09:35     KOWLOON DEV<00034> - Announcement & Resumption (3)                  

    Investment properties:        Shenzhen International Trade Center:        
    located in Luohu District in Shenzhen, has a total retail area of         
    approximately 22,100 sq.m. and total office area of 8,500 sq.m.           
                                                                              
            Guomau Commercial Building: located in Luohu District in          
    Shenzhen, has a total office area of approximately 17,700 sq.m.           
                                                                              
            Tianan International Building: A 50% interest in this property    
    which is located in Luohu District in Shenzhen with a total retail area   
    of approximately 21,700 sq.m. and total office area of 8,400 sq.m.        
                                                                              
    5.        Consideration                                                   
                                                                              
    RMB458,576,423.93 (equivalent to approximately HK$432,619,267.86) or      
    approximately RMB1.204 per share in Shenzhen Properties.                  
                                                                              
    The consideration per share of RMB1.204 represents a discount of 74.3%    
    and 48.8% respectively to the closing price of the A-shares (of RMB4.69)  
    and B-shares (of RMB2.35) on 31 March 2005 (being the last trading date   
    prior to suspension of trading in such shares) and a discount of 72.6%    
    and 47.0% respectively to the average of the closing prices of the        
    A-shares of RMB4.39 and of the B-shares of RMB2.27, as quoted on the      
    Shenzhen Stock Exchange for the last 30 trading days ended on 31 March    
    2005.                                                                     
                                                                              
    The terms of the Agreement including the consideration have been reached  
    and determined on an arm's length basis, with reference to the            
    prevailing market conditions in the PRC and the underlying net asset      
    value as at 31 December 2004 of each share in Shenzhen Properties of      
    approximately RMB1.047 per share. The Directors consider that the         
    consideration is fair and reasonable to the Company and the Acquisition   
    is in the interests of the Shareholders as a whole.                       
                                                                              
    6.        Payment Terms                                                   
                                                                              
    (i)        An earnest money in the sum of RMB20,000,000 was paid before   
    signing of the Agreement.                                                 
                                                                              
    (ii)        A deposit representing 50% of the aggregate consideration     
    shall be payable within 5 working days of the date of the Agreement.      
    Within 5 working days of receiving this amount, half of the earnest       
    money shall be repaid by the Sellers to the Purchaser. The remainder of   
    the earnest money shall be treated as a performance bond in relation to   
    certain future undertakings of the Group in relation to the potential     
    acquisition by Shenzhen Properties of attractive investment projects as   
    mentioned below;                                                          
                                                                              
    (iii) The balance of the consideration shall be paid by the Purchaser to  
    the Sellers within 5 working days of the issue by the Sellers of a        
    notice for payment. Such notice shall be issued after relevant PRC        
    regulatory approval(s) has been obtained, and the waiver being obtained   
    from the CSRC or upon completion of the obligations of the Purchaser to   
    make a general offer for the shares of Shenzhen Properties.               
                                                                              
    7.        Regulatory approvals                                            
                                                                              
    Pursuant to the Agreement, the Agreement will become effective on the     
    date, and subject to, the necessary regulatory approvals being obtained.  
    According to the opinion of the legal advisers of the Company on the PRC  
    law, approvals are required to be obtained from the State Ministry of     
    Commerce, the State Council State-owned Assets Supervision and            
    Administration Commission, the PRC State Administration of Foreign        
    Exchange, the waiver of the takeover obligation obtained from the CSRC    
    and registration with the Shenzhen Administration for Industry and        
    Commerce. Applications will be made to the relevant PRC regulatory        
    authorities as soon as possible after the release of this announcement.   
    Save for the aforesaid, the Agreement does not contain any other          
    conditions precedent. Part of the consideration is required to be paid    
    before the necessary regulatory approvals have been obtained.             
    Shareholders should note that there is no certainty that the necessary    
    regulatory approvals can be obtained. Accordingly, there is no certainty  
    that the Acquisition will be completed.                                   
                                                                              
    8.        Financial support and undertakings                              
                                                                              
    The Purchaser has undertaken that within 6 months of the date of the      
    Completion, it will procure that Shenzhen Properties will be provided     
    with working capital in the amount of RMB500 million. The working         
    capital will be provided for the purpose of strengthening the financial   
    position of Shenzhen Properties and enable it to pursue its development   
    activities at an enhanced pace. In the event that this undertaking        
    cannot be fulfilled, administrative penalty may be applied by the         
    relevant regulatory authority in the PRC as it considers fit.             
                                                                              
    In addition, the Purchaser has undertaken that it will identify