China Logistics Property Holdings Co., Ltd€¦ · Letter from the Independent Financial Adviser..... 30 Letter from the Independent Property Valuer..... 46 Appendix — General

28 May 2020

894568 \ (China Logistics) \ 25/05/2020 \ M71

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a stockbroker or other registered dealer in securities, a bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in China Logistics Property Holdings Co., Ltd, you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this 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 circular.

China Logistics Property Holdings Co., Ltd

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1589)

CONTINUING CONNECTED TRANSACTIONSAND

NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Adviser tothe Independent Board Committee and the Independent Shareholders

Crescendo Capital Limited

A letter from the Board is set out on pages 5 to 27 of this circular. A letter from the Independent Board Committee containing its recommendation to the Independent Shareholders is set out on pages 28 to 29 of this circular. A letter from the Independent Financial Adviser, Crescendo Capital Limited, containing its advice to the Independent Board Committee and the Independent Shareholders, is set out on pages 30 to 45 of this circular.

A notice convening the extraordinary general meeting of China Logistics Property Holdings Co., Ltd to be held at Meeting Room, 8/F, Block A, No. 1899 Shenkun Road, Minhang District, Shanghai, China on Monday, 29 June 2020 at 2:20 p.m. (or immediately after the conclusion or adjournment of the Company’s Annual General Meeting to be held at the same venue at 2:00 p.m. on the same day) is set out on pages EGM-1 to EGM-2 of this circular. A form of proxy for use at the Extraordinary General Meeting is also enclosed with this circular. Such form of proxy is also published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.cnlpholdings.com) respectively.

Whether or not you are able to attend the Extraordinary General Meeting, please complete and sign the accompanying form of proxy in accordance with the instructions printed thereon and return it to the Company’s share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the Extraordinary General Meeting (i.e. not later than 2:20 p.m. on Saturday, 27 June 2020) or any adjournment thereof. Completion and return of the form of proxy will not preclude Shareholders from attending and voting in person at the Extraordinary General Meeting or any adjournment thereon if they so wish.

References to time and dates in this circular are to Hong Kong time and dates.

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CONTENTS

Page

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Letter from the Board

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

2. The Lease Framework Agreement and the Lease Agreements . . . . . . . . . . . . . . . . . . . . . 6

3. Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

4. Voting by Way of Poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

5. Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

6. Further Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Letter from the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Letter from the Independent Property Valuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Appendix — General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Notice of Extraordinary General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EGM-1

— 1 —


DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions shall have the following meanings:

“2017 Property Lease Transactions”

the continuing connected transactions between the Group and the SYPI Group, as disclosed in the announcement and circular of the Company dated 19 April 2017 and 12 May 2017, respectively, and as approved by the Independent Shareholders at the extraordinary general meeting of the Company held on 8 June 2017


the continuing connected transactions between the Group and the SYPI Group, as disclosed in the announcement and circular of the Company dated 25 April 2018 and 23 May 2018, respectively, and as approved by the Independent Shareholders at the extraordinary general meeting of the Company held on 8 June 2018

“2019 CCT Announcement” the announcement of the Company dated 17 May 2019 in respect of the 2019 Property Lease Transactions


the continuing connected transactions between the Group and the SYPI Group, as disclosed in the announcement of the Company dated 17 May 2019

“2020 CCT Announcement” the announcement of the Company dated 29 April 2020 in respect of the Continuing Connected Transactions

“Annual General Meeting” the annual general meeting of the Company to be held at Meeting Room, 8/F, Block A, No. 1899 Shenkun Road, Minhang District, Shanghai, China on Monday, 29 June 2020 at 2:00 p.m.

“associate(s)” has the meaning ascribed to it under the Listing Rules

“Board” the board of Directors

“Company” China Logistics Property Holdings Co., Ltd (中國物流資產控股有限公司), a company incorporated in the Cayman Islands with limited liability, the issued shares of which are listed on the Main Board of the Stock Exchange

“connected person(s)” has the meaning ascribed to it under the Listing Rules

“Continuing Connected Transactions”

the continuing connected transactions as contemplated under the Lease Framework Agreement, details of which are more particularly described in the paragraph headed “2.B. The Lease Framework Agreement” in this circular

“Director(s)” the director(s) of the Company

— 2 —


DEFINITIONS

“Extraordinary General Meeting” or “EGM”

an extraordinary general meeting of the Company to be held at Meeting Room, 8/F, Block A, No. 1899 Shenkun Road, Minhang District, Shanghai, China on Monday, 29 June 2020 at 2:20 p.m. (or immediately after the conclusion or adjournment of the Annual General Meeting), or any adjournment thereof, to consider and, if thought fit, approve the Continuing Connected Transactions and the proposed annual caps

“GFA” gross floor area

“Group” the Company and its subsidiaries from time to time

“Hong Kong” the Hong Kong Special Administrative Region of the PRC

“Independent Board Committee” an independent committee of the Board comprising all independent non-executive Directors, namely Mr. Guo Jingbin, Mr. Fung Ching Simon, Mr. Wang Tianye, Mr. Leung Chi Ching Frederick and Mr. Chen Yaomin, established to advise the Independent Shareholders on the Continuing Connected Transactions and the proposed annual caps

“Independent Financial Adviser” or “Crescendo Capital”

Crescendo Capital Limited (薈盛融資有限公司), a licensed corporation to carry out Type 6 (advising on corporate finance) regulated activities under the SFO, and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the Continuing Connected Transactions and the proposed annual caps

“Independent Property Valuer” or “Colliers”

Beijing Colliers International Real Estate Valuation Co., Ltd., an independent professional property valuer

“Independent Shareholders” has the meaning ascribed to it under the Listing Rules, and in relation to the Company means the Shareholders other than Mr. Li and his associates

