIT Group and the HSBC Group. Further, the Manager

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                               CONNECTED PARTY TRANSACTIONS

may engage the HSBC Group to provide ‘‘ordinary banking and financial services’’ to Champion 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:
     (a)    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;
     (b)    loans extended by an HSBC Group intermediary being a transaction in the ordinary course of          7.9
            business of Champion REIT Group and provided to, or arranged for Champion REIT Group on
            arm’s length commercial terms; and
     (c)    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 Champion REIT Group (including insurance, Occupational Retirement
            Scheme Ordinance retirement benefit schemes, Mandatory Provident Fund Schemes, credit
            cards, asset management and other such services).
      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 Champion REIT Group in each financial year has to be
disclosed in the annual report of Champion 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 of the Manager 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:
     (a)    in the ordinary and usual course of business of Champion 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 favorable to Champion 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 of Champion REIT as a whole.
      In addition, the auditors of Champion 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) have followed the Manager’s internal
procedures for such transactions and are in accordance with the terms disclosed in the offering document;
(b) have received the approval of the board of directors of the Manager (including the independent non-
executive directors of the Manager; (c) are in accordance with the pricing policies of Champion 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).




                                                    199
                               CONNECTED PARTY TRANSACTIONS

Excluded Transactions
     The following transactions will not be deemed connected party transactions of Champion REIT for the
purposes of Chapter 8 of the REIT Code:
     (a)   where the HSBC Group acts for a third party as nominee, custodian, agent or trustee and
           conducts ‘‘agency transactions’’ with Champion REIT Group;
     (b)    where a collective investment scheme (including another REIT) transacts with Champion 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 proprietary transaction of the HSBC Group; and
     (c)   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 Hong Kong Stock
           Exchange will not be a connected party transaction.

Waiver for Lease or Licence 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 paragraphs 8.9 and 8.11 of the REIT Code in respect of
any lease or licence transactions entered into with Champion 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 (c), (d) and (e) below. As a result of this waiver, the
Manager is not required to make announcements or seek Unitholders’ approval regarding lease or licence
transactions between Champion 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 licence
transactions entered into with Champion REIT Group where any member of the HSBC Group is a lessee or
licensee shall be modified as described in paragraphs (c), (d) and (e) below.
     The above waiver is granted on condition that:
     (a)   the grant of the lease or license is negotiated and determined by the Manager and/or the
           Manager’s delegate on behalf of Champion REIT Group;
     (b)   an independent valuation is conducted for each of the lease and licence transactions except
           where they are conducted on standard or published rates;
     (c)   the aggregate amount of annual rent paid by the HSBC Group to Champion REIT Group during
           a financial year, together with the material terms of any lease or license with any member of the
           HSBC Group under which the annual rent (per lease or license) exceeds HK$1 million, is
           disclosed in the annual report of Champion REIT in accordance with paragraph 8.15 of the
           REIT Code;
     (d)   a statement is disclosed in the annual report by the independent non-executive directors of the
           Manager that they have reviewed the terms of such transactions and that they are satisfied that
           they have been entered into:
            (i)    in the ordinary and usual course of business of Champion REIT;
            (ii)   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 favorable to Champion REIT than terms
                   available to or from (as appropriate) independent third parties; and

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                                 CONNECTED PARTY TRANSACTIONS

             (iii)   in accordance with the relevant agreement governing them on terms that are fair and
                     reasonable and in the interests of the Unitholders of Champion REIT as a whole; and
     (e)     the Auditors’ Report shall cover all the relevant lease and licence transactions.

Waiver for Corporate Finance Transactions with the HSBC Group
      The SFC has granted a waiver from strict compliance with the requirement under paragraphs 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 Champion 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:
     (a)     underwriting, securitization, 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 advisor and/or global co-ordinator to Champion 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;
     (b)     lending and borrowing of funds or other related arrangements in connection with any facility
             agreement by which Champion REIT Group will finance the acquisition of real estate; and
     (c)     ‘‘corporate advisory transactions’’, namely the provision of corporate finance advice to
             Champion REIT Group and excludes transactions set out in paragraphs (a) and (b) above,
             provided that the aggregate fees that the HSBC Group derived from all ‘‘corporate advisory
             transactions’’ conducted for Champion REIT Group during a financial year shall be capped at
             1% of the latest published NAV of Champion REIT.
     For the avoidance of doubt, ‘‘corporate finance advice’’ means advice concerning:
     (i)     compliance with or in respect of the Rules Governing the Listing of Securities on The Stock
             Exchange of Hong Kong Limited, the Rules Governing the Listing of Growth Enterprise Market
             of The Stock Exchange of Hong Kong Limited, The Hong Kong Code on Share Repurchases or
             The Hong Kong Code on Takeovers and Mergers;
     (ii)    (I) any offer to dispose of securities to the public, (II) any offer to acquire securities from the
             public, or (III) acceptance of any offer referred to in (I) or (II), but only in so far as the advice is
             generally given to holders of securities or a class or securities; or
     (iii)   corporate restructuring in respect of securities (including the issue, cancellation or variation of
             any rights attaching to any securities).
     The above waiver is granted on condition that:
     (A)     the offering document and any circular for Champion REIT includes upfront disclosure of this
             waiver and, with respect to those corporate finance transactions under paragraphs (a) and (b) 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 Champion REIT Group in the financial year;
     (C)     the annual report includes disclosure in respect of any corporate finance transaction whose fees
             exceed HK$1 million: (I) the occurrence and nature of the transaction; (II) the parties to the
             transaction and (III) the date of the transaction;

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                              CONNECTED PARTY TRANSACTIONS

     (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 paragraphs (a), (b) and (c) 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 Champion
           REIT (subject to the Trustee’s duties of oversight under the REIT Code and the Trust Deed)
           including the selection of the financial advisors of the transaction;
     (E)   the annual report includes a statement by the independent non-executive directors of the
           Manager that they have reviewed the terms of such transactions and are satisfied that they have
           been entered into:
            (I)    in the ordinary and usual course of business of Champion REIT;
            (II)   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 favorable to Champion 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 of Champion REIT 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 Champion REIT Group during the
financial year exceed 1% of the latest NAV of Champion REIT as disclosed in the latest published audited
accounts of Champion 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 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 (including the independent non-executive Directors) is of the view that:
     (1)   the waivers are in the interests of the Unitholders of Champion REIT as a whole;
     (2)   it is satisfied with the internal control procedures of the Trustee with respect to the
                                                       a
           independence of the Trustee’s operation vis-` -vis the other banking function/operation of the
           HSBC Group;
     (3)   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
           Champion REIT conducted during the relevant financial year, is fair and reasonable having
           regard to the interests of the Unitholders of Champion REIT as a whole; and
     (4)   each connected party transaction shall be entered into in the ordinary course of business of
           Champion REIT, on normal commercial terms and in the interests of the Unitholders of
           Champion REIT as a whole.

UNITHOLDERS’ MANDATE
      The Manager may at any time in the future seek a general annual mandate from the Unitholders in
relation to other waivers from, or confirmations in relation to, the connected party rules for which the
Manager may apply to the SFC. In order to apply to the SFC for that purpose, the general mandates must be
made subject to any applicable requirements of the SFC or applicable provisions of the REIT Code. Such

                                                   202
                               CONNECTED PARTY TRANSACTIONS

mandates may include continuation or extension of existing waivers (including those set out under the sub-
section headed ‘‘Waiver for Certain Connected Party Transactions between Trustee Connected Persons and
Champion REIT Group’’ above).
      In seeking any such general mandate, the 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 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
Champion REIT and the Unitholders and that the terms and conditions of such transactions will be fair and
reasonable.

ROLE OF THE AUDIT COMMITTEE FOR CONNECTED PARTY TRANSACTIONS
      The Audit Committee will periodically review (and the executive Directors or the management team
of the Manager will periodically produce reports to the Audit Committee for review of) all connected party
transactions to ensure compliance with the Manager’s internal control systems 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.
      If a member of the Audit Committee 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
     Connected party transactions within any of the categories referred to above will be reviewed by
Champion REIT’s auditors and will be subject to disclosure in Champion REIT’s annual report and
accounts.

CONNECTED PARTY TRANSACTIONS IN CONNECTION WITH THE SETTING UP OF                                               8.4
CHAMPION REIT AND THE GLOBAL OFFERING
    The Trustee, on behalf of Champion REIT, has entered into a number of transactions with the
Manager and certain connected persons of the Manager or Great Eagle in connection with the setting up of
Champion REIT and the Global Offering. These connected party transactions are as follows:

The Trust Deed
      Champion REIT is constituted by the Trust Deed entered into on April 26, 2006 between the Manager
and the Trustee. For further details of the Trust Deed, see the section headed ‘‘The Trust Deed’’ in this
Offering Circular.

Reorganization Agreements
      The Trustee (on behalf of Champion REIT) has entered into the Reorganization Agreements with
Great Eagle, as guarantor, and the respective Vendor Companies on April 26, 2006 for the acquisition of the
Holding Companies. For further details of the Reorganization Agreements, see the section headed ‘‘Material
Agreements and Other Documents Relating to Champion REIT — Reorganization Agreements’’ in this
Offering Circular.

Deeds of Tax Covenant
      Great Eagle, as guarantor, and the relevant Vendor Companies entered into the Deeds of Tax Covenant
in favor of the Holding Companies and their subsidiaries and the Trustee (as trustee of Champion REIT).
For further details of the Deeds of Tax Covenant, see the section headed ‘‘Material Agreements and Other
Documents Relating to Champion REIT — Deeds of Tax Covenant’’ in this Offering Circular.

                                                    203
                               CONNECTED PARTY TRANSACTIONS

Property Management Agreement
      The Manager has entered into the Property Management Agreement with Eagle Property Management
(CP) Limited, a wholly-owned subsidiary of Great Eagle, on April 26, 2006 in relation to the management
of the Property after Completion. For further details of the Property Management Agreement, see the
section headed ‘‘Material Agreements and Other Documents Relating to Champion REIT — Property
Management Agreement’’ in this Offering Circular.
     Save as disclosed in this Offering Circular, the Trustee has not entered into any other transactions with
the Manager or any connected persons of the Manager or Great Eagle in connection with the setting up of
Champion REIT and the Global Offering.

OTHER CONTINUING TRANSACTIONS
     Save as disclosed above, there are no connected party transactions of which the Directors are aware
which may continue after the completion of the Global Offering.




                                                     204
                  MODIFICATIONS, WAIVERS AND LICENSING CONDITIONS

      In connection with the authorization of Champion 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
      Champion REIT has applied to the SFC for, and has received, a waiver from strict compliance with
certain provisions in Chapter 8 of the REIT Code in relation to certain continuing connected party
transactions of Champion REIT within the meaning of the REIT Code. Details of the waivers received for:
(a) certain connected party transactions between Champion REIT Group, the Great Eagle Connected
Persons Group and/or the SFK Connected Persons Group; and (b) certain connected party transactions
between the Trustee Connected Persons and Champion REIT Group, are set out in the section headed
‘‘Connected Party Transactions’’ in this Offering Circular.

WAIVER IN RESPECT OF PAYMENT OF MANAGER’S FEES BY WAY OF UNITS
      Under the terms of the Trust Deed, the Manager will be remunerated in the form of the Manager’s
Fee, an acquisition fee, and a divestment fee. The Manager has applied to the SFC for, and has received, a
waiver from strict compliance with certain requirements under Chapter 12 of the REIT Code in respect of
the issuance of Units to the Manager as payment of all or part of the Manager’s Fee subject to the following
conditions:
     (a)   the number of Units issued to the Manager by way of payment of all or part of the Manager’s
           Fee for each financial year of Champion REIT will be counted as part of the 20% (or such lower
           percentage as permitted by the REIT Code from time to time) of outstanding Units that the
           Manager may issue in each financial year without Unitholders’ approval pursuant to
           paragraph 12.2 of the REIT Code;
     (b)   in respect of each financial year, the maximum number of Units that may be issued to the
           Manager as payment of all or part of the Manager’s Fee for that financial year shall, in
           aggregate, be limited to such number of Units as represents 3% of the total number of Units
           outstanding as at the last day of the immediately preceding financial year plus the number of
           Units (if any) issued in the relevant financial year for the purposes of financing any acquisition
           of real estate by Champion REIT;
     (c)   any issuance of Units to the Manager as payment of all or part of the Manager’s Fee shall be
           made strictly in accordance with the requirements of the Trust Deed; and
     (d)   in the event that any payment of all or part of the Manager’s Fee in the form of Units exceeds
           the relevant thresholds set out in paragraph 12.2 of the REIT Code and paragraph (b) above, and
           Unitholders’ approval is not obtained for the issue of Units for such purpose, then payment of
           that excess part of the Manager’s Fee, as the case may be, will be made by Champion REIT to
           the Manager in cash.

LICENSING CONDITIONS ON THE MANAGER
     The SFC has imposed the following licensing conditions upon the Manager:
     (a)   The Manager’s licence shall lapse and cease to have effect as and when:
           (i)    Champion REIT is de-authorized; or
           (ii)   the Manager ceases to act as the management company of Champion REIT; and
     (b)   For type 9 regulated activity, the Manager shall only engage in managing Champion REIT.

