09:26     SHANGRI-LA ASIA<00069> & KERRY PPT<00683> - Joint Ann. (1)          

    The Stock Exchange of Hong Kong Limited takes no responsibility for the   
    contents of this announcement, makes no representation as to its          
    accuracy or completeness and expressly disclaims any liability            
    whatsoever for any loss howsoever arising from or in reliance upon the    
    whole or any part of the contents of this announcement.                   
                                                                              
      KERRY PROPERTIES LIMITED                                                
      (Incorporated in Bermuda with limited liability)                        
      website: www.kerryprops.com                                             
      (Stock Code: 00683)                                                     
                                                                              
      SHANGRI-LA ASIA LIMITED                                                 
      (Incorporated in Bermuda with limited liability)                        
      website: www.ir.shangri-la.com                                          
      (Stock Code: 00069)                                                     
                                                                              
    CONNECTED TRANSACTION                                                     
                                                                              
    The directors of KPL and SA announce that on 24 December 2004, KPL and    
    SA granted the KPL Guarantee and the SA Guarantee, respectively, in       
    favour of the Bank to secure the liabilities of Beijing Jia Ao in         
    respect of the Facility under the Loan Agreement.                         
                                                                              
    Beijing Jia Ao is owned as to 95% by KBGH (which is in turn owned         
    indirectly as to 75% by KPL and 25% by SA) and 5% by Bei Ao which is a    
    state-owned limited liability company established in the PRC and is       
    independent of and not connected with KPL and SA and their respective     
    connected persons.                                                        
                                                                              
    As at the date of this announcement, KHL is interested in 750,842,646     
    KPL Shares as disclosed under the SFO, representing approximately         
    61.98% of the issued KPL Shares of 1,211,410,686 and is a substantial     
    shareholder of KPL. SA, as an associated company of KHL, is an            
    associate of KHL under the Listing Rules and is therefore a connected     
    person of KPL. As Beijing Jia Ao is a non wholly-owned subsidiary of      
    KPL where SA is entitled to exercise 23.75% of the voting power at any    
    general meeting of Beijing Jia Ao, Beijing Jia Ao is a connected person   
    of KPL under rule 14A.11(5) of the Listing Rules. Accordingly, the        
    granting of the KPL Guarantee by KPL for the benefit of Beijing Jia Ao    
    constitutes a connected transaction for KPL pursuant to rule 14A.13(3)    
    of the Listing Rules.                                                     
                                                                              
    As at the date of this announcement, KHL is interested in 1,078,887,701   
    SA Shares as disclosed under the SFO, representing approximately 44.84%   
    of the issued SA Shares of 2,405,941,138 and is a substantial             
    shareholder of SA. KPL, as a subsidiary of KHL, is an associate of KHL    
    under the Listing Rules and is therefore a connected person of SA.        
    Beijing Jia Ao is also an associate of KHL by virtue of its being a non   
    wholly-owned subsidiary of KPL, and is therefore a connected person of    
    SA. Accordingly, the granting of the SA Guarantee by SA for the benefit   
    of Beijing Jia Ao constitutes a connected transaction for SA pursuant     
    to rule 14A.13(3) of the Listing Rules.                                   
                                                                              
    As the total guarantee amount under the KPL Guarantee is within the       
    exemption in respect of connected transactions under rule 14A.66(2)(a)    
    of the Listing Rules, details of the KPL Guarantee are required to be     
    disclosed by way of this announcement and will be included in the next    
    published annual report and accounts of KPL in accordance with rule       
    14A.45 of the Listing Rules.                                              
                                                                              
    As the total guarantee amount under the SA Guarantee is within the        
    exemption in respect of connected transactions under rule 14A.66(2)(a)    
    of the Listing Rules, details of the SA Guarantee are required to be      
    disclosed by way of this announcement and will be included in the next    
    published annual report and accounts of SA in accordance with rule        
    14A.45 of the Listing Rules.                                              
                                                                              
    THE LOAN AGREEMENT AND THE GUARANTEES                                     
                                                                              
    Date:    24 December 2004                                                 
                                                                              
    Parties:                                                                  
    (a)  Lender:  the Bank                                                    
    (b)  Borrower:  Beijing Jia Ao                                            
                                                                              
    Facility:  a 30-month term loan facility of US$17,000,000                 
    (approximately HK$132,600,000)                                            
                                                                              
    Purpose:  to repay shareholders' loans advanced to Beijing Jia Ao and     
    the related interests and expenses                                        
                                                                              
        the KPL Guarantee  the SA Guarantee  the Bei Ao Guarantee             
                                                                              
    Date:    24 December 2004  24 December 2004  24 December 2004