“Latest Practicable Date” 22 May 2020, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular

“Lease Agreements” the lease agreements entered into between certain members of the Group and certain members of the SYPI Group as contemplated under the Lease Framework Agreement

“Lease Framework Agreement” the lease framework agreement dated 29 April 2020 entered into between the Company and SYPI in respect of the leasing of certain premises by members of the Group to members of the SYPI Group

“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

— 3 —


DEFINITIONS

“Model Code” the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules

“Mr. Li” Mr. Li Shifa (李士發), an executive Director, the chairman of the Board and a substantial Shareholder

“PRC” the People’s Republic of China

“Premises” the premises to be leased by relevant members of the Group to relevant members of the SYPI Group pursuant to the Lease Framework Agreement

“RMB” Renminbi, the lawful currency of the PRC

“SFO” the Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong

“Shanghai Yupei” Shanghai Yupei (Group) Company Limited* (上海宇培(集團)有限公司), a limited liability company established under the laws of the PRC, a subsidiary owned as to 99.99% by the Company

“Shanghai Yupei Express Logistics”

Shanghai Yupei Express Logistics Company Limited* (上海宇培速通物流有限公司), a limited liability company established under the laws of the PRC, an indirect wholly-owned subsidiary of SYPI and thus an associate of Mr. Li and a connected person of the Company

“Shanghai Yupei Industry” Shanghai Yupei Industry (Group) Company Limited* (上海宇培實業（集團）有限公司), a limited liability company established under the laws of the PRC, a direct wholly-owned subsidiary of SYPI and thus an associate of Mr. Li and a connected person of the Company

“Share(s)” ordinary share(s) in the capital of the Company with nominal value of US$0.0000625 each and listed on the Main Board of the Stock Exchange

“Shareholder(s)” the holder(s) of the Share(s)

“Six 2018 Premises” the six premises that are leased by the relevant members of the SYPI Group under the 2018 Property Lease Transactions, namely (i) the Xi’an Premises, (ii) the Xiechun Road Premises, (iii) part of the Cuiwei Donglu Premises, (iv) part of the Suzhou Premises, (v) the Wuhu Premises and (vi) part of the Wuhan Premises, as set out in the section headed “2.B. (c) Specific Terms of the Lease Agreements” in this circular

“sq.m.” square metres

“Stock Exchange” The Stock Exchange of Hong Kong Limited

“subsidiaries” has the meaning ascribed to it under the Listing Rules

“substantial shareholder” has the meaning ascribed to it under the Listing Rules

— 4 —


DEFINITIONS

“SYPI” Shanghai Yupei Investment Holdings Co., Ltd.* (上海宇培投資控股有限公司), a limited liability company established under the laws of the PRC, which is owned by Mr. Li as to 90% and Ms. Ma Xiaocui, the spouse of Mr. Li, as to 10%, thus an associate of Mr. Li and a connected person of the Company

“SYPI Group” SYPI and its subsidiaries from to time

“Termination Agreements” together, the termination agreements entered into between certain members of the Group on the one hand, and certain members of the SYPI Group on the other, with respect to the Six 2018 Premises and the Two 2019 Premises

“Three Premises” together, (i) Chengdu Premises, (ii) Hongqiao Premises and (iii) Shenyang Premises, as leased by relevant members of the Group (as lessors) to relevant members of the SYPI Group (as lessees) under lease agreements in force as at the date of this circular, and to be renewed pursuant to the Lease Framework Agreement, as set out in the section headed “2.B.(c) Specific Terms of the Lease Agreements” in this circular

“Two 2019 Premises” the two premises that are leased by the relevant members of the SYPI Group under the 2019 Property Lease Transactions, namely (i) the Beijing Premises, and (ii) part of the Wuhan Premises, as set out in the section headed “2.B.(c) Specific Terms of the Lease Agreements” in this circular

“Yupei International” Yupei International Investment Management Co., Ltd (宇培國際投資管理有限公司), a company incorporated in the British Virgin Islands with limited liability and a substantial Shareholder and a connected person of the Company

“Yupei Supply Chain” Yupei Supply Chain Management Co., Ltd.* (宇培供應鏈管理有限公司), a limited liability company established under the laws of the PRC, a direct wholly-owned subsidiary of SYPI and thus an associate of Mr. Li and a connected person of the Company

“US$” the lawful currency of the United States of America

“%” per cent.

* The Chinese name of the entities incorporated in the PRC is the official name and the English name is the translation for

identification purpose only.

— 5 —


LETTER FROM THE BOARD



(Stock Code: 1589)

Executive Directors:Mr. Li Shifa (Chairman)Mr. Wu GuolinMs. Li HuifangMr. Chen RunfuMr. Cheuk Shun WahMs. Shi LianghuaMr. Xie Xiangdong

Non-Executive Directors:Mr. Huang XufengMs. Li QingMr. Fu Bing

Independent Non-Executive Directors:Mr. Guo JingbinMr. Fung Ching SimonMr. Wang TianyeMr. Leung Chi Ching FrederickMr. Chen Yaomin

Registered Office:4th Floor, Harbour Place103 South Church StreetP.O. Box 10240Grand Cayman KY1-1002Cayman Islands

Principal Place of Business in Hong Kong:Unit 3213, Cosco Tower183 Queen’s Road CentralSheung WanHong Kong

28 May 2020

To the Shareholders

Dear Sir/Madam,

CONTINUING CONNECTED TRANSACTIONSAND


1. INTRODUCTION

Reference is made to the 2020 CCT Announcement. On 29 April 2020, relevant members of the Group and relevant members of the SYPI Group entered into the Termination Agreements in respect of the Six 2018 Premises and Two 2019 Premises, and the Company entered into the Lease Framework Agreement with SYPI, pursuant to which the Company and SYPI agreed that relevant members of the Group and relevant members of the SYPI Group shall further enter into the Lease Agreements in respect of the leasing of each of the Premises based on the pricing policy as set out in the Lease Framework Agreement. The Continuing Connected Transactions will be subject to the proposed annual caps in respect of the years ending 31 December 2020, 2021, 2022 and 2023.