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OTHER INFORMATION




       206
                                                TAXATION


       The following statements are by way of a general guide to investors only and do not constitute tax         B15
  advice. Investors are therefore advised to consult their professional advisors concerning possible
  taxation or other consequences of purchase, holding, selling or otherwise disposing of the Units under
  the laws of their country of incorporation, establishment, citizenship, residence or domicile.

      The following summary is based on Hong Kong taxation law, regulation and practice in force at the
date of this Offering Circular and may be subject to subsequent change. The comments made in this
summary relate only to Champion REIT and its subsidiaries as disclosed in the section headed
‘‘Reorganization, Structure and Organization of Champion REIT’’ in this Offering Circular. Investors
subject to taxes in jurisdictions other than Hong Kong should consult their own tax advisors
regarding their investment in Units. Investors should note that Champion REIT will be a passive
foreign investment company for United States federal income tax purposes.

CHAMPION REIT
Profits Tax
      Champion REIT, as a collective investment scheme constituted as a unit trust and authorized under
section 104 of the SFO, is exempt from Hong Kong profits tax.
      The Group Companies incorporated in Hong Kong will be subject to Hong Kong profits tax in respect
of profits derived from the letting of the Property in Hong Kong at the current rate of 17.5%. The Property
Companies will not be subject to Hong Kong profits tax on any capital gains derived from the disposal of
the Property, provided the Property is not held for trading purposes as Hong Kong does not impose tax on
capital gains. For tax purposes, the Manager treats the Property as not held for trading purposes.
      The Group Companies incorporated outside Hong Kong will be subject to Hong Kong profits tax in
respect of profits arising in or derived from Hong Kong at the current rate of 17.5% if they are regarded as
carrying on a trade, profession or business in Hong Kong. Dividend income derived by the Holding
Companies from the Property Companies will be exempt from Hong Kong profits tax.
     The Finance Company will be subject to Hong Kong profits tax at a current rate of 17.5% in respect of
any profits arising in or derived from its financing activities in Hong Kong.

Withholding Tax
     Distributions from the Property Companies and the Finance Company to the Holding Companies and
from the Holding Companies to Champion REIT will not be subject to any withholding tax in Hong Kong.
    Distributions from Champion REIT to Unitholders will not be subject to any withholding tax in
Hong Kong.

Stamp Duty
     No Hong Kong stamp duty is payable by Champion REIT on the issue of new Units.
     In the event that the Manager decides to acquire a new property in Hong Kong or dispose of any
property, such acquisition or disposal of property will attract Hong Kong stamp duty. Depending on the
purchase price, Hong Kong stamp duty will be charged at up to 3.75% of the higher of the consideration or
market value of the property.
     In the case where the acquisition or disposal is effected by way of a transfer of shares, Hong Kong
stamp duty is payable on any purchase and sale of shares, to the extent the shares to be transferred constitute
Hong Kong stock as defined under the Hong Kong Stamp Duty Ordinance (Chapter 117 of the Laws of
Hong Kong). The applicable rate is 0.2% of the higher of the consideration or value of the shares.

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                                                TAXATION

UNITHOLDERS
Profits Tax
      It is understood that, under the Inland Revenue Department’s current practice, Hong Kong profits tax
will not be payable by a Unitholder on distributions made by Champion REIT. However, Unitholders should
take advice from their own professional advisors as to their particular tax position.
      Hong Kong profits tax will not be payable by any Unitholder (other than a Unitholder carrying on a
trade, profession or business in Hong Kong and holding the Units for trading purposes) on any capital gains
made on the sale or other disposal of the Units.

Stamp Duty
    No Hong Kong stamp duty is payable by Unitholders in relation to the issue of Units to them by
Champion REIT.
      The sale and purchase of Units by a Unitholder 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 Unitholder selling the Units and the purchaser will each be liable for
one-half of the amount of 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
      Under existing law, Units will form part of the Hong Kong estate of a deceased Unitholder for the
purposes of Hong Kong estate duty. The Abolition of Estate Duty legislation was passed on November 2,
2005 by the Hong Kong Legislative Council and became effective from February 11, 2006
(the ‘‘commencement date’’). Estates of persons who pass away on or after the commencement date will
not be subject to estate duty.




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                                             UNDERWRITING

HONG KONG UNDERWRITERS
Merrill Lynch Far East Limited
Citigroup Global Markets Asia Limited
J.P. Morgan Securities (Asia Pacific) Limited
Core Pacific — Yamaichi International (H.K.) Limited
Dao Heng Securities Limited
Kingsway Financial Services Group Limited
Shenyin Wanguo Capital (H.K.) Limited
South China Securities Limited

HONG KONG UNDERWRITING AGREEMENT
      Pursuant to the Hong Kong Public Offering, Champion REIT is offering the Hong Kong Public
Offering Units for subscription on, and subject to, the terms and conditions of this Offering Circular and the
Application Forms. Subject to the Listing Committee of the Hong Kong Stock Exchange granting listing of,
and permission to deal in, the Units to be offered pursuant to the Global Offering as mentioned herein and to
certain other conditions set out in the Hong Kong Underwriting Agreement, the Hong Kong Underwriters
have agreed severally and not jointly to subscribe or procure subscribers for the Hong Kong Public Offering
Units which are being offered but are not taken up under the Hong Kong Public Offering on the terms and
conditions of this Offering Circular, the Application Forms and the Hong Kong Underwriting Agreement.

Grounds for Termination by the Hong Kong Underwriters
     The Joint Lead Underwriters (on behalf of the Hong Kong Underwriters) may, in their sole discretion,
and without any liability on their part, give a notice to the Manager and Great Eagle electing to terminate the
Hong Kong Underwriting Agreement at any time at or prior to 8:00 a.m. on the Listing Date if:
     (a) there shall develop, occur, or exist or come into force or effect any of the following situations,
         which in the opinion of the Joint Lead Underwriters (on their own behalf and on behalf of the
         Hong Kong Underwriters) in consultation with Great Eagle (A) is or will or is likely to be
         materially adverse to the business, financial or other condition or prospects of Champion REIT or
         Champion REIT and the Group Companies taken as a whole; or (B) will adversely and materially
         prejudice the ability of the Joint Lead Underwriters to market or procure the sale of or
         subscriptions for the Units pursuant to the Global Offering or the completion of the Global
         Offering:
           (i)    any change or development involving a prospective change or development, or any event
                  or series of events resulting in or representing a change or development, or prospective
                  change or development, in local, national, regional or international financial, political,
                  military, industrial, regulatory, economic, fiscal or market conditions or the legal or
                  regulatory environment (including, without limitation, conditions in stock and bond
                  markets, money and foreign exchange markets and inter-bank markets and monetary or
                  trading settlement systems or a change in the system under which the value of the
                  Hong Kong currency is linked to that of the currency of the United States, or a devaluation
                  of the Renminbi against any foreign currencies) in or affecting Hong Kong, the PRC, the
                  United States, the United Kingdom, Japan, Singapore, Australia, or the Netherlands (the
                  ‘‘Relevant Jurisdictions’’); or
           (ii)   any event or series of events in the nature of force majeure (including, without limitation,
                  acts of government, strikes, lock-outs, fire, explosion, civil commotion, riot, economic
                  sanctions, acts of war, acts of terrorism (whether or not the responsibility has been

                                                     209
                                       UNDERWRITING

             claimed), escalation of hostilities (whether or not war has been declared), acts of God,
             epidemic (including but not limited to H5N1 and SARS), or accident) in or affecting any
             of the Relevant Jurisdictions; or
     (iii)   any outbreak or escalation of hostilities (whether or not war is or has been declared) or
             calamity or crisis involving any of the Relevant Jurisdictions or any escalation thereof, or
             the declaration by any of the Relevant Jurisdictions of a national emergency or war, or the
             occurrence of any other calamity or crisis; or
     (iv)    the imposition or declaration of: (A) any suspension or limitation on trading in shares or
             securities generally on the Hong Kong Stock Exchange, the New York Stock Exchange or
             the London Stock Exchange; or (B) any moratorium or disruption on banking activities or
             foreign exchange trading or securities settlement or clearing services in or affecting any of
             the Relevant Jurisdictions; or
     (v)     any change, or an official announcement by a competent authority of any prospective
             change, occurs in taxation or exchange control or currency exchange rates in or affecting
             any of the Relevant Jurisdictions; or
     (vi)    any material (whether singly or in the aggregate) litigations or claims being threatened or
             instigated against any member of the group comprising Champion REIT and the Group
             Companies; or
     (vii) any change or development involving a prospective change in the condition, financial or
           otherwise, or in the earnings, business affairs, business prospects, trading position,
           undertaking or assets of Champion REIT or the Property; or
     (viii) any injunction or order of any court that could prevent the subscription, issue or sale of the
            Units pursuant to the Global Offering, or
(b) any of the following shall have come to the notice of any of the Joint Lead Underwriters or Hong
    Kong Underwriters at any time after April 23, 2006:
     (i)     that any statement contained in (A) this Offering Circular and the Application Forms
             (together, the ‘‘Public Offering Documents’’); (B) this Offering Circular, this Offering
             Circular in English and Chinese in CD ROM format, the Blue Application Form, any
             announcements, offer awareness materials and summary disclosure materials issued by
             Champion REIT and/or Great Eagle in connection with the Preferential Offering
             (including any supplement or amendment thereto) (together, the ‘‘Preferential Offering
             Documents’’); or (C) the offering circulars (including the preliminary offering circular)
             issued in connection with the International Offering (together, the ‘‘International
             Offering Documents’’) was or has become untrue, incorrect or misleading in any material
             respect; or
     (ii)    any matter has arisen or has been discovered which would, if the Public Offering
             Documents, the Preferential Offering Documents or the International Offering Documents
             were issued at that time, constitute a material omission therefrom; or
     (iii)   that any of the warranties given by the Manager or Great Eagle in the Hong Kong
             Underwriting Agreement is (or would if repeated at that time be) untrue, misleading or
             breached in any respect and is or likely to be, in the sole opinion of the Joint Lead
             Underwriters, material in the context of the Global Offering; or
     (iv)    any breach of any of the obligations of any party (other than the Joint Lead Underwriters
             or the Hong Kong Underwriters) to the Hong Kong Underwriting Agreement in any
             material respect; or

                                                210
                                             UNDERWRITING

           (v)    any event, act or omission which gives or is likely to give rise to any liability of a material
                  nature of the Manager and/or Great Eagle pursuant to the indemnities contained in the
                  Hong Kong Underwriting Agreement.

Undertakings
  Champion REIT
     The Manager has undertaken to the Joint Lead Underwriters and the Hong Kong Underwriters
pursuant to the Hong Kong Underwriting Agreement that except:
     (a)    pursuant to the Global Offering;
     (b)    with the prior written consent of the Joint Lead Underwriters (on their own behalf and on behalf
            of the Hong Kong Underwriters); or
     (c)    pursuant to payment to the Manager on the terms set out in the Trust Deed and described in this
            Offering Circular,
neither Champion REIT nor any of the Group Companies shall, during the period of 180 days from the
Listing Date and whether conditionally or unconditionally (a) 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; (b) deposit Units with a depositary in connection with the issue of depositary receipts; (c) 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 (d) offer or agree or announce any
intention to do any of the foregoing.

  Great Eagle and GE Holder
      Pursuant to (i) a letter of undertaking provided by Great Eagle to the Joint Lead Underwriters, the
Hong Kong Underwriters and the International Underwriters, and (ii) a letter of undertaking provided by
GE Holder to the Joint Lead Underwriters, the Hong Kong Underwriters and the International Underwriters,
Great Eagle and GE Holder have undertaken to the Joint Lead Underwriters, the Hong Kong Underwriters
and the International Underwriters that, during the period starting from the Listing Date and ending on and
including the date which is 180 days after the Listing Date, without the prior written consent of the Joint
Lead Underwriters (on their own behalf and on behalf of the Hong Kong Underwriters and the International
Underwriters), they will not (and will procure that their subsidiaries will not), whether conditionally or
unconditionally:
     (a)    dispose of (i) any Units held by them as of the date of this Offering Circular (‘‘GE 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 GE Units; or
     (b)    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 GE Units or any securities
            exchangeable or convertible into any GE Units; or
     (c)    dispose of any direct or indirect interest in any company or entity holding any GE Units or any
            securities exchangeable or convertible into any GE Units; or
     (d)    offer or agree to do any of the foregoing or announce any intention to do so,
provided that these restrictions do not apply to (A) any sale or transfer by Great Eagle or GE Holder
pursuant to the exercise of the Over-allotment Option; (B) any unit lending agreement with the Stabilizing
Manager; or (C) the transfer of the GE Units by Great Eagle and/or GE Holder to and between wholly-

                                                      211
                                              UNDERWRITING

owned subsidiaries of Great Eagle provided that each such subsidiary has executed and delivered to the Joint
Lead Underwriters, the Hong Kong Underwriters and the International Underwriters an undertaking to the
effect of the above restrictions to remain in effect for the remainder of such 180-day period.
      In the event of a transfer permitted under sub-paragraph (C) above, Great Eagle and GE Holder have
further agreed that they shall not, for the remainder of such 180-day period, offer, issue, sell or contract to
issue or sell or otherwise dispose of, directly or indirectly, any shares in or any securities convertible into or
exchangeable for shares in, the share capital of the relevant wholly-owned subsidiary to which any GE Units
have been so transferred.

