China Overseas Land renews lease framework with CSCECL; annual caps set at up to RMB373 million through 2028

China Overseas Land & Investment Limited (China Overseas Land) has signed a new Lease Framework Agreement with its intermediate controlling shareholder, China State Construction Engineering Corporation Limited (CSCECL), to succeed the current arrangement that expires on 30 April 2026. The new framework runs from 1 May 2026 to 31 December 2028 and governs continuing connected transactions under Chapter 14A of the Hong Kong Listing Rules.

Key terms • Scope: CSCECL Group may lease apartments, offices, shops and parking spaces owned by China Overseas Land on terms no less favourable than those offered to independent tenants. • Tenor: Individual leases may extend up to 20 years. Red Sun Capital Limited, the independent financial adviser, confirmed such duration is normal business practice and supports the Group’s strategy of securing long-term, stable rental income. • Pricing: Rents will be determined after arm’s-length negotiations with reference to property location, size, use and at least three comparable market transactions. Payments are due monthly, quarterly or as specified in each lease.

Annual caps • 1 May 2026 – 31 Dec 2026: RMB176.00 million • FY 2027: RMB315.00 million • FY 2028: RMB373.00 million

The caps were derived from historical billings under the existing framework (RMB83.00 million for the eight months ended 31 December 2023; RMB130.00 million in 2024; RMB140.00 million in 2025; and RMB41.00 million for the three months to 31 March 2026), expected new leases, market rents and a buffer for demand or price fluctuations.

Regulatory position Applicable percentage ratios for the highest cap are above 0.1 % but below 5 %, so the transactions require announcement, annual review and reporting, but are exempt from independent shareholders’ approval.

Internal controls China Overseas Land’s Commercial Properties Unit will benchmark rents against at least three comparable properties, the Finance Department will monitor utilisation against the caps, quarterly reports will be submitted to the Audit and Risk Management Committee and the Board, and the external auditor will perform an annual review. Independent non-executive directors will review the transactions each year to confirm compliance with Listing Rules and commercial terms.

Rationale Management expects the renewal to enhance occupancy, secure recurring rental income and align with the Group’s strategy of maximising cash flow from its property portfolio. No director had a material interest in the agreement; however, Chairman Yan Jianguo voluntarily abstained from voting on the approving board resolutions.