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The purpose of this circular is to provide Shareholders with, among other things, (i) information on the Continuing Connected Transactions and the proposed annual caps; (ii) a letter from Crescendo Capital (containing its advice to the Independent Board Committee and the Independent Shareholders on the Continuing Connected Transactions and the proposed annual caps); (iii) the recommendation of the Independent Board Committee to the Independent Shareholders; and (iv) a notice convening the EGM for considering and, if thought fit, approving the Continuing Connected Transactions and the proposed annual caps.

Reference is made to the announcement and circular of the Company dated 25 April 2018 and 23 May 2018, respectively, in respect of the 2018 Property Lease Transactions with certain members of the SYPI Group and the 2019 CCT Announcement. At the extraordinary general meeting of the Company held on 8 June 2018, the resolution to approve the 2018 Property Lease Transactions and the relevant proposed annual caps was duly passed by the Independent Shareholders. As disclosed in the 2019 CCT Announcement, relevant members of the Group (as lessors) entered into the 2019 Property Lease Transactions.

The existing leases under the 2018 Property Lease Transactions in respect of the Three Premises and Six 2018 Premises will expire on 31 December 2020, and the existing leases under the 2019 Property Lease Transactions in respect of the Two 2019 Premises will expire on 31 December 2020 and 31 December 2022, respectively.

The relevant members of the Group and relevant members of the SYPI Group intend to renew the property leases in respect of the leasing of each of the Three Premises. In light of the installation of cold chain equipment and facilities of the Six 2018 Premises and Two 2019 Premises to suit the business need of relevant members of the SYPI Group, relevant members of the Group, on the one hand, and (1) Yupei Supply Chain and (2) Shanghai Yupei Express Logistics, respectively, on the other, wish to terminate the property leases in respect of the leasing of each of the Six 2018 Premises and Two 2019 Premises and enter into lease agreements in respect of the leasing of each of the Premises for a new three-year period and a higher rent to reflect the facilities upgrade.

2. THE LEASE FRAMEWORK AGREEMENT AND THE LEASE AGREEMENTS

A. THE TERMINATION AGREEMENTS

On 29 April 2020, relevant members of the Group and relevant members of the SYPI Group entered into the Termination Agreements, which provide for (i) the termination of the current lease agreements in respect of the Six 2018 Premises and Two 2019 Premises, effective 30 June 2020 pursuant to the respective terms of the lease agreements; (ii) new lease agreements shall be entered into for the leasing of each of the Six 2018 Premises and Two 2019 Premises; and (iii) the security deposit under the current lease agreements shall be refunded and shall be credited against the new lease agreements.

As the Group has upgraded each of the Six 2018 Premises and the Two 2019 Premises, the Group believes a higher rent is justifiable and for the best interest of the Group. As such, if the Continuing Connected Transactions is not approved by the Independent Shareholders, the Group will seek to either (i) search for tenants that are not connected persons and enter into lease agreements after arms-length negotiation; or (ii) renegotiate terms of lease agreements with respect to these premises with SYPI Group and make announcements or seek Independent Shareholders’ approval again as appropriate.

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B. THE LEASE FRAMEWORK AGREEMENT

On 29 April 2020, the Company entered into the Lease Framework Agreement with SYPI, pursuant to which the Company and SYPI agreed that relevant members of the Group and relevant members of the SYPI Group shall further enter into the Lease Agreements in respect of the leasing of each of the Premises, based on the pricing policy set out in the Lease Framework Agreement.

(a) Principal terms of the Lease Framework Agreement

The principal terms of the Lease Framework Agreement are summarized as follows.

Date 29 April 2020

Parties (1) The Company; and

(2) SYPI.

Term The Lease Framework Agreement is for a term of three years commencing from 1 July 2020 to 30 June 2023.

The parties to the agreement may extend the agreement for a further term of three years within six months before the expiry of the three-year term of the agreement, subject to compliance with the relevant requirements under the Listing Rules.

Subject The Lease Framework Agreement sets out a framework of the terms on which the Company has agreed to procure members of the Group to lease the Premises (including warehouse areas, office premises and canopy areas) to members of the SYPI Group in relation to its business and operations. The relevant members of the Group shall further enter into separate agreements with the relevant members of the SYPI Group in order to set out the specific terms and conditions of the leasing of the Premises.

Pricing Policy The pricing terms of each Lease Agreement shall be consistent with the following guidelines:

(i) the terms of the Lease Agreements shall be negotiated and agreed by the parties on an arm’s length basis;

(ii) the rentals under the Lease Agreements shall represent the prevailing market rentals of similar premises in neighboring areas based on available property rental market comparables, actual GFA of each of the leased Premises and the potential increase in the value of such Premises;

(iii) the service fees under the Lease Agreements shall be determined with reference to the nature and use of the relevant Premises;

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(iv) annual increments in rentals and service fees shall be determined by reference to the potential increase in the value of the Premises; and

(v) where property rental market comparables are not available, the pricing terms shall be determined on a fair and reasonable basis which is equivalent or comparable to those offered to or quoted by third parties independent of the Company for similar premises.

Renewal of the Lease Agreements

The parties agreed that the Lease Agreements shall not be renewed unless and until the Company re-complies with the applicable requirements under the Listing Rules.

(b) Principal terms of the Lease Agreements

The principal terms of the Lease Agreements are summarized as follows.