  Kerry Properties and KP Holder
      Pursuant to (i) a letter of undertaking provided by Kerry Properties to the Joint Lead Underwriters, the
Hong Kong Underwriters and the International Underwriters, and (ii) a letter of undertaking provided by KP
Holder to the Joint Lead Underwriters, the Hong Kong Underwriters and the International Underwriters,
Kerry Properties and KP Holder have undertaken to the Joint Lead Underwriters, the Hong Kong
Underwriters and the International Underwriters that, during the period starting from the Listing Date and
ending on and including the date which is 180 days after the Listing Date, without the prior written consent
of the Joint Lead Underwriters (on their own behalf and on behalf of the Hong Kong Underwriters and the
International Underwriters), they will not (and will procure that their subsidiaries will not) whether
conditionally or unconditionally:
      (a)   dispose of (i) any Units held by them as of the date of this Offering Circular (‘‘KP 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 KP Units; or
      (b)   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 KP Units or any securities
            exchangeable or convertible into any KP Units; or
      (c)   dispose of any direct or indirect interest in any company or entity holding any KP Units or any
            securities exchangeable or convertible into any KP Units; or
      (d)   offer or agree to do any of the foregoing or announce any intention to do so,
provided that these restrictions do not apply to (A) any sale or transfer by Kerry Properties or KP Holder
pursuant to the exercise of the Over-allotment Option; (B) any unit lending agreement with the Stabilizing
Manager; or (C) the transfer of the KP Units by Kerry Properties and/or KP Holder to and between wholly-
owned subsidiaries of Kerry Properties provided that each such subsidiary has executed and delivered to the
Joint Lead Underwriters, the Hong Kong Underwriters and the International Underwriters an undertaking to
the effect of the above restrictions to remain in effect for the remainder of such 180-day period.
      In the event of a transfer permitted under sub-paragraph (C) above, Kerry Properties and KP Holder
have further agreed that they shall not, for the remainder of such 180-day period, offer, issue, sell or contract
to issue or sell or otherwise dispose of, directly or indirectly, any shares in or any securities convertible into
or exchangeable for shares in, the share capital of the relevant wholly-owned subsidiary to which any
KP Units have been so transferred.

  Wing Tai
       Pursuant to a letter of undertaking provided by Wing Tai to the Joint Lead Underwriters, the
Hong Kong Underwriters and the International Underwriters, Wing Tai has undertaken to the Joint Lead
Underwriters, the Hong Kong Underwriters and the International Underwriters that, during the period
starting from the Listing Date and ending on and including the date which is 180 days after the Listing Date,

                                                       212
                                               UNDERWRITING

without the prior written consent of the Joint Lead Underwriters (on their own behalf and on behalf of the
Hong Kong Underwriters and the International Underwriters), it will not (and will procure that its
subsidiaries will not) whether conditionally or unconditionally:
      (a)   dispose of (i) any Units held by it as of the date of this Offering Circular (‘‘Wing Tai 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 Wing Tai Units; or
      (b)   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 Wing Tai Units or any securities exchangeable
            or convertible into any Wing Tai Units; or
      (c)   dispose of any direct or indirect interest in any company or entity holding any Wing Tai Units or any
            securities exchangeable or convertible into any Wing Tai Units; or
      (d)   offer or agree to do any of the foregoing or announce any intention to do so,
provided that these restrictions do not apply to (A) any sale or transfer by Wing Tai pursuant to the exercise of
the Over-allotment Option; (B) any unit lending agreement with the Stabilizing Manager; or (C) the transfer of
the Wing Tai Units by Wing Tai to and between wholly-owned subsidiaries of Wing Tai provided that each such
subsidiary has executed and delivered to the Joint Lead Underwriters, the Hong Kong Underwriters and the
International Underwriters an undertaking to the effect of the above restrictions to remain in effect for the
remainder of such 180-day period.
       In the event of a transfer permitted under sub-paragraph (C) above, Wing Tai has further agreed that it shall
not, for the remainder of such 180-day period, offer, issue, sell or contract to issue or sell or otherwise dispose
of, directly or indirectly, any shares in or any securities convertible into or exchangeable for shares in, the share
capital of the relevant wholly-owned subsidiary to which any Wing Tai Units have been so transferred.

Commission and Expenses
      Under the terms and conditions of the Hong Kong Underwriting Agreement, the fees and commissions
to which the Underwriters are entitled will comprise an underwriting commission of 2.5% of the aggregate
Offer Price of the Hong Kong Public Offering Units underwritten pursuant to the Hong Kong Underwriting
Agreement. The Manager has agreed to use its best endeavours to cause the Trustee on behalf of Champion
REIT and out of the assets of Champion REIT to pay, failing which the Manager shall pay, the expenses of
the Global Offering (including underwriting fees and expenses, consultancy fees and expenses, legal and
other professional fees and expenses, brokerage, the SFC transaction levy, the Hong Kong Stock Exchange
trading fee and printing costs).
      In addition, the Joint Lead Underwriters will together receive for themselves only an additional fee of
up to 10% of an amount which is equal to 45% of the amount, if any, by which the Implied Purchase Price
is greater than HK$20,000,000,000, payable to the Joint Lead Underwriters by the Vendor Companies.

UNDERWRITERS’ INTEREST IN CHAMPION REIT
      Save for its obligation under the relevant Underwriting Agreements 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 Champion 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 Champion REIT, the
Trustee or the Manager.
      Citibank, N.A., an affiliate of Citigroup Global Markets Asia Limited, one of the Joint Lead
Underwriters, was the single largest tenant of the Property as of February 28, 2006, leasing an aggregate
area of 278,519 sq. ft. and contributing approximately 20.0% of Rental Income for February 2006. Under
the tenancy agreements with Citibank, N.A., the lease term with respect to 235,455 sq. ft. will initially

                                                        213
                                             UNDERWRITING

expire in the second quarter of 2010, subject to a rent review for 235,073 sq. ft. of the office space in the
second quarter of 2007. Although Citibank, N.A. has an option to renew either one or both lots comprising
174,173 sq. ft. and 61,282 sq. ft. for a further three years until the second quarter of 2013 at market rates, it
has made no commitment to do so. The tenancies with respect to the remaining 43,064 sq.ft. will expire in
the second quarter of 2007. Although Citibank, N.A. has the option to renew each of these tenancies for two
further terms of three years each at market rates, until the second quarter of 2013, it has made no
commitment to do so.

      Together with a number of other lenders, Citibank, N.A. entered into a loan agreement dated June 22,
2001 with The Great Eagle Finance Company, Limited, a company wholly-owned by Great Eagle. The full
amount owing to Citibank, N.A. as at the Latest Practicable Date is HK$830 million. This amount will be
repaid to Citibank, N.A. on the Listing Date.

      Together with a number of other lenders, Citibank, N.A. entered into a loan agreement dated
November 21, 2003 with Missleton Finance Limited, a company owned by Great Eagle (85.93%), Kerry
Properties (10.16%) and Wing Tai (3.91%). The full amount owing to Citibank, N.A. as at the Latest
Practicable Date is HK$3,025 million. This amount will be repaid to Citibank, N.A. on the Listing Date.

      Citibank, N.A. and J.P. Morgan Chase Bank, N.A., an affiliate of J.P. Morgan Securities Ltd., one of
the Joint Lead Underwriters, are each a lender under the term loan facility and revolving credit facility
comprising the Facility, with an aggregate lending commitment of HK$900 million each.

      Merrill Lynch (Asia Pacific) Limited, an affiliate of Merrill Lynch Far East Limited, one of the Joint
Lead Underwriters, was the second largest tenant of the Property as of February 28, 2006, leasing an
aggregate area of 131,050 sq. ft. and contributing approximately 19.5% of Rental Income for February
2006. Under the tenancy agreements with Merrill Lynch (Asia Pacific) Limited, the lease term will expire in
the third quarter of 2008. In addition, Merrill Lynch (Asia Pacific) Limited entered into a new lease in
March, 2006 for an additional 6,814 sq. ft. of space at the Property for the period March 1, 2006 to
September 30, 2008.

      Merrill Lynch Capital Markets Bank Limited, an affiliate of Merrill Lynch Far East Limited, has
entered into an interest rate swap agreement with each of the New Property Companies, backed up by a
guarantee provided by Merrill Lynch & Co., Inc. Upfront swap payments of HK$1,417.0 million in
aggregate will be paid by the New Property Companies to Merrill Lynch Capital Markets Bank Limited on
the Listing Date in relation to the interest swap agreements. Under the interest rate swaps, Merrill Lynch
Capital Markets Bank Limited will pay the New Property Companies on a quarterly basis an aggregate
amount equivalent to the floating rate interest payable in respect of the term loan under the Facility
Agreement. In return, the New Property Companies will pay fixed interest rates on the notional amount of
their respective interest rate swap agreements to the swap counterparty. See the section headed ‘‘Certain
Factors Affecting Future Results of Operations and Financial Condition — Change in Nature of Existing
Costs — Finance Costs and Interest Rate Swaps’’ in this Offering Circular.

THE INTERNATIONAL OFFERING

       In connection with the International Offering, the Manager expects to enter into the International
Underwriting Agreement with the Joint Lead Underwriters and the International Underwriters on or prior to
the Price Determination Date. Under the International Underwriting Agreement, the International
Underwriters will severally agree to subscribe or procure subscribers for the International Offering Units
initially being offered in the International Offering.




                                                      214
                             STRUCTURE OF THE GLOBAL OFFERING


THE GLOBAL OFFERING

      The Global Offering comprises the Hong Kong Public Offering, the International Offering and the              B8
Preferential Offering. A total of 1,234,219,752 Units will initially be made available under the Global
Offering which consists of:

     (a)    the Hong Kong Public Offering of 123,422,000 Units (subject to adjustment and reallocation as
            mentioned below) in Hong Kong as described below under the sub-section headed ‘‘The Hong
            Kong Public Offering’’;

     (b)    the International Offering of 1,110,797,752 Units (subject to adjustment and reallocation as
            mentioned below) as described below under the sub-section headed ‘‘The International
            Offering’’. The Reserved Units being offered under the Preferential Offering are offered out of
            the Units being offered under the International Offering; and

     (c)    the Preferential Offering of 53,822,174 Reserved Units (subject to adjustment and reallocation
            as mentioned below) which is being extended to Qualifying Great Eagle Shareholders, as
            described below under the sub-section headed ‘‘The Preferential Offering’’.

       Investors may apply for Units under the Hong Kong Public Offering or indicate an interest, if qualified
to do so, for Units under the International Offering, but not under both (except those eligible to apply for
Reserved Units in the Preferential Offering may also apply for Units under the Hong Kong Public Offering
if eligible). Investors may only receive Units under either the International Offering or the Hong Kong
Public Offering, but not under both (except those receiving Reserved Units under the Preferential Offering
may also receive Units under the Hong Kong Public Offering if eligible). The Hong Kong Public Offering is
open to members of the public in Hong Kong as well as to institutional and professional investors in Hong
Kong. 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, in each case,
in Hong Kong and other jurisdictions outside the United States in offshore transactions in reliance on
Regulation S and in the United States to QIBs in reliance on Rule 144A or other applicable exemptions
from the registration requirements of the US Securities Act. Professional investors generally include
brokers, dealers and 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. The Preferential Offering is open to Qualifying Great Eagle Shareholders only.

     The number of Units to be offered under the Hong Kong Public Offering, the International Offering
and the Preferential Offering may be subject to reallocation as described below in this section.

ALLOCATION

      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, May 16, 2006.

       Allocation of the Units pursuant to the International Offering will be determined by the Joint Lead
Underwriters 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 Units, 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 Champion REIT and the Unitholders as a whole.

                                                      215
                             STRUCTURE OF THE GLOBAL OFFERING

      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’’), the allocation of Hong Kong
Public 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 Hong Kong
Public Offering Units, and those applicants who are not successful in the ballot may not receive any
Hong Kong Public Offering Units.

DETERMINING THE OFFER PRICE

     The Offer Price is expected to be determined by agreement between the Joint Lead Underwriters (on
behalf of the Underwriters), Great Eagle and the Manager on the Price Determination Date, following
completion of the book-building process for the International Offering and after assessment of the level of
market demand for the Global Offering. The Price Determination Date is expected to be May 16, 2006.

      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 and the Preferential Offering. The Joint Lead
Underwriters, 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 Great Eagle 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 and the Preferential Offering. In such a case, notices of the reduction
in the indicative Offer Price range will be published in The Standard (in English) and 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 and the Preferential 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 Lead Underwriters
with Great Eagle 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 under the Hong Kong Public Offering and the
Preferential Offering have been submitted prior to the day which is the last day for lodging
applications under the Hong Kong Public Offering and the Preferential 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 Standard (in English) and 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 and the
Preferential Offering, the Offer Price will under no circumstances be set outside the Offer Price range as
stated in this Offering Circular.

      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 and the Preferential 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, is expected to be
published on or before May 23, 2006.




                                                     216
                             STRUCTURE OF THE GLOBAL OFFERING

PRICE PAYABLE ON APPLICATION UNDER HONG KONG PUBLIC OFFERING AND
PREFERENTIAL OFFERING
     The Offer Price will not be more than HK$5.75 and is currently expected to be not less than HK$5.00.
Applicants for Hong Kong Public Offering Units and Reserved Units are required to pay, on application, the         B7/
Maximum Offer Price of HK$5.75 per Hong Kong Public Offering Unit or Reserved Unit together with                   B8
brokerage of 1%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.005%,
amounting to a total of HK$5,808.08 per board lot of 1,000 Units.
      If the Offer Price, as finally determined in the manner described in the sub-section headed
‘‘Determining the Offer Price’’ above, 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 Reserved Units’’ and ‘‘Further
Terms and Conditions of the Hong Kong Public Offering and the Preferential Offering’’ in this Offering
Circular.

CONDITIONS OF THE HONG KONG PUBLIC OFFERING AND THE PREFERENTIAL
OFFERING
    All acceptances of applications for Hong Kong Public Offering Units and Reserved Units in the Hong
Kong Public Offering and the Preferential Offering are conditional upon, among other matters:
     (a)   Listing
           The Hong Kong Stock Exchange granting listing of, and permission to deal in, all the Units to be
     issued as mentioned herein;
     (b)   Facility Agreement Unconditional
           The Facility Agreement having become and remaining unconditional in accordance with its
     terms, and the Facility having been unconditionally made available to be drawn down in the amount of
     not less than HK$7,200 million;
     (c)   International Underwriting Agreement
           The International Underwriting Agreement having been duly executed by all parties thereto;
     (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 Lead Underwriters for and on behalf of the Underwriters) and neither Underwriting Agreement
     being terminated in accordance with its terms or otherwise;
     (e)   SFC Authorization
           The SFC having authorized this Offering Circular and the application forms pursuant to
     section 105 of the SFO; and
     (f)   Pricing
           The Offer Price being duly determined,
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).
     The consummation of each of the International Offering (including the Preferential 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 their terms.

                                                      217
                             STRUCTURE OF THE GLOBAL OFFERING

      If the above conditions are not fulfilled or waived prior to the times and dates specified, the Global
Offering will lapse 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 Standard (in English) and 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 and Reserved
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 May 23, 2006 but will only become valid at
8:00 a.m. on May 24, 2006 provided that: (a) the Global Offering has become unconditional in all                    B9
respects; and (b) the right of termination as described in the section headed ‘‘Underwriting — Hong
Kong Underwriting Agreement — Grounds for Termination by the Hong Kong Underwriters’’ in this
Offering Circular has not been exercised.

THE HONG KONG PUBLIC OFFERING
      The Hong Kong Public Offering is a fully underwritten public offer (subject to satisfaction or waiver
of the conditions described in the sub-section above headed ‘‘Conditions of the Hong Kong Public Offering
and the Preferential Offering’’) for the subscription in Hong Kong of, initially, 123,422,000 Units
(representing approximately 10% of the total number of Units initially available under the Global Offering)
at the Offer Price.
      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 Hong Kong Public Offering Units will be allocated on an
equitable basis to successful applicants within this pool) 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 (and Hong Kong Public Offering Units will be allocated on an equitable basis to successful
applicants within this pool). The number of Hong Kong Public Offering Units comprised in each of Pool A
and Pool B will be divided equally between the two pools.
      Applicants should be aware that applications in Pool A and applications in Pool B may receive
different allocation ratios. 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 half of
the Hong Kong Public Offering Units initially available under the Hong Kong Public Offering (that is,
61,711,000 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 (except for any Reserved Units under the Preferential 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.
      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 Joint Lead Underwriters, be
published in The Standard (in English) and Hong Kong Economic Times (in Chinese) on Tuesday, May 23,

                                                      218
                                  STRUCTURE OF THE GLOBAL OFFERING

2006 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 and the Preferential Offering, and the
basis of allocations of the Hong Kong Public Offering Units.
     The allocation of Units between the Hong Kong Public Offering and the International Offering is
subject to adjustment by the Joint Lead Underwriters. The number of Units initially available under the
Hong Kong Public Offering will be approximately 10% of the total number of Units available under the
Global Offering (before taking into account any exercise of the Over-allotment Option).
      In addition, 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 370,266,000 Units (representing at least 30% of the Units initially available under the Global
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 493,688,000 Units (representing at least 40% of the Units initially available
under the Global 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 617,110,000 Units (representing at least 50% of the Units initially available under the Global
Offering).
Units validly applied for under the Hong Kong Public Offering                     Post ‘‘clawback’’(1)     Post ‘‘clawback’’(2)
(as a multiple of the 123,422,000 Units initially available)                            At least                 At least

At least 15 times but less than 50 times ********************                         370,266,000                     30%
At least 50 times but less than 100 times *******************                         493,688,000                     40%
At least 100 times **************************************                             617,110,000                     50%

Notes:
(1)   Expressed as the total number of Units to be available under the Hong Kong Public Offering post ‘‘clawback’’.
(2)   Units available under the Hong Kong Public Offering expressed as an approximate percentage of the total number of Units
      available under the Global Offering, before exercise of the Over-allotment Option.

         The number of the Reserved Units will not be affected by such reallocations.
     In addition, in the event of an under-subscription in the Hong Kong Public Offering, the Joint Lead
Underwriters will have the discretion to reallocate to the International Offering such number of
unsubscribed Hong Kong Public Offering Units as it may deem appropriate.
      The Manager, the Directors and the Hong Kong Underwriters will take reasonable steps to identify
and reject applicants under the Hong Kong Public Offering from investors who have received Units in the
International Offering, and to identify and reject indications of interest in the International Offering from
investors who have received Units in the Hong Kong Public Offering.

THE INTERNATIONAL OFFERING
      A total of 1,110,797,752 Units will initially be available to investors under the International Offering,
including the Reserved Units. These 1,110,797,752 Units represent approximately 90% of the Units
available under the Global Offering (before taking into account any exercise of the Over-allotment Option).
Pursuant to the International Offering, the International Offering Units will be offered to institutional,

                                                              219
                            STRUCTURE OF THE GLOBAL OFFERING

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 and in
the United States to QIBs in reliance on Rule 144A.
      In addition, the International Offering 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.
      The Reserved Units being offered under the Preferential Offering are offered out of the Units being
offered under the International Offering.

The Preferential Offering
      In order to enable shareholders of Great Eagle to participate in the Global Offering on a preferential
basis as to allocation only, Qualifying Great Eagle Shareholders are being invited to apply for an aggregate
of 53,822,174 Reserved Units (representing approximately 4.4% of the Units initially available under the
Global Offering and approximately 2.0% of the Units in Champion REIT upon completion of the Global
Offering) in the Preferential Offering on the basis of an Assured Entitlement of one Reserved Unit for every
whole multiple of 4 Great Eagle Shares held by them at the close of business on May 8, 2006. Any
Qualifying Great Eagle Shareholder holding less than 4 Great Eagle Shares at the close of business on
May 8, 2006 will not be entitled to apply for any Reserved Unit. The Reserved Units are being offered out
of the Units being offered under the International Offering.
     The Assured Entitlements may represent Units not in a multiple of a full board lot of
1,000 Units, and dealings in odd lot Units may be at or below their prevailing market price.
      A BLUE Application Form is being dispatched to each Qualifying Great Eagle Shareholder, together
with an electronic copy of this Offering Circular on CD ROM. Qualifying Great Eagle Shareholders are
permitted to apply for a number of Reserved Units which is equal to or less than their Assured Entitlement
under the Preferential Offering. A valid application in respect of a number of Reserved Units equal to or less
than a Qualifying Great Eagle Shareholder’s Assured Entitlement will be accepted in full, subject to the
terms and conditions as mentioned on the BLUE Application Forms. If an application is made for a number
of Reserved Units greater than the Assured Entitlement, the Assured Entitlement will be satisfied in full but
the excess portion of such application will not be met and the excess application monies will be refunded. If
an application is made for a number of Reserved Units less than the Assured Entitlement, the applicant is
recommended to apply for a number in one of the multiples of full board lots stated in the table of
multiples and payments on the back page of the BLUE Application Form which also states the amount of
remittance payable on application for each multiple of full board lots of Reserved Units; if such applicant
does not follow this recommendation when applying for less than the Assured Entitlement, he/she/it must
calculate the correct amount of remittance payable on application for the number of Reserved Units applied
for by using the formula set out below the table of multiples and payments on the back page of the BLUE
Application Form. Any application not accompanied by the correct amount of application monies will be
treated as invalid in its entirety and no Reserved Unit will be allotted to such applicant. The Joint Lead
Underwriters, on behalf of the Underwriters, will allocate any Assured Entitlements not taken up by
Qualifying Great Eagle Shareholders to the International Offering.
     In addition to any application for Reserved Units, Qualifying Great Eagle Shareholders will be entitled
to make one application for the Hong Kong Public Offering Units on WHITE or YELLOW Application
Forms or by giving electronic application instructions to HKSCC via CCASS. Qualifying Great Eagle
Shareholders will receive no preference as to entitlement or allocation in respect of applications for Hong
Kong Public Offering Units made on WHITE or YELLOW Application Forms or by giving electronic
application instructions to HKSCC under the Hong Kong Public Offering.

                                                     220
                             STRUCTURE OF THE GLOBAL OFFERING

     Assured Entitlements of Qualifying Great Eagle Shareholders are not transferable and there
will be no trading in nil-paid entitlements on the Hong Kong Stock Exchange. The Joint Lead
Underwriters have the authority to reallocate all or any Reserved Units not taken up by Qualifying
Great Eagle Shareholders to the International Offering.
      The procedure for application under, and the terms and conditions of, the Preferential Offering are set
out in the sections headed ‘‘How to Apply for Hong Kong Pubic Offering Units and Reserved Units — How
to apply for Reserved Units’’ and ‘‘Further Terms and Conditions of the Hong Kong Public Offering and the
Preferential Offering’’ and on the BLUE Application Form.
      The documents to be issued in connection with the Hong Kong Public Offering and the Preferential
Offering (comprising this Offering Circular and the Application Forms) will not be registered under any
applicable securities legislation of any jurisdiction other than Hong Kong. Accordingly, no Reserved Units
are being offered to Overseas Great Eagle Shareholders under the Preferential Offering and no BLUE
Application Forms will be sent to such persons. Applications will not be accepted from Overseas Great
Eagle Shareholders or persons who are acting for the benefit of Overseas Great Eagle Shareholders.

OVER-ALLOTMENT OPTION AND STABILIZATION
  The Over-allotment Option
       In connection with the Global Offering and in connection with over-allotments in the International
Offering, if any, and other stabilizing action in respect of the Units, GE Holder (together with Great Eagle
as guarantor), KP Holder (together with Kerry Properties as guarantor) and Wing Tai are expected to grant
to the International Underwriters the Over-allotment Option, which is exercisable on one occasion at any
time from the Listing Date up to 5:00 p.m. (Hong Kong time) on the date which is the 30th day after the last
day for lodging Application Forms under the Hong Kong Public Offering. Pursuant to the Over-allotment
Option, GE Holder (together with Great Eagle as guarantor), KP Holder (together with Kerry Properties as
guarantor) and Wing Tai are required to make available up to 165,619,949, 14,088,618 and 5,424,396 Units,
respectively, representing approximately 13.4%, 1.1% and 0.4%, respectively, of the total number of Units
initially available under the Global Offering, to be offered to investors as part of the International Offering.
In the event that the Over-allotment Option is exercised, an announcement will be published in The
Standard (in English) and Hong Kong Economic Times (in Chinese).

  Stabilizing Action
      In connection with the Global Offering, the Stabilizing Manager (or any person acting for it) on behalf
of the Underwriters, may over-allot 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. However, there is no obligation on the
Stabilizing Manager (or any person acting for it) to do this. Such transactions, if commenced, may be
discontinued at any time and are required to be brought to an end upon expiry of such 30-day period. The
Stabilizing Manager has been or will be appointed as stabilizing manager for the purposes of the Global
Offering and will conduct any stabilizing activities, if any, on a basis as disclosed in this section headed
‘‘— Over-allotment Option and Stabilization’’ and equivalent to that required under the Securities and
Futures (Price Stabilizing) Rules made under the SFO and, should stabilizing transactions be effected in
connection with the Global Offering, this will be at the absolute discretion of the Stabilizing Manager.
     Following any over-allotment of Units in connection with the Global Offering, the Stabilizing
Manager or any person acting for it may cover such over-allotment 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-allotment Option in full or in part, making unit
borrowing arrangements or by any combination of the above. Any such secondary market purchases will be
made in compliance with all applicable laws and regulatory requirements and on a basis consistent with the

                                                      221
                            STRUCTURE OF THE GLOBAL OFFERING

Securities and Futures (Price Stabilizing) 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 under the
Over-allotment Option, being 185,132,963 Units representing approximately 15% of the Units initially
available under the Global Offering.