Date Each of the Lease Agreements is dated 29 April 2020.

Parties (1) A relevant member of the Group as the lessor; and

(2) A relevant member of the SYPI Group, as the lessee,

as set forth in the section headed “(c) Specific terms of the Lease Agreements” below.

Term The initial terms of the Lease Agreements range from 30 months to 36 months, as set forth in the section headed “(c) Specific terms of the Lease Agreements” below. All of the Lease Agreements will expire on 30 June 2023, i.e. the expiry date of the Lease Framework Agreement.

Rental and other outgoings

A monthly rental (exclusive of tax (other than value-added tax) and any other fees due to the government) is payable in advance. The monthly rental will be subject to a 3% increment after each 12-month period during the term of the relevant Lease Agreement (a “12-month Rental Cycle”).

The monthly rental is halved in two consecutive months during each 12-month Rental Cycle, which in effect provides for a one-month rent-free period during each 12-month Rental Cycle.

A monthly service fee is payable in advance and subject to an annual 3% increment.

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Other charges arising from the actual usage of each of the Premises, including but not limited to utility charges (such as water, electricity, heating) and network communications fees, and such corresponding expenses to be contributed from occupiers, are to be borne by the relevant member of the SYPI Group as the lessee under the relevant Lease Agreement.

In the event that adjustment is made to the type of tax or tax rate as may be applicable to rentals or service fees (as the case may be) during the term of the relevant Lease Agreement, the parties to a Lease Agreement agree to adjust the rental and service fees accordingly, on the basis that the base rental or service fee amount that is exclusive of value-added tax will not be altered.

An upfront rental deposit is payable and may be returned upon the expiration of the lease, subject to any forfeiture or deduction by the lessor as a result of default on the part of the lessee.

Renewal The lessee is required to serve a written notice to the relevant lessor at least six months prior to the expiration of the relevant Lease Agreement expressing its intention to renew the lease. A renewed lease agreement shall be on the exact same terms as the expired Lease Agreement except that the renewed lease agreement shall be for a term of not more than 36 months and the rental under the renewed lease agreement may be determined in accordance with market conditions.

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(c) Specific terms of the Lease Agreements

Sets forth below are the specific terms of each of the Lease Agreements.

(i) Beijing Premises

Parties (1) Beijing Linhaitan Trading Company Limited* (北京林海灘商貿有限公司) (a wholly-owned subsidiary of the Company) as the lessor; and

(2) Yupei Supply Chain (a wholly-owned subsidiary of SYPI) as the lessee.

Term 36 months commencing from 1 July 2020 to 30 June 2023.

Subject premises Warehouse No. 4, 1/F, No. 9 One Yongle South Street, Beijing, the PRC.

GFA 11,811.39 sq.m., comprising a warehouse area of 9,445.57 sq.m., office area of 521.57 sq.m. and a canopy area of 1,844.25 sq.m.


Starting monthly rental

Starting service fee Rental deposit

RMB35.22 per sq.m. per month (inclusive of 5% value-added tax), representing a 37.8% increase from the lease agreement currently in effect under the 2019 Property Lease Transactions.


RMB355,404.72.

Use of premises Warehouse storage, office use, logistics purposes and related operations.

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(ii) Chengdu Premises

Parties (1) Chengdu Yuhang Warehousing Company Limited* (成都宇航倉儲有限公司), formerly known as Chengdu Shengbao Steel Structure Company Limited* (成都聖寶鋼結構有限公司) (a subsidiary owned as to 99.99% indirectly by the Company) as the lessor; and


Term 30 months commencing from 1 January 2021 to 30 June 2023.

Subject premises Part of Unit C, Warehouse number W4, 9 Minsheng Road, Qingbaijiang District, Chengdu, the PRC.

GFA 10,326.38 sq.m., comprising a warehouse area of 9,800 sq.m. and a canopy area of 526.38 sq.m..




RMB30.48 per sq.m. per month (inclusive of 5% value-added tax), representing a d e c r e a s e o f 12.4% from the month ly ren ta l s under the lease agreement under the 2018 Property Lease Transactions immediately before the renewal.

RMB20.32 per sq.m. per month (inclusive of 6% value-added tax), representing an increase of 36.3% from the monthly service fees under the lease agreements under the 2018 Property Lease Transactions immediately before the renewal.

RMB483,687.64.

Change in rental and other outgoings

In line with prevailing industry practice, the Group adjusted the proportion of total amounts from approximately 70% rentals and 30% service fees to approximately 60% rentals and 40% service fees, and the total amount to be received by the Group increased slightly.

Use of premises Warehouse storage, logistics purposes and related operations.

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(iii) Xi’an Premises

Parties (1) Shaanxi Xixian New District Yupei Warehousing Company Limited* (陝西西咸新區宇培倉儲有限公司) (a subsidiary owned as to 99.99% indirectly by the Company) as the lessor; and



Subject premises Units A, B and C and the ancillary area of Warehouse number W3, Yupei Xi’an Logistics Park located at West of Xianhu Road, South of Tianyuan Road and North of Xinyuan Road, Fengxi Xincheng, Shaanxi, the PRC.

GFA 15,480.97 sq.m., comprising a warehouse area of 12,986.44 sq.m., a canopy area of 1,727.96 sq.m., and an office area of 766.57 sq.m..






RMB635,811.80.

Use of premises Warehouse storage, logistics purposes, office use and related operations.

— 13 —



(iv) Hongqiao Premises

Parties (1) Shanghai Yupei (a subsidiary owned as to 99.99% indirectly by the Company) as the lessor; and

(2) Shanghai Yupei Industry (a wholly-owned subsidiary of SYPI), as the lessee.


Subject premises 2/F and 5/F, Block A, 1899 Shenkun Road, Shanghai, the PRC.