      In order to facilitate settlement of over-allotments in connection with the International Offering, the
Stabilizing Manager is expected to enter into a Unit Borrowing Deed with, among others, GE Holder
(together with Great Eagle as guarantor), KP Holder (together with Kerry Properties as guarantor) and
Wing Tai. Under the Unit Borrowing Deed, GE Holder (together with Great Eagle as guarantor), KP Holder
(together with Kerry Properties as guarantor) and Wing Tai are expected to agree with the Stabilizing
Manager that they will, if requested by the Stabilizing Manager and subject to the terms of the Unit
Borrowing Deed, make available to the Stabilizing Manager up to 165,619,949, 14,088,618 and
5,424,396 Units, respectively, by way of unit lending, in order to cover over-allotments in connection with
the International Offering.

      The possible stabilizing action which may be taken by the Stabilizing Manager in connection with the
Global Offering may involve, among other things: (a) over-allotment of Units for the purpose of preventing
or minimizing any reduction in the market price of the Units; (b) selling or agreeing to sell Units so as to
establish a short position in them for the purpose of preventing or minimizing any reduction in the market
price of the Units; (c) borrowing Units or exercising the Over-allotment Option in order to close out any
position established under (a) or (b) above; (d) purchasing or agreeing to purchase Units for the sole purpose
of preventing or minimizing any reduction in the market price of the Units; (e) selling or agreeing to sell
Units purchased by the Stabilizing Manager in the course of primary stabilizing action in order to liquidate a
long position established as a result of those purchases; and (f) offering or attempting to do any of the
foregoing.

     Specifically, prospective applicants for and investors in Units should note that:

     (    the Stabilizing Manager may, in connection with the stabilizing action, maintain a long position
          in the Units. There is no certainty regarding the extent to which and the time period for which the
          Stabilizing Manager will maintain such a position;

     (    liquidation of any such long position by the Stabilizing Manager may have an adverse impact on
          the market price of the Units;

     (    no stabilizing action will be taken to support the price of the Units for longer than the stabilizing
          period which will begin on the Listing Date, and is expected to expire at the end of June 15,
          2006, being the day which is expected to be the 30th day after the last day for lodging
          applications 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 the taking of any stabilizing action; and

     (    stabilizing bids may be made or transactions effected in the course of the stabilizing action at any
          price at or below the Offer Price, which means that stabilizing bids may be made or transactions
          effected at a price below the price paid by applicants for, or investors in, the Units.




                                                     222
                             STRUCTURE OF THE GLOBAL OFFERING

      These activities by the Stabilizing Manager may stabilize, maintain or otherwise affect the market
price of the Units. As a result, the price of the Units may be higher than the price that otherwise might exist
in the open market. Any stabilizing action taken by the Stabilizing Manager, or any person acting for it, may
not necessarily result in the market price of the Units staying at or above the Offer Price either during or
after the stabilizing period. Bids for or market purchases of the Units by the Stabilizing Manager, or any
person acting for it, may be made at a price at or below the Offer Price and therefore at or below the price
paid for the Units by investors in the Global Offering.
     The Manager will ensure or procure that a public announcement, on a basis consistent with the
Securities and Futures (Price Stabilizing) Rules as if those rules were directly applicable, will be made
within seven days of the expiration of the stabilizing period.




                                                     223
                                                EXPERTS


                                                                                                               B22
       This section sets out details of the reports prepared by various experts. The Manager and the
  Joint Lead Underwriters have reviewed the reports prepared by these experts.
       Savills, Savills Project Consultancy Limited, Colliers and Deloitte Touche Tohmatsu 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 memoranda 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.

      Savills was responsible for (a) conducting a valuation of the entire portfolio of the Property;
(b) producing a comprehensive report in relation to the findings thereof; and (c) reviewing the forecasts of
rental income for the Property and assumptions used by the Manager for the purposes of the profit forecast
of Champion REIT for the FY06 Distribution Period as set out in the section headed ‘‘Profit Forecast’’ in
this Offering Circular. The Letter from the Independent Property Valuer in Relation to Rental Income
included in Appendix IV to this Offering Circular and the Independent Property Valuer’s Valuation Report
included in Appendix V to this Offering Circular, have been prepared by Savills.
     Savills Project Consultancy Limited was responsible for carrying out a buildings survey report and
prepared the Letter from the Building Surveyor in Relation to its Building Survey Report included in
Appendix VII to this Offering Circular.
      Colliers was responsible for carrying out a comprehensive study of the office property market in Hong
Kong and for producing a comprehensive report and the executive summary in relation to the findings
thereof. The Letter from Colliers in Relation to the Grade A Office Market in Hong Kong and in the Central
District included in Appendix VI to this Offering Circular and the executive summary in the section headed
‘‘Grade A Office Market in Hong Kong and in the Central District’’ in this Offering Circular have been
prepared by Colliers, and the section headed ‘‘Offering Circular Summary — Overview of the Grade A
Office Market in Hong Kong and in the Central District’’ in this Offering Circular has been extracted from
Colliers’ report.
     Deloitte Touche Tohmatsu is a firm of certified public accountants and are the reporting accountants
and auditors for the Group Companies.




                                                    224
                          HOW TO APPLY FOR HONG KONG PUBLIC
                           OFFERING UNITS AND RESERVED UNITS

I.   HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS                                                  B11
     There are two ways to make an application for the Hong Kong Public Offering Units:
     (    you may use a WHITE or YELLOW Application Form; or
     (    you may electronically instruct HKSCC via CCASS to cause HKSCC Nominees to apply for the
          Hong Kong Public Offering Units on your behalf.
      Except where you are a nominee and provide the required information in your application, you,
or you and your joint applicant(s), may not make more than one application (whether individually or
jointly) by applying on a WHITE or YELLOW Application Form or by giving electronic application
instructions to HKSCC.
     1.   Which application method to use
          (a)   WHITE Application Forms
               Use a WHITE Application Form if you want the Hong Kong Public Offering Units issued
          in your own name.
          (b)   YELLOW Application Forms
                Use a YELLOW Application Form if you want the Hong Kong Public Offering Units
          issued in the name of HKSCC Nominees and deposited directly into CCASS for credit to your
          CCASS Investor Participant stock account or your designated CCASS Participant’s stock
          account.
          (c)   Instruct HKSCC to make an electronic application on your behalf via CCASS
                Instead of using a YELLOW Application Form, you may electronically instruct HKSCC
          to cause HKSCC Nominees to apply for Hong Kong Public Offering Units on your behalf via
          CCASS. Any Hong Kong Public Offering Units allocated to you will be registered in the name
          of HKSCC Nominees and deposited directly into CCASS for credit to your CCASS Investor
          Participant stock account or your designated CCASS Participant’s stock account.
     2.   Where to collect the WHITE and YELLOW Application Forms
          (a) You can collect a WHITE Application Form and an offering circular during normal
          business hours from 9:00 a.m. on Thursday, May 11, 2006 until 12:00 noon on Tuesday,
          May 16, 2006 from:
                Any participant of the Hong Kong Stock Exchange

                Merrill Lynch Far East Limited          17/F, ICBC Tower, 3 Garden Road, Central,
                                                        Hong Kong

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

                J.P. Morgan Securities Ltd.             28/F, Chater House 8 Connaught Road,
                                                        Central, Hong Kong

                Core Pacific — Yamaichi International   36/F Cosco Tower, Grand Millennium Plaza
                (H.K.) Limited                          183 Queen’s Road Central, Hong Kong

                Dao Heng Securities Limited             12/F, The Center,
                                                        99 Queen’s Road Central, Hong Kong

                                                 225
           HOW TO APPLY FOR HONG KONG PUBLIC
            OFFERING UNITS AND RESERVED UNITS


Kingsway Financial Services Group       5/F, Hutchison House,
Limited                                 10 Harcourt Road, Central, Hong Kong

Shenyin Wanguo Capital (H.K.)           28/F, Citibank Tower, Citibank Plaza,
Limited                                 3 Garden Road, Central, Hong Kong

South China Securities Limited          28/F, Bank of China Tower,
                                        No. 1 Garden Road, Central, Hong Kong

or any of the following branches of:
The Bank of East Asia Limited:
Hong Kong Island:
Main Branch                             10 Des Voeux Road, Central
Causeway Bay Branch                     46 Yee Wo Street
North Point Branch                      326-328 King’s Road
Sai Wan Ho Branch                       Shop No. G1-G2, G/F, Tai On Building, No.
                                        57-87 Shaukiwan Road
Kowloon:
Kwun Tong Branch                        7 Hong Ning Road

Mongkok North Branch                    G/F, Kalok Building, 720-722 Nathan Road,
                                        Mongkok

Yaumatei Branch                         G/F, 526 Nathan Road, Kowloon
New Territories:
Ha Kwai Chung Branch                    202 Hing Fong Road

Shatin Plaza Branch                     Shop Nos. 3-4, Level 1, Shatin Plaza

Tai Po Branch                           62-66 Po Heung Street, Tai Po Market

Tuen Mun Town Plaza Branch              Shop Nos. 2-10, UG/F, Tuen Mun Town Plaza
                                        Phase II, 3 Tuen Lung Street, Tuen Mun

Hang Seng Bank Limited:
Hong Kong Island:
Head Office                             83 Des Voeux Road Central

Central District Branch                 Basement, Central Building, Pedder Street

Causeway Bay Branch                     28 Yee Woo Street

Wanchai Branch                          200 Hennessy Road




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           HOW TO APPLY FOR HONG KONG PUBLIC
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Kowloon:
Kowloon Main Branch               618 Nathan Road

Tsimshatsui Branch                18 Carnarvon Road

Kwun Tong Branch                  70 Yue Man Square

Yaumatei Branch                   363 Nathan Road
New Territories:
Shatin Branch                     Shop 18 Lucky Plaza, Wang Pok Street, Shatin

Tsuen Wan Branch                  289 Sha Tsui Road, Tsuen Wan

Yuen Long Branch                  93 Castle Peak Road
The Hongkong and Shanghai Banking Corporation Limited:
Hong Kong Island:

Hong Kong Main Branch             1 Queen’s Road Central, Central

Aberdeen Centre Branch            Shop 2, G/F, Site I, Aberdeen Centre,
                                  Aberdeen

Chai Wan Branch                   Shop No. 1-11, Block B, G/F, Walton Estate,
                                  Chai Wan

Hay Wah Building Branch           G/F, Hay Wah Building, 71-85B Hennessy
                                  Road, Wanchai
Kowloon:

Mong Kok Branch                   673 Nathan Road, Mong Kok

Kwun Tong Branch                  No. 1, Yue Man Square, Kwun Tong

Tsim Sha Tsui Branch              82-84 Nathan Road, Tsim Sha Tsui

San Po Kong Branch                35-49 Hong Keung Street, San Po Kong
New Territories:

Citylink Plaza Branch             Shops 38-46, Citylink Plaza, Shatin Station
                                  Circuit, Shatin

Yuen Long Branch                  G/F, HSBC Building Yuen Long, 150-160
                                  Castle Peak Road, Yuen Long

Kung Yip Street Branch            Unit A, 2-8 Kung Yip Street, Kwai Chung




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                     HOW TO APPLY FOR HONG KONG PUBLIC
                      OFFERING UNITS AND RESERVED UNITS

          Industrial and Commercial Bank of China (Asia) Limited:
          Hong Kong Island:
          Queen’s Road Central Branch               122-126 Queen’s Road Central

          Sheung Wan Branch                         Shop F, G/F, Kai Tak Commercial Building,
                                                    317-319 Des Voeux Road Central, Sheung
                                                    Wan

          West Point Branch                         242-244 Queen’s Road West, Sai Ying Pun

          Wanchai Branch                            117-123 Hennessy Road, Wanchai

          Causeway Bay Branch                       Shop A, G/F, Jardine Center, 50 Jardine’s
                                                    Bazaar, Causeway Bay
          Kowloon:
          Tsimshatsui East Branch                   Shop B, G/F, Railway Plaza, 39 Chatham
                                                    Road South, Tsimshatsui

          Mongkok Branch                            G/F, Belgian Bank Building, 721-725 Nathan
                                                    Road, Mongkok

          Prince Edward Branch                      777 Nathan Road, Mongkok

          Shamshuipo Branch                         G/F, 290 Lai Chi Kok Road, Shamshuipo
          New Territories:
          Sha Tsui Road Branch                      Shop 4, G/F, Chung On Building, 297-313 Sha
                                                    Tsui Road, Tsuen Wan

          Tseung Kwan O Branch                 Shop 2011, Level 2, Metro City, Plaza II, 8
                                               Yan King Road, Tseung Kwan O
     (b) You can collect a YELLOW Application Form and an Offering Circular during normal
     business hours from 9:00 a.m. on Thursday, May 11, 2006 until 12:00 noon on Tuesday,
     May 16, 2006 from:
          (a) the Depository Counter of HKSCC at 2nd Floor, Vicwood Plaza, 199 Des Voeux
               Road Central, Hong Kong; or
          (b) the Customer Service Centre of HKSCC at Upper Ground Floor, V-Heun Building,
               128-140 Queen’s Road Central, Hong Kong; or
          (c) your broker, who may have the Application Forms and the Offering Circular
               available.
3.   How to make applications
     (a) Applying by completing WHITE or YELLOW Application Forms:
         (i)  Obtain a WHITE or YELLOW Application Form as appropriate.
         (ii) 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.