GFA 5,492.72 sq.m.





RMB42.58 per sq.m. per month (inclusive of 6% value-added tax), representing an increase of 10.0% from the monthly service fees under the lease agreement under the 2018 Property Lease Transactions immediately before the renewal.

RMB552,193.21.


The decrease in monthly rentals is primarily due to the fact that the lessee is being relocated to an unfurnished office space within the same address.

Use of premises Office use.

— 14 —



(v) Xiechun Road Premises

Parties (1) Shanghai Yupei (a subsidiary owned as to 99.99% indirectly by the Company) as the lessor; and



Subject premises 1000 Xiechun Road, Shanghai, the PRC.

GFA 17,464.94 sq.m.






RMB581,340.34.

Use of premises Warehouse storage and related operations.

— 15 —



(vi) Shenyang Premises

Parties (1) Shenyang Yupei Warehousing Company Limited* (瀋陽宇培倉儲有限公司) (a subsidiary owned as to 51.00% indirectly by the Company) as the lessor; and



Subject premises Units A and B and its ancillary area at Warehouse number W3, 17 Shendong Jiudong Road, Shenyang Economic and Technological Development Zone, the PRC.

GFA 10,791.03 sq.m., comprising a warehouse area of 9,648.19 sq.m., a canopy area of 342.3 sq.m., and an office area of 800.54 sq.m..





RMB7.54 per sq.m. per month (inclusive of 6% value-added tax), representing an increase of 29.8% from the monthly service fees under the lease agreement under the 2018 Property Lease Transactions immediately before the renewal.

RMB203,516.99.


The decrease in monthly rentals is primarily due to a lower rental rate in the local market, which in turn was due to a high vacancy rate of logistics facilities in the area. Despite the decrease from the monthly rentals under the current lease agreement to be renewal, the monthly rentals to be charged under the new lease agreement is still slightly higher than the monthly rentals charged to independent third parties under lease agreements signed by the Group in recent months.

Use of premises Warehouse storage, logistics purposes, office use and related operations.

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(vii) Cuiwei Donglu Premises

Parties (1) Suzhou Yupei Warehousing Company Limited* (蘇州宇培倉儲有限公司) (a wholly-owned subsidiary of the Company) as the lessor; and

(2) Shanghai Yupei Express Logistics (a wholly-owned subsidiary of SYPI) as the lessee.


Subject premises Part of units A, B and C, 1/F, Warehouse number 1, 515 East Cuiwei Road, Zhoushi Town, Kunshan, Jiangsu Province, the PRC.

GFA 10,291.32 sq.m., comprising an office area of 295 sq.m., warehouse area of 9,653.32 sq.m. and a canopy area of 343 sq.m..




RMB31.94 per sq.m. per month (inclusive of 5% value-added tax), representing a 9.9% increase from the monthly rentals under the lease agreement currently in effect under the 2018 Property Lease Transactions.

RMB21.29 per sq.m. per month (inclusive of 6% value-added tax), representing a 948.8% increase from the monthly service fee under the lease agreement currently in effect under the 2018 Property Lease Transactions.

RMB310,489.12.


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(viii) Suzhou Premises

Parties (1) Suzhou Yuqing Warehousing Company Limited* (蘇州宇慶倉儲有限公司) (a subsidiary owned as to 99.99% indirectly by the Company) as the lessor; and



Subject premises Units 1 and 2 of Warehouses number C2 and C3, 8 Datong Road, Gaoxin District, Suzhou, the PRC.

GFA 13,164 sq.m., comprising a warehouse area of 11,816 sq.m. and a canopy area of 1,348 sq.m..

6,582 sq.m. of the Suzhou Premises is one of the Six 2018 Premises.




RMB25.73 per sq.m. per month (inclusive of 5% value-added tax), representing a 4.5% increase from the lease agreement currently in effect under the 2018 P r o p e r t y L e a s e Transactions.


RMB218,259.12.


— 18 —



(ix) Wuhu Premises

Parties (1) Wuhu Yupei Warehousing Company Limited* (蕪湖宇培倉儲有限公司) (a subsidiary owned as to 99.00% indirectly by the Company) as the lessor; and

(2) Yupei Supply Chain (a wholly-owned subsidiary of SYPI), as the lessee.


Subject premises Units A and C, Warehouse number 1, intersection of S321 Provincial Road and E’xi Road, Sanshan Economic Development Zone, Wuhu, Anhui Province, the PRC.

GFA 13,624.51 sq.m., comprising a warehouse area of 12,298.55 sq.m., an office area of 847.6 sq.m., and a canopy area of 478.36 sq.m..






RMB266,359.17.


— 19 —



(x) Wuhan Premises

Parties (1) Wuhan Yupei Warehousing Company Limited* (武漢宇培倉儲有限公司) (a wholly-owned subsidiary of the Company) as the lessor; and



Subject premises Part of Unit A, Unit B and Unit C of Warehouse number W1, West side of Wujin Road, North Side of Jinhe North Road, Shamao County, Hannan District, Wuhan, Hubei Province, the PRC.

GFA 13,683.72 sq.m., comprising a warehouse area of 12,464.32 sq.m., office area of 733.25 sq.m. and a canopy area of 486.15 sq.m..

8,243.79 sq.m. of the Wuhan Premises is one of the Six 2018 Premises and 5,439.93 sq.m. of the Wuhan Premises is one of the Two 2019 Premises.




RMB21.35 per sq.m. per month (inclusive of 5% value-added tax), representing a 39.0% increase from the weighted average monthly rentals under the lease agreements currently in effect under the 2018 Property Lease Transactions and the 2019 Property Lease Transactions.

RMB14.24 per sq.m. per month (inclusive of 6% value-added tax), representing a 116.3% increase from the weighted average monthly service fee under the lease agreements currently in effect under the 2018 Property Lease Transactions and the 2019 Property Lease Transactions.