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(iii)   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 authorized
        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 authorized attorney, the Joint Lead Underwriters
        (or their agents or nominees) may accept it at their discretion, and subject to any
        conditions as they think fit, including production of evidence of the authority of the
        attorney.
(iv)    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 authorized 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 ‘‘Hang Seng (Nominee) Limited — Champion REIT Public
             Offering’’;
        —    be crossed ‘‘Account Payee Only’’; and
        —    not be post-dated.
        An application is liable to be rejected if the cheque does not meet all of 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 authorized 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 ‘‘Hang Seng (Nominee) Limited — Champion REIT Public
             Offering’’;
        —    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
        of these requirements.
        No money shall be paid to any intermediary in Hong Kong who is not licensed or            B12
        registered to carry on Type 1 regulated activity under Part V of the SFO.

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(v)      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 Hong Kong Public Offering Units’’ below.
(vi) Multiple or suspected multiple applications are liable to be rejected. Please see the
     sub-section headed ‘‘How many applications you may make’’ below.
(vii) In order for the YELLOW Application Forms to be valid:
            —     If the application is made through a designated CCASS Participant (other
                  than a CCASS Investor Participant):
                  —      the designated CCASS Participant or its authorized 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 the application is made by an individual CCASS Investor Participant:
                  —      the Application Form must contain the CCASS Investor
                         Participant’s full name and Hong Kong identity card number; and
                  —      the CCASS Investor Participant must insert its participant I.D. and
                         sign in the appropriate box in the Application Form.
            —     If the application is made by a joint individual CCASS Investor Participant:
                  —      the Application Form must contain all joint CCASS Investor
                         Participants’ names and the Hong Kong identity card numbers of all
                         joint CCASS Investor Participants; and
                  —      the participant I.D. must be inserted and the authorized
                         signatory(ies) of the CCASS Investor Participant’s stock account
                         must sign in the appropriate box on the Application Form.
            —     If the application is made by a corporate CCASS Investor Participant:
                  —      the Application Form must contain the CCASS Investor
                         Participant’s company name and Hong Kong business registration
                         number; and
                  —      the participant I.D. and company chop (bearing its company name)
                         endorsed by its authorized signatories must be inserted in the
                         appropriate box in the Application Form.
            —     Signature(s), number of signatories and form of chop, where appropriate,
                  in each YELLOW Application Form, should match with the records kept
                  by HKSCC. Incorrect or incomplete details of the CCASS Participant or
                  the omission or inadequacy of authorized signatory(ies) or other similar
                  matters may render the application invalid.
(viii)     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

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                  OFFERING UNITS AND RESERVED UNITS

               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 you may make’’
               below.
(b)   Applying by giving electronic application instructions to HKSCC via CCASS:
      (i)    General
            CCASS Participants may give electronic application instructions to HKSCC 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 you are a CCASS Investor Participant, you may give electronic application
      instructions through the CCASS Phone System by calling 2979 7888 or the 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 you if you go to:
             HKSCC 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 you are not a CCASS Investor Participant, you may instruct your 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 on your behalf.
            You are deemed to have authorized HKSCC and/or HKSCC Nominees to transfer the
      details of your application, whether submitted by you or through your broker or custodian,
      to the Manager and our Unit Registrar.
      (ii)   Minimum application amount and permitted multiples
           You may give electronic application instructions in respect of a minimum of 1,000
      Hong Kong Public Offering Units. Such instructions must be in one of the multiples of
      Hong Kong Public Offering Units set out in the table on the WHITE and YELLOW
      Application Forms.
      (iii) Multiple applications
            If you are suspected of having made multiple applications or if more than one
      application is made for your 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 you have given such instructions and/or in
      respect of which such instructions have been given for your benefit. Any electronic
      instructions to make an application for Hong Kong Public Offering Units given by you or
      for your benefit to HKSCC shall be deemed to be an actual application for the purposes of
      considering whether multiple applications have been made. Please refer to the sub-section
      headed ‘‘How many applications you may make’’ below in this section for further details.

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             (iv) Allocation of Hong Kong Public Offering Units
                   For the purpose of allocating 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.
             (v)   Personal data
                   The section of the Application Form headed ‘‘Personal Data’’ applies to any personal
             data held by the Manager and our Unit Registrar about you in the same way as it applies to
             personal data about applicants other than HKSCC Nominees.
             (vi) Warning
                  The application for Hong Kong Public Offering Units by giving electronic
             application instructions to HKSCC is only a facility provided to CCASS Participants.
             The Manager and the Joint Lead Underwriters take no responsibility for the application
             and provide no assurance that any CCASS Participant will be allocated 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. In the event that CCASS Investor Participants have problems 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; or (b) go to HKSCC’s Customer Service Centre to complete an
             application instruction input request form before 12:00 noon on Tuesday, May 16, 2006 or
             such later time as stated in the sub-paragraph headed ‘‘Effect of bad weather on the
             opening of the application lists’’ below.
                The Manager, the Sole Global Coordinator, the Underwriters, other parties involved in
           the Global Offering and their respective directors, officers, employees, partners, agents and
           advisors are entitled to rely on any warranty, representation or declaration made by you in
           your application.
                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.
4.   How many applications you may make
     (a)     You may make more than one application for the Hong Kong Public Offering Units if
             and only if you are a nominee, in which case you may make an application by: (i) giving
             electronic application instructions to HKSCC via CCASS (if you are a CCASS
             Participant); or (ii) using a WHITE or YELLOW Application Form, and lodge more than
             one application in your own name on behalf of different beneficial owners. In the box on
             the Application Form marked ‘‘For nominees’’, you must include:
             —     an account number; or
             —     some other identification codes,
             for each beneficial owner or, in the case of joint beneficial owners, for each such beneficial
             owner. If you do not include this information, the application will be treated as being for
             your own benefit.

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                HOW TO APPLY FOR HONG KONG PUBLIC
                 OFFERING UNITS AND RESERVED UNITS

      If you are a Qualifying Great Eagle Shareholder applying for Reserved Units under the
      Preferential Offering on a BLUE Application Form, as beneficial owner, you may also
      make one application for Hong Kong Public Offering Units either on a WHITE or
      YELLOW Application Form or electronically through CCASS (if you are a CCASS
      Investor Participant or act through a CCASS Broker or Custodian Participant). However, in
      respect of any application for Hong Kong Public Offering Units using the above-mentioned
      methods, you will not enjoy the preferential treatment accorded to you under the
      Preferential Offering as described in the section headed ‘‘Structure of the Global
      Offering — the Preferential Offering’’ in this Offering Circular.
      Otherwise, multiple applications are not allowed.
(b)   It will be a term and condition of all applications under the Hong Kong Public Offering
      that by completing and delivering an Application Form you:
      —    (if the application is made for your own benefit) warrant that this is the only
           application which will be made for your benefit on a WHITE or YELLOW
           Application Form or by giving electronic application instructions to HKSCC; or
      —    (if you are an agent for another person) warrant that reasonable enquiries have been
           made of that other person that this 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, and that you are duly
           authorized to sign the Application Form (where relevant) as that other person’s agent.
(c)   Multiple applications or suspected multiple applications will be rejected. Save as referred
      to above, all of your applications (including the part of the application made by HKSCC
      Nominees acting on electronic application instructions) under the Hong Kong Public
      Offering will be rejected as multiple applications if you, or you and joint applicants
      together:
      —    make 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 via CCASS (if you are a CCASS Investor Participant or
           applying through a CCASS Broker or Custodian Participant); or
      —    apply on one WHITE or YELLOW Application Form or by giving electronic
           application instructions to HKSCC via CCASS (if you are a CCASS Investor
           Participant or applying through a CCASS Broker or Custodian Participant) for more
           than 61,711,000 Hong Kong Public Offering Units; or
      —    have indicated an interest for, or have been or will be issued International Offering
           Units under the International Offering (except in respect of Reserved Units under the
           Preferential Offering).
(d)   All of your applications under the Hong Kong Public Offering will also be rejected as
      multiple applications if more than one application is made for your 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:
      —    the principal business of that company is dealing in securities; and you
      —    exercise statutory control over that company,

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                        OFFERING UNITS AND RESERVED UNITS

           then the application will be treated as being for your benefit.

           Unlisted company means a company with no equity securities listed on the Hong Kong
           Stock Exchange.

           Statutory control means you:

           —       control the composition of the board of directors of that company; or

           —       control more than half the voting power of that company; or

           —       hold more than half 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).

5.   When to apply for Hong Kong Public Offering Units

     (a)   WHITE or YELLOW Application Forms

          Completed WHITE or YELLOW Application Forms, with payment attached, must be
     lodged by 12:00 noon on Tuesday, May 16, 2006, or, if the application lists are not open on that
     day, by the time and date stated in sub-paragraph (d) below.

          Your completed Application Form, 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 Bank
     of East Asia Limited, Hang Seng Bank Limited, The Hong Kong and Shanghai Banking
     Corporation Limited or Industrial and Commercial Bank of China (Asia) Limited listed above
     under the sub-paragraph headed ‘‘Where to collect the WHITE and YELLOW Application
     Forms’’ in this section at the following times:
               Thursday, May 11, 2006 ***********                9:00   a.m.   to   4:00 p.m.
               Friday, May 12, 2006**************                9:00   a.m.   to   4:00 p.m.
               Monday, May 15, 2006 ************                 9:00   a.m.   to   4:00 p.m.
               Tuesday, May 16, 2006 ************                8:00   a.m.   to   12:00 noon

     (b)   Electronic application instructions to HKSCC via CCASS

          CCASS Broker Participants and Custodian Participants should input electronic
     application instructions at the following times:
               Thursday, May 11, 2006 *******             9:00   a.m. to 8:30 p.m.(Note)
               Friday, May 12, 2006 **********            8:00   a.m. to 8:30 p.m.(Note)
               Saturday, May 13, 2006 ********            8:00   a.m. to 3:00 p.m.(Note)
               Monday, May 15, 2006 ********              8:00   a.m. to 8:30 p.m.(Note)
               Tuesday, May 16, 2006 ********             8:00   a.m.(Note) to 12:00 noon

           Note:
           These times are subject to change as HKSCC may determine from time to time with prior notification to CCASS
           Broker Participants and Custodian Participants.

          CCASS Investor Participants can input electronic application instructions from 9:00 a.m.
     on Thursday, May 11, 2006 until 12:00 noon on Tuesday, May 16, 2006 (24 hours daily except
     on the last application day).

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                           HOW TO APPLY FOR HONG KONG PUBLIC
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                 The latest time for inputting your electronic application instructions via CCASS (if you
           are a CCASS Participant) is 12:00 noon on Tuesday, May 16, 2006, or, if the application lists are
           not open on that day, by the time and date stated in paragraph (d) below.
           (c)   Application lists
                 The latest time for lodging the application is 12:00 noon on Tuesday, May 16, 2006, or if
           the application lists are not open on that day, then by 12:00 noon on the next day the lists are
           open. The application lists will be open from 11:45 a.m. to 12:00 noon on Tuesday, May 16,
           2006, except as provided in paragraph (d) below.
                 The application monies for the Hong Kong Public Offering Units will not be processed and
           no allocation of any such Hong Kong Public Offering Units will be made until the closing of the
           application lists.
           (d)   Effect of bad weather on the opening of the application lists
                 The application lists will not open if there is:
                 —    a tropical cyclone warning signal number 8 or above; or a
                 —    ‘‘black’’ rainstorm warning signal,
           in force at any time between 8:00 a.m. and 12:00 noon on Tuesday, May 16, 2006. Instead, the
           application lists will be open between 11:45 a.m. and 12:00 noon on the next Business Day
           which does not have either of those warnings in force in Hong Kong at any time between
           8:00 a.m. and 12:00 noon.
                For the purposes of this section, Business Day means a day that is not a Saturday, Sunday
           or public holiday in Hong Kong.

II.   HOW TO APPLY FOR RESERVED UNITS
      An application for Reserved Units under the Preferential Offering may only be made by Qualifying
Great Eagle Shareholders using a BLUE Application Form which is being dispatched to Qualifying Great
Eagle Shareholders by Great Eagle. Using the BLUE Application Form, Qualifying Great Eagle
Shareholders may apply on an assured basis for a number of Reserved Units equal to or less than their
Assured Entitlement. The Assured Entitlement for each Qualifying Great Eagle Shareholder will be
specified on their individual BLUE Application Form.
      A valid application in respect of a number of Reserved Units equal to or less than a Qualifying Great
Eagle Shareholder’s Assured Entitlement will be accepted in full. Qualifying Great Eagle Shareholders may
not apply for a number of Reserved Units in excess of their Assured Entitlement specified on their
individual BLUE Application Form. If an application is made for a number of Reserved Units greater than
their Assured Entitlement, the Assured Entitlement will be satisfied in full but the excess portion of such
application will not be met and the excess application monies will be refunded. If an application is made for
a number of Reserved Units less than the Assured Entitlement, the applicant is recommended to apply for a
number in one of the multiples of full board lots stated in the table of multiples and payments on the back
page of the BLUE Application Form which also states the amount of remittance payable on application for
each multiple of full board lots of Reserved Units; if such applicant does not follow this recommendation
when applying for less than the Assured Entitlement, he/she/it must calculate the correct amount of
remittance payable on application for the number of Reserved Units applied for by using the formula set out
below the table of multiples and payments on the back page of the BLUE Application Form. Any
application not accompanied by the correct amount of application monies will be treated as invalid in its
entirety and no Reserved Unit will be allotted to such applicant. Qualifying Great Eagle Shareholders who

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                         HOW TO APPLY FOR HONG KONG PUBLIC
                          OFFERING UNITS AND RESERVED UNITS

require a replacement BLUE Application Form should contact Computershare Hong Kong Investors
Services Limited at its hotline on 2862 8555.

    1.   Dispatch of BLUE Application Forms

              A BLUE Application Form is being dispatched to you if you are a Qualifying Great Eagle
         Shareholder with an Assured Entitlement.

    2.   How to complete the BLUE Application Forms

               There are detailed instructions on each BLUE Application Form. You should read these
         instructions carefully. If you do not follow the instructions, your application may be rejected and
         returned by ordinary post together with the accompanying cheque(s) or banker’s cashier order(s)
         to you at your own risk at the address stated in the BLUE Application Form.

               All Qualifying Great Eagle Shareholders who would like to apply for Reserved Units must
         complete the BLUE Application Form. Qualifying Great Eagle Shareholders are permitted to
         apply for a number of Reserved Units which is equal to or less than their Assured Entitlement
         under the Preferential Offering. A valid application in respect of a number of Reserved Units
         equal to or less than a Qualifying Great Eagle Shareholder’s Assured Entitlement will be
         accepted in full. If an application is made for a number of Reserved Units greater than the
         Assured Entitlement, the Assured Entitlement will be satisfied in full but the excess portion of
         such application will not be met and the excess application monies will be refunded. If an
         application is made for a number of Reserved Units less than the Assured Entitlement, the
         applicant is recommended to apply for a number in one of the multiples of full board lots stated
         in the table of multiples and payments on the back page of the BLUE Application Form which
         also states the amount of remittance payable on application for each multiple of full board lots of
         Reserved Units; if such applicant does not follow this recommendation when applying for less
         than the Assured Entitlement, he/she/it must calculate the correct amount of remittance payable
         on application for the number of Reserved Units applied for by using the formula set out below
         the table of multiples and payments on the back page of the BLUE Application Form. Any
         application not accompanied by the correct amount of application monies will be treated as
         invalid in its entirety and no Reserved Unit will be allotted to such applicant.

               If your application is made through a duly authorized attorney, the Manager and the Joint
         Lead Underwriters (on behalf of the International Underwriters) as its agents may accept it at
         their discretion and subject to any conditions they think fit, including evidence of the authority of
         your attorney.

               In order for the BLUE Application Form to be valid, Qualifying Great Eagle Shareholders
         should complete the BLUE Application Form and then deposit the completed BLUE
         Application Form, with one cheque or one banker’s cashier order as payment attached, in the
         special collection boxes provided at any of the branches of The Bank of East Asia Limited, Hang
         Seng Bank Limited, The Hong Kong and Shanghai Banking Corporation Limited or Industrial
         and Commercial Bank of China (Asia) Limited listed in the sub-paragraph above headed
         ‘‘Where to collect the WHITE and YELLOW Application Forms’’ or at Computershare Hong
         Kong Investor Services Limited, Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road
         East, Wanchai, Hong Kong, before the latest time for lodgement of the BLUE Application
         Forms, as specified in the sub-paragraph headed ‘‘When to apply for Reserved Units’’ below.

             If the application is accepted, the Reserved Units will be transferred to and registered in the
         name of the relevant Qualifying Great Eagle Shareholder.

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                          HOW TO APPLY FOR HONG KONG PUBLIC
                           OFFERING UNITS AND RESERVED UNITS

     3.   How many applications you may make
                Please see the sub-paragraph above ‘‘How many applications you may make’’ under the
          section ‘‘How to Apply for Hong Kong Public Offering Units’’ for the situations where you may
          make more than one application for Hong Kong Public Offering Units.
     4.   When to apply for Reserved Units
                Completed BLUE Application Forms, with payment attached, must be lodged by
          12:00 noon on Tuesday, May 16, 2006, or, if the application lists are not open on that day, by the
          time and date stated in the sub-paragraph headed ‘‘Effect of bad weather on the opening of
          application lists’’ below.
                Your completed BLUE Application Form, 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 Bank of East Asia Limited, Hang Seng Bank Limited, The Hong Kong and Shanghai
          Banking Corporation Limited or Industrial and Commercial Bank of China (Asia) Limited listed
          in the sub-paragraph above headed ‘‘Where to collect the WHITE and YELLOW Application
          Forms’’ or at Computershare Hong Kong Investor Services Limited, Shops 1712 – 1716, 17/F,
          Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, at the following times:
                   Thursday, May 11, 2006*******         9:00   a.m.   to   4:00 p.m.
                   Friday, May 12, 2006 *********        9:00   a.m.   to   4:00 p.m.
                   Monday, May 15, 2006********          9:00   a.m.   to   4:00 p.m.
                   Tuesday, May 16, 2006********         8:00   a.m.   to   12:00 noon
                The latest time for lodging the application is 12:00 noon on Tuesday, May 16, 2006, or if
          the application lists are not open on that day, then by 12:00 noon on the next day the lists are
          open. The application lists will be open from 11:45 a.m. to 12:00 noon on Tuesday, May 16,
          2006, except as provided in the sub-paragraph headed ‘‘Effect of bad weather on the opening of
          the application lists’’ below.
     5.   Effect of bad weather on the opening of the application lists
          The application lists will not be open 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 8:00 a.m. and 12:00 noon on Tuesday, May 16, 2006.
     Instead, the application lists will be open between 11:45 a.m. and 12:00 noon on the next Business
     Day which does not have either of those warnings in force in Hong Kong at any time between
     8:00 a.m. and 12:00 noon.
     For the purposes of this section, Business Day means a day that is not a Saturday, Sunday or public
holiday in Hong Kong.

III. HOW MUCH TO PAY FOR THE HONG KONG PUBLIC OFFERING UNITS AND
     RESERVED UNITS
      Applicants must pay the Maximum Offer Price of HK$5.75 per Hong Kong Public Offering Unit or             B14(a)
Reserved 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 or Reserved
Units. The Application Forms have tables showing the exact amount payable for multiples of Units applied

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                           HOW TO APPLY FOR HONG KONG PUBLIC
                            OFFERING UNITS AND RESERVED UNITS

for up to 61,711,000 Units in the case of the WHITE and YELLOW Application Forms and up to
53,822,174 Units in the case of the BLUE Application Forms.

      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 and SFC transaction
levy attributable to the surplus application monies) will be made to successful applicants without interest.

IV. PUBLICATION OF RESULTS

      The results of allocations of the Hong Kong Public Offering Units under the Hong Kong Public
Offering, which will include the Hong Kong identity card numbers, passport numbers or Hong Kong
business registration numbers of successful applicants (where supplied), and the results of the Preferential
Offering will be published in The Standard (in English) and Hong Kong Economic Times (in Chinese) on
Tuesday, May 23, 2006.

V.   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 or the Reserved 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 and the Preferential Offering’’ in this Offering Circular.

VI. COMMENCEMENT OF DEALINGS IN THE UNITS ON THE STOCK EXCHANGE

     Assuming that the Global Offering becomes unconditional at or before 8:00 a.m. in Hong Kong on
Wednesday, May 24, 2006, it is expected that dealings in the Units on the Hong Kong Stock Exchange are
expected to commence on Wednesday, May 24, 2006. Units will be traded on the Hong Kong Stock
Exchange in board lots of 1,000 Units each.

VII. UNITS WILL BE ELIGIBLE FOR CCASS

      Subject to the granting of listing of, and permission to deal in, the Units on the Hong Kong Stock
Exchange as well as the 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 on any other date
HKSCC chooses. Settlement of transactions between participants of the Hong Kong Stock Exchange is
required to take place in CCASS on the second 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.




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              FURTHER TERMS AND CONDITIONS OF THE HONG KONG
               PUBLIC OFFERING AND THE PREFERENTIAL OFFERING

I.    GENERAL
      1.   If an applicant applies for Hong Kong Public Offering Units in the Hong Kong Public
           Offering or for Reserved Units in the Preferential Offering, the applicant will be agreeing
           with the Manager and the Joint Lead Underwriters (on behalf of the Hong Kong
           Underwriters in respect of the Hong Kong Public Offering Units and on behalf of the
           International Underwriters in respect of the Reserved Units) as set out below.
      2.   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 authorized 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.
      3.   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 or for the Reserved
           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.
      4.   Applicants should, prior to making an application, read this Offering Circular carefully,
           including other terms and conditions of the Hong Kong Public Offering and the Preferential
           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 and Reserved Units’’ in
           this Offering Circular, contained in the relevant Application Form or imposed by HKSCC.

II.   OFFER TO ACQUIRE THE HONG KONG PUBLIC OFFERING UNITS AND RESERVED
      UNITS
      1.   Applicants offer to subscribe at the Offer Price for the number of the Hong Kong Public
           Offering Units or the Reserved 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.
      2.   For applicants using Application Forms, where applicable, a refund cheque in respect of the
           surplus application monies, if any, (a) relating to the Hong Kong Public Offering Units or
           Reserved Units applied for but not allocated to them and (b) 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, May 23, 2006. Details of the procedure for refunds
           are contained below in the sub-sections headed ‘‘If an application for the Hong Kong Public
           Offering Units or the Reserved Units is successful (in whole or in part)’’ and ‘‘Refund of
           money — additional information’’ in this section.
      3.   Any application may be rejected in whole or in part.
      4.   Applicants under the Hong Kong Public Offering and the Preferential Offering should note
           that, unless otherwise provided, in no circumstances can applications be withdrawn once
           submitted.
      5.   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

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               FURTHER TERMS AND CONDITIONS OF THE HONG KONG
                PUBLIC OFFERING AND THE PREFERENTIAL OFFERING

            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 Hong Kong Public Offering Units will be allocated on an equitable basis to successful
            applicants within this pool) 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 (and Hong Kong Public Offering Units will be allocated
            on an equitable basis to successful applicants within this pool). The number of Hong Kong
            Public Offering Units comprised in each of Pool A and Pool B will be divided equally
            between the two pools.

            Applicants should be aware that applications in Pool A and applications in Pool B may
            receive different allocation ratios. 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 half of the Hong Kong Public
            Offering Units initially available under the Hong Kong Public Offering (that is, 61,711,000
            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 (except for any Reserved Units under the Preferential 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.

            Further information is set out in the section headed ‘‘Structure of the Global Offering — The
            Hong Kong Public Offering’’ in this Offering Circular.

III.   ACCEPTANCE OF APPLICANTS’ OFFERS

       1.   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 results of applications in the Hong Kong Public Offering and the
            Preferential 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, respectively, on Tuesday, May 23, 2006, in The Standard
            (in English) and Hong Kong Economic Times (in Chinese).

       2.   The results of allocations of the Hong Kong Public Offering Units under the Hong Kong
            Public Offering including the Hong Kong Identity Card numbers, passport numbers or
            Hong Kong business registration numbers, where applicable, of successful applicants and the
            number of the Hong Kong Public Offering Units successfully applied for, as well as the
            results of the Preferential Offering will be made available in the manner described in the
            sub-section headed ‘‘Publication of results’’ below.

       3.   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.

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              FURTHER TERMS AND CONDITIONS OF THE HONG KONG
               PUBLIC OFFERING AND THE PREFERENTIAL OFFERING

      4.   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 or the Reserved 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.

      5.   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.