RMB110,702.57.


— 20 —



(d) Historical Figures

In respect of the Premises, the historical figures of the total transaction amounts, the historical annual caps and utilisation rates for the property lease transactions are set out below:

Year ended 31 DecemberThree months ended 31

March2018 2019 2020

ActualAnnual

CapUtilization

Rate ActualAnnual

CapUtilization

Rate ActualAnnual

Cap(RMB’000) (%) (RMB’000) (%) (RMB’000)

Beijing Premises . . . . . . . . . . . . . . . . 3,797 3,990 95.2 3,911 4,109 95.2 1,228 5,174Chengdu Premises . . . . . . . . . . . . . . . 2,663(1) 2,805 94.9 5,269(1) 5,550 94.9 1,419 6,076Xi’an Premises . . . . . . . . . . . . . . . . . . 689 747 92.2 3,410 3,692 92.4 929 4,044Hongqiao Premises . . . . . . . . . . . . . . 3,300 3,589 91.9 6,211 6,734 92.2 1,579 6,936Xiechun Road Premises . . . . . . . . . . . 5,691 5,976 95.2 5,341 6,569 81.3 1,118 6,766Shenyang Premises . . . . . . . . . . . . . . 187(3) 453 41.3 2,052 2,240 91.6 513 2,452Cuiwei Donglu Premises . . . . . . . . . . 3,168(2) 3,328 95.2 3,270(2) 3,436 95.2 628 3,539Suzhou Premises . . . . . . . . . . . . . . . . 1,202 1,266 94.9 2,377 2,504 94.9 640 2,741Wuhu Premises . . . . . . . . . . . . . . . . . 2,643(3) 5,556 47.6 2,812 2,956 95.1 547 3,046Wuhan Premises. . . . . . . . . . . . . . . . . 2,133 2,245(4) 95.0 3,101 3,264(4) 95.0 847 3,604(5)

Notes:

(1) The historical transaction amount of the Chengdu Premises as disclosed in the 2020 CCT

Announcement erroneously included the transaction amount under the lease agreements under the

2017 Property Lease Transactions and the 2019 Property Lease Transactions, which are for other

parts of the warehouse located at the same address of the Chengdu Premises.

(2) The historical transaction amount of the Cuiwei Donglu Premises as disclosed in the 2020 CCT

Announcement erroneously included the transaction amount under the lease agreements under the

2017 Property Lease Transactions and the 2019 Property Lease Transactions, which are for other

parts of the warehouse located at the same address of the Cuiwei Donglu Premises.

(3) The historical transaction amounts for the Wuhu Premises and the Shenyang Premises as disclosed in

the 2020 CCT Announcement have been updated to correct clerical errors.

(4) Representing the sum of the annual caps approved under the 2017 Property Lease Transactions and

the 2018 Property Lease Transactions.

(5) Representing the sum of the annual caps approved under the 2018 Property Lease Transactions and

the 2019 Property Lease Transactions.

(6) Further details of the historical transaction amounts for the years ended 31 December 2018 and 31

December 2019 are set out in the 2018 and 2019 annual reports of the Company.

— 21 —



(e) Proposed Annual Caps

The Board proposes that the below annual caps be set for the lease transactions contemplated under the Lease Framework Agreement in respect of the years ending 31 December 2020, 2021, 2022 and 2023.

For the year ending 31 December2020 2021 2022 2023

(RMB’000)

Beijing Premises 4,160 7,752 7,985 3,678Chengdu Premises — 5,771 5,944 3,340Xi’an Premises 3,815 7,114 7,322 3,373Hongqiao Premises — 6,433 6,626 3,723Xiechun Road Premises 5,897 10,988 11,317 5,213Shenyang Premises — 2,239 2,306 1,296Cuiwei Donglu Premises 3,287 6,125 6,309 2,906Suzhou Premises 3,388 6,313 6,502 2,995Wuhu Premises 2,761 5,144 5,299 2,441Wuhan Premises 2,922 5,445 5,609 2,584Annual cap 26,230 63,324 65,219 31,549

The monthly rental and service fees of each of the Premises have been arrived at after arm’s length negotiations. Such rentals and service fees and therefore the proposed annual caps for the years ending 31 December 2020, 2021, 2022 and 2023 (being the aggregate rentals and service fees payable to the Group by relevant members of the SYPI Group under the respective Lease Agreements for the Premises in each year, respectively) have been determined by the Company with reference to (i) the prevailing market rentals of the Premises according to the fair rent letter issued by the Independent Property Valuer; (ii) the management services associated with the Premises; and (iii) the conditions of the Premises including but not limited to, the actual GFA, potential increase in market value, nature and use of each of the Premises, location, floor level, neighboring area and facilities available.

The Independent Property Valuer has assessed the market rentals of the Premises as at 31 March 2020 and issued the fair rent letter on 17 April 2020. In determining the market rentals, the Independent Property Valuer has taken into consideration aspects including (i) the current market conditions; (ii) the comparable rentals of similar properties in the vicinity of each of the Premises; (iii) the rental that can be agreed under normal commercial terms of tenancy agreements under arm’s length transactions, after proper marketing and where the parties had acted knowledgeably, prudently and without compulsion and (iv) the market outlook for rentals of the types of properties involved and their locations. The Independent Property Valuer is of the opinion that the commercial terms, including the rentals, the 3% rental and service fee increment after each 12-month Rental Cycle and halved monthly rental in two months during each 12-month Rental Cycle under each of the relevant Lease Agreements (as applicable) are fair and reasonable and consistent with and comparable to the prevailing market levels for similar premises in similar locations.