IV.   EFFECT OF MAKING ANY APPLICATION

      1.   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 authorizes the Manager, the Trustee and/or the Joint Lead
                   Underwriters (or their respective agents or nominees) to execute any documents 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 or Reserved 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 or the Reserved 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 or giving an electronic
                   application instruction;

           —       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 Champion REIT and agrees that none of the Manager, the Trustee, the
                   Sole Global Coordinator or the Underwriters nor any of their respective directors,
                   officers, employees, partners, agents or advisors 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 in the case
                   of the Hong Kong Public Offering, 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;

                                                 241
FURTHER TERMS AND CONDITIONS OF THE HONG KONG
 PUBLIC OFFERING AND THE PREFERENTIAL OFFERING

—   (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 in the case of the
    Hong Kong Public Offering, 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 authorized to sign the Application Form or to give electronic application
    instruction as that other person’s agent;
—   undertakes and confirms that, in the case of the Hong Kong Public Offering, 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, nor otherwise participate in, the International
    Offering (except in respect of the Reserved Units under the Preferential Offering);
—   warrants the truth and accuracy of the information contained in the application;
—   agrees to disclose to the Manager, the Trustee, the Joint Lead Underwriters and their
    respective agents any personal data and information which they require about the
    applicant 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 or Reserved
    Units applied for, or any lesser number allocated to the applicant under the
    application;
—   authorizes 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 Champion
    REIT as the holder(s) of any Hong Kong Public Offering Units or Reserved Units
    allocated to the applicant, and the Manager, the Trustee and/or their respective agents
    to send any Unit certificate (in the case of applicants using WHITE or BLUE
    Application Forms only) and/or any refund cheque (in the case of applicants using
    any Application Forms) 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 1,000,000 or more Hong Kong Public Offering Units or Reserved
    Units and has indicated in the Application Form that the applicant will collect the
    Unit certificate(s) (in the case of applicants using WHITE and BLUE Applications
    Forms only) and refund cheque (in the case of applicants using any Application
    Forms) in person, the applicant may do so from the Unit Registrar from 9:00 a.m. to
    1:00 p.m. on Tuesday, May 23, 2006, (or any other date notified by the Manager in
    The Standard (in English) and Hong Kong Economic Times (in Chinese) as the date
    of dispatch and availability of Unit certificates and refund cheques);
—   understands that these declarations and representations will be relied upon by the
    Manager and the Joint Lead Underwriters in deciding whether or not to allocate any

                                 242
        FURTHER TERMS AND CONDITIONS OF THE HONG KONG
         PUBLIC OFFERING AND THE PREFERENTIAL OFFERING

             Hong Kong Public Offering Units or Reserved Units in response to the applicant’s
             application; and
     —       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, the Sole Global Coordinator or the
             Underwriters nor any of their respective directors, employees, partners, agents,
             officers or advisors 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.
2.   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 1 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:
             (a) 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; (b) 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 (c) 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.
3.   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




                                          243
  FURTHER TERMS AND CONDITIONS OF THE HONG KONG
   PUBLIC OFFERING AND THE PREFERENTIAL OFFERING

things and neither HKSCC nor HKSCC Nominees will be liable to the Manager nor any
other person in respect of such things:
—      instruct and authorize 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 authorize 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
—      instruct and authorize 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 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;
—      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, nor otherwise participated in the International
       Offering (except in respect of the Reserved Units under the Preferential Offering);
—      (if the electronic application instructions are given for the applicant’s own benefit)
       declare that only one set of electronic application instructions under the Hong Kong
       Public Offering 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 authorized to give those instructions as that other
       person’s agent;
—      understand that the above declaration will be relied upon by the Manager and the
       Joint Lead Underwriters 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;
—      authorize the Manager and the Trustee to place the name of HKSCC Nominees on
       the register of Unitholders of Champion REIT as the holder of the Hong Kong Public
       Offering Units allocated in respect of the applicant’s electronic application

                                     244
        FURTHER TERMS AND CONDITIONS OF THE HONG KONG
         PUBLIC OFFERING AND THE PREFERENTIAL OFFERING

             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 Sole Global Coordinator, the Underwriters
             and any other parties involved in the Hong Kong Public Offering are not liable for
             information and representations not 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 Sole
             Global Coordinator, the Underwriters, the Unit Registrar, the receiving banker(s),
             their respective agents and advisors together with any information about the
             applicant which they require;
     —       agree that any application made by HKSCC Nominees on behalf of the applicant
             pursuant to electronic application instructions given by the applicant is irrevocable,
             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
     —       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.
4.   The Manager, the Trustee, the Sole Global Coordinator, the Underwriters, any other parties
     involved in the Hong Kong Public Offering or the Preferential Offering and their respective
     directors, officers, employees, partners, agents and advisors are entitled to rely on any
     warranty, representation or declaration made by the applicants in their applications.
5.   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.




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                    FURTHER TERMS AND CONDITIONS OF THE HONG KONG
                     PUBLIC OFFERING AND THE PREFERENTIAL OFFERING

V.      CIRCUMSTANCES IN WHICH APPLICANTS MAY NOT BE                                           ALLOCATED
        HONG KONG PUBLIC OFFERING UNITS OR RESERVED UNITS
         Details of the circumstances in which applicants may not be allocated any Hong Kong Public
Offering Units under the Hong Kong Public Offering or Reserved Units under the Preferential Offering are
set out in the notes attached to the relevant Application Forms, and should be read carefully. The Joint Lead
Underwriters 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):
        1.    If the conditions set out in the section headed ‘‘Structure of the Global Offering —
              Conditions of the Hong Kong Public Offering and the Preferential Offering’’ in this Offering
              Circular are not fulfilled or waived on or before May 24, 2006.
        2.    If the Joint Lead Underwriters or their agents or nominees exercise their discretion to reject
              or to accept any application, or to accept only part of any application.
        3.    If:
               —       the application is a multiple or a suspected multiple application; or
               —       the Application Form is not completed correctly; or
               —       the payment is not made correctly or payment is made by cheque or banker’s cashier
                       order and the cheque or banker’s cashier order is dishonoured on its first
                       presentation; or
               —       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 (except for the
                       Reserved Units under the Preferential 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 61,711,000 Units, representing half 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.
        4.    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.
      Applicants should note in particular the following situations in which Reserved Units will not be
allocated to them or their applications are liable to be rejected or satisfied only in part (as applicable):
        1.    If the conditions set out in the section headed ‘‘Structure of the Global Offering —
              Conditions of the Hong Kong Public Offering and the Preferential Offering’’ in this Offering
              Circular are not fulfilled or waived on or before May 24, 2006.
        2.    If the Joint Lead Underwriters or their agents or nominees exercise their discretion to reject
              or to accept any application, or to accept only part of any application.

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        3.    If:
               —       the Application Form is not completed correctly; or
               —       the payment is not made correctly or payment is made by cheque or banker’s cashier
                       order and the cheque or banker’s cashier order is dishonoured on its first
                       presentation; or
               —       either of the Underwriting Agreements does not become unconditional or it is
                       terminated in accordance with the terms thereof; or
               —       the Units applied for exceed the amount of the applicant’s Assured Entitlement.

VI.     PUBLICATION OF RESULTS
        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 and the Preferential 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, is expected to
be published in The Standard (in English) and Hong Kong Economic Times (in Chinese) on or before
Tuesday, May 23, 2006.
         If an applicant is unable to locate his/her/its allocation results, he/she/it can contact the Unit
Registrar, Computershare Hong Kong Investor Services Limited, at 46th Floor, Hopewell Centre,
183 Queen’s Road East, Wanchai, Hong Kong or by calling 2862 8555 between 9:00 a.m. and 6:00 p.m.
daily from Monday to Friday.

VII.    IF AN APPLICATION FOR THE HONG KONG PUBLIC OFFERING UNITS OR THE
        RESERVED UNITS IS SUCCESSFUL (IN WHOLE OR IN PART)
        1.    If applicants are applying using a WHITE or BLUE Application Form and the application is
              wholly or partly successful:
               —       For those applicants who apply for (a) less than 1,000,000 Hong Kong Public
                       Offering Units or Reserved Units or (b) 1,000,000 or more Hong Kong Public
                       Offering Units or Reserved Units but who have not opted for personal collection,
                       their Unit certificates and/or refund cheques are expected to be sent on or before
                       Tuesday, May 23, 2006 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 or BLUE Application Forms,
                       as the case may be, for 1,000,000 or more Hong Kong Public Offering Units or
                       Reserved Units under the Hong Kong Public Offering or the Preferential Offering
                       and have indicated in their Application Forms that they wish to collect Unit
                       certificates and refund cheques in person may do so from the Unit Registrar from
                       9:00 a.m. to 1:00 p.m. on Tuesday, May 23, 2006, (or any other date notified by the
                       Manager in The Standard (in English) and Hong Kong Economic Times (in Chinese)
                       as the date of dispatch and availability of Unit certificates and refund cheques).
               —       Applicants being individuals who opt for personal collection cannot authorize any
                       other person to make collection on their behalf. Applicants being corporations who

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         PUBLIC OFFERING AND THE PREFERENTIAL OFFERING

             opt for personal collection must attend by personal authorized representatives each
             bearing a letter of authorization from the corporation stamped with the corporation’s
             chop. Both individuals and authorized 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 dispatched by ordinary post
             to the addresses specified in the relevant Application Forms at the applicants’
             own risk.

2.   If: (a) applicants are applying on a YELLOW Application Form; or (b) applicants are giving
     electronic application instructions to HKSCC, and the 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, May 23, 2006 or, under a contingency 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:
             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 ‘‘Publication of results’’ above, on
             Tuesday, May 23, 2006. Applicants should check the results made available by the
             Manager and report any discrepancies to HKSCC before 5:00 p.m. on Tuesday,
             May 23, 2006 or such other date HKSCC or HKSCC Nominees chooses.
             Immediately after the credit of the Hong Kong Public Offering Units to the
             applicants’ stock accounts, applicants can check their new account balance via 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 will also make
             available to the applicants an activity statement showing the number of Hong Kong
             Public Offering Units credited to their stock accounts.

     —       If an applicant has given electronic application instructions to HKSCC:
             The Manager is expected to make available the application results of the Hong Kong
             Public Offering, including the results of applications made electronically by CCASS
             Participants (and in the case of CCASS Broker Participants and CCASS Custodian
             Participants, the Manager shall include information relating to the beneficial owner,
             if supplied), the applicant’s Hong Kong identity card/passport/Hong Kong business
             registration number or other identification code (as appropriate) in the manner
             described in the sub-section headed ‘‘Publication of results’’ above, on Tuesday,
             May 23, 2006. Applicants should check the results made available by the Manager
             and report any discrepancies to HKSCC before 5:00 p.m. on Tuesday, May 23, 2006
             or on any other date HKSCC or HKSCC Nominees chooses.

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                 FURTHER TERMS AND CONDITIONS OF THE HONG KONG
                  PUBLIC OFFERING AND THE PREFERENTIAL OFFERING

               —      If an applicant is instructing a CCASS Broker Participant or CCASS Custodian
                      Participant to give electronic application instructions to HKSCC on the applicant’s
                      behalf:
                      Applicants can also check the number of Hong Kong Public Offering Units allocated
                      to them and the amount of refund, if any, payable to them with that CCASS Broker
                      Participant or CCASS Custodian Participant.
               —      If an applicant is applying as a CCASS Investor Participant by giving electronic
                      instruction to HKSCC:
                      Applicants can also check the number of the Hong Kong Public Offering Units
                      allocated to them and the amount of refund, if any, payable to them via 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) on Tuesday, May 23,
                      2006. HKSCC will also make available to them an activity statement showing the
                      number of the Hong Kong Public Offering Units credited to their stock accounts and
                      the amount of refund, if applicable, credited to their designated bank accounts.
               —      If applicants are applying using a YELLOW Application Form:
                      For those applicants who apply for (a) less than 1,000,000 Hong Kong Public
                      Offering Units or (b) 1,000,000 or more Hong Kong Public Offering Units but who
                      have not opted for personal collection, their refund cheques are expected to be sent
                      on or before Tuesday, May 23, 2006 to the address as stated in their Application
                      Forms by ordinary post and at their own risk. For those applicants who apply for
                      1,000,000 or more Hong Kong Public Offering Units under the Hong Kong Public
                      Offering and have indicated in their Application Forms that they wish to collect
                      refund cheques in person may do so from the Unit Registrar from 9:00 a.m. to
                      1:00 p.m. on Tuesday, May 23, 2006, (or any other date notified by the Manager in
                      The Standard (in English) and Hong Kong Economic Times (in Chinese) as the date
                      of dispatch and availability of refund cheques).
                      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 authorized representatives each
                      bearing a letter of authorization from the corporation stamped with the corporation’s
                      chop. Both individuals and authorized representatives, if applicable, must produce, at
                      the time of collection, evidence of identity acceptable to the Unit Registrar.
         Uncollected refund cheques will be dispatched by ordinary post to the addresses specified in the
relevant Application Forms at the applicants’ own risk.
      No receipt will be issued for application monies paid. The Manager will not issue temporary
documents of title.

VIII.   REFUND OF MONEY — ADDITIONAL INFORMATION
        1.    An applicant will be entitled to a refund if:
               —      the application is not successful or the conditions of the Hong Kong Public Offering
                      and the Preferential Offering are not fulfilled in accordance with the section headed
                      ‘‘Structure of the Global Offering — Conditions of the Hong Kong Public Offering
                      and the Preferential Offering’’ in this Offering Circular, in which case the Manager

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                  PUBLIC OFFERING AND THE PREFERENTIAL OFFERING

                      will refund the application money together with the brokerage, Hong Kong Stock
                      Exchange trading fee and SFC transaction levy to the applicant, without interest;
               —      the application is accepted only in part, in which case the Manager will refund the
                      appropriate portion of the application money, together with related brokerage, the
                      Hong Kong Stock Exchange trading fee and the SFC transaction levy, without
                      interest; and
               —      the Offer Price (as finally determined) is less than the price per Unit initially paid by