— 22 —



C. INTERNAL CONTROL MEASURES

In order to ensure that the pricing policy in the Lease Framework Agreement is adhered to, the Company will adopt the following internal control measures:

(i) upon obtaining the approval by the Independent Shareholders on the Continuing Connected Transactions and the proposed annual caps, the financial and compliance departments and relevant personnel of the Company shall ensure that the Continuing Connected Transactions will strictly adhere to the pricing policies and terms and conditions set out therein;

(ii) the financial department and relevant personnel of the Company shall be responsible for continuously monitoring, collecting and reviewing the pricing terms and actual transaction amounts under each of the Lease Agreements. It is responsible for collecting the total transaction amounts with respect to the Continuing Connected Transactions on a monthly basis. The marketing and leasing department and the internal audit department and relevant personnel of the Company shall monitor the Continuing Connected Transactions and ensure all transactions contemplated under the Lease Framework Agreement are entered into on normal commercial terms or better, are fair and reasonable, and are carried out pursuant to the terms of the Lease Framework Agreement;

(iii) the independent non-executive Directors will review the Continuing Connected Transactions to be entered into pursuant to the Lease Framework Agreement to ensure all such transactions are entered into on normal commercial terms or better, on terms that are fair and reasonable and in the interests of the Shareholders as a whole, and are carried out in accordance with the terms of the Lease Framework Agreement; and

(iv) the auditor of the Company will also conduct an annual review on the pricing and actual transaction amounts of the Continuing Connected Transactions to be entered into pursuant to the Lease Framework Agreement.

The engagement of designated departments, responsible officers and a clear approval process and monitoring system are hallmarks of an established internal control system. The Directors (including the independent non-executive Directors) are of the view that the above measures and procedures can ensure that the lease transactions contemplated under the Lease Framework Agreement will be conducted on normal commercial terms or better, on terms that are fair and reasonable and in the interests of the Company and its Shareholders as a whole.

— 23 —



D. REASONS AND BENEFITS OF ENTERING INTO THE LEASE FRAMEWORK AGREEMENT

The Group operates the business of developing, leasing and managing logistics facilities, among which includes the provision of warehouse space. On the other hand, members of SYPI Group operate businesses which require warehouse space and office premises to facilitate their operations, namely the storage and sorting of trade commodities, and for logistics purposes and office use. Relevant members of the SYPI Group have been leasing the Three Premises, the Six 2018 Premises and the Two 2019 Premises for their business operations. As the relevant leases in respect of the Three Premises are due to expire in 31 December 2020, the parties wish to extend the existing leases. Moreover, Yupei Supply Chain and Shanghai Yupei Industry have been leasing some of the Group’s existing premises and they have since maintained a good relationship with the Group as lessees. Furthermore, as Yupei Supply Chain has an increased demand for warehouse storage space, particularly for cold chain storage, logistics use and offices to complement their respective business expansion. In response, the Group has installed cold chain equipment and facilities in the Six 2018 Premises and Two 2019 Premises. As such, the Group believes that the Termination Agreements in respect of the Six 2018 Premises and the Two 2019 Premises and the Lease Agreements for each of the Premises with Yupei Supply Chain on normal commercial terms would be mutually beneficial.

As such, the Directors are of the view that terminating the leases in respect of the Six 2018 Premises and the Two 2019 Premises and leasing of the Premises to members of SYPI Group is in line with the Group’s business of leasing and managing logistics facilities, and it is beneficial to the Group to terminate the lease agreements currently in effect under the 2018 Property Lease Transactions and the 2019 Property Lease Transactions in respect of the leasing of the Six 2018 Premises and Two 2019 Premises and lease the Premises to members of SYPI Group at prevailing market rates. Accordingly, the Company and SYPI entered into the Lease Framework Agreement to set out a framework of the terms to govern the Lease Agreements.

The Termination Agreements and the Lease Agreements were entered into on an arm’s length basis. In the course of assessing whether the terms and conditions under the Termination Agreements and the Lease Agreements are no less favorable than the terms and conditions offered by an independent third party, the Directors noticed that the Termination Agreements were entered into in order to enter into the Lease Agreements for the lease of various properties for a new three-year period and a higher rent reflecting the upgraded facility, and the Directors compared the terms and conditions under each of the Lease Agreements with other tenancy agreements entered into by the Group with independent third parties. The Board reviewed fourteen leases entered into between the Group and independent third parties with different terms covering the period from June 2017 to May 2031, and among such leases seven of which had terms commencing from August 2019 to January 2020, to consider and compare the terms and conditions, such as the charges payable in addition to the rental, the increment in rental and service fees after each 12-month Rental Cycle (where applicable), the availability of the halved monthly rental in two months during each 12-month Rental Cycle (where applicable), the lessee’s obligations, restrictions and prohibitions imposed on the Premises, of the Lease Agreements with lease agreements entered into with independent third parties for premises of similar usage, size and nearby geographic locations. The Board is of the opinion that the terms and conditions under the Termination Agreements and the Lease Agreements are on normal commercial terms or better. All the terms and conditions have been revealed to and considered by the Independent Property Valuer during the course of valuation.

— 24 —



E. DIRECTORS’ VIEWS

The Directors (including the independent non-executive Directors) are of the view that the Continuing Connected Transactions will be entered into in the ordinary and usual course of business of the Group, are on normal commercial terms and are fair and reasonable and in the interests of the Company and its Shareholders as a whole. The Directors (other than the independent non-executive Directors) are of the view that the proposed annual caps are fair and reasonable and in the interests of the Company and the Shareholders as a whole. The independent non-executive Directors will form their views in respect of the proposed annual caps for the Continuing Connected Transactions after receiving advice from the independent financial adviser.

None of the Directors has any material interest in the Continuing Connected Transactions or the proposed annual caps or was required to abstain from voting on the Board resolutions in relation to the Continuing Connected Transactions and the proposed annual caps except for Mr. Li. Mr. Li is an executive Director, chairman of the Board and through his interest in Yupei International, is a substantial shareholder of the Company. Mr. Li and his spouse owns 90% and 10% of the equity interest of SYPI, respectively. Accordingly, Mr. Li has abstained from voting on the Board resolutions in respect of the Lease Framework Agreement, the Lease Agreements, the Continuing Connected Transactions and the proposed annual caps.

F. INFORMATION OF THE PARTIES

The Company is an investment holding company and the Group (including certain members of the Group who are parties to the Lease Agreements) is principally engaged in the development and leasing of storage facilities and related management services in the PRC.

SYPI is owned by Mr. Li as to 90% and is an investment holding company. Its subsidiaries are engaged in businesses including e-commerce and logistics.

Yupei Supply Chain is a direct wholly-owned subsidiary of SYPI. It is engaged in the online sales of groceries and daily necessities and the provision of ancillary storage and transportation services through its logistics network.

Shanghai Yupei Industry is a direct wholly-owned subsidiary of SYPI and operates two logistics parks and other businesses.

Shanghai Yupei Express Logistics is an indirect wholly-owned subsidiary of SYPI and operates a cold chain logistics network for transportation of goods such as agricultural produce and imported food.

— 25 —



G. LISTING RULES IMPLICATIONS

Mr. Li, being an executive Director, chairman of the Board and a substantial shareholder (by virtue of his interest in Yupei International) of the Company, is a connected person of the Company under Rule 14A.07 of the Listing Rules. SYPI is owned by Mr. Li as to 90% and is therefore an associate of Mr. Li and hence a connected person of the Company. Yupei Supply Chain, Shanghai Yupei Industry and Shanghai Yupei Express Logistics is each a wholly-owned subsidiary of SYPI and are therefore associates of Mr. Li and connected persons of the Company. Accordingly, the transactions between the Group and SYPI Group as contemplated under the Lease Framework Agreement and the Lease Agreements constitute continuing connected transactions of the Company under the Listing Rules.

Since one of the relevant percentage ratios under the Listing Rules in respect of the Continuing Connected Transactions is expected to be more than 5% on an annual basis, the Continuing Connected Transactions are subject to the annual reporting, annual review, announcement, circular and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

An EGM will be convened to consider and, if thought fit, to approve the Continuing Connected Transactions and the proposed annual caps. As at the Latest Practicable Date, Yupei International holds approximately 28.34% of the total issued share capital of the Company. Yupei International is owned as to 90% by Lee International Investment Management Co., Ltd, which is in turn wholly-owned by Mr. Li. In accordance with the Listing Rules, Mr. Li and his associates, including Yupei International, will abstain from voting on the ordinary resolution to approve the Continuing Connected Transactions and the proposed annual caps at the EGM.

An Independent Board Committee comprising all the independent non-executive Directors has been established to advise the Independent Shareholders in respect of the Continuing Connected Transactions and the proposed annual caps. In this respect, an independent financial adviser shall be appointed to advise the Independent Board Committee and the Independent Shareholders.

— 26 —



3. EXTRAORDINARY GENERAL MEETING

The notice convening the EGM to be held at Meeting Room, 8/F, Block A, No. 1899 Shenkun Road, Minhang District, Shanghai, China on Monday, 29 June 2020 at 2:20 p.m. (or immediately after the conclusion or adjournment of the Annual General Meeting) is set out on pages EGM-1 to EGM-2 of this circular. At the EGM, a resolution will be proposed to approve the Continuing Connected Transactions and the proposed annual caps.

As at the Latest Practicable Date, Yupei International holds approximately 28.34% of the total issued share capital of the Company. Yupei International is owned as to 90% by Lee International Investment Management Co., Ltd, which is in turn wholly-owned by Mr. Li. In accordance with the Listing Rules, Mr. Li and his associates, including Yupei International, will abstain from voting at the EGM on the ordinary resolution to approve the Continuing Connected Transactions and the proposed annual caps.

A form of proxy for use at the EGM is enclosed with this circular and such form of proxy is also published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.cnlpholdings.com). Whether or not you are able to attend the EGM, please complete and sign the form of proxy in accordance with the instructions printed thereon and return it, together with the power of attorney or other authority (if any) under which it is signed or a certified copy of that power of attorney or authority, to the Company’s share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, as soon as possible but in any event not less than 48 hours before the time appointed for holding the EGM (i.e. not later than 2:20 p.m. on Saturday, 27 June 2020) or any adjournment thereof. Completion and delivery of the form of proxy will not preclude you from attending and voting at the EGM or any adjournment thereon if you so wish and in such event, your proxy form shall be deemed to be revoked.

4. VOTING BY WAY OF POLL

Under the Listing Rules, the Continuing Connected Transactions and the proposed annual caps are subject to the approval of the Independent Shareholders. Any connected person who is a Shareholder and has a material interest in the Continuing Connected Transactions, and any other Shareholder with a material interest in the Continuing Connected Transactions and their respective associates (as defined in the Listing Rules), shall abstain from voting on the resolution to approve the Continuing Connected Transactions and the proposed annual caps. Accordingly, Mr. Li and his associates, including Yupei International, will be required to abstain from voting on the ordinary resolution to approve the Continuing Connected Transactions and the proposed annual caps at the EGM.

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll except for those resolution relating purely to procedural or administrative matter which may be voted on by a show of hands. Accordingly, the proposed resolution will be put to vote by way of poll at the EGM. An announcement on the poll results will be made by the Company after the EGM in the manner prescribed under Rule 13.39(5) of the Listing Rules.

— 27 —



5. RECOMMENDATION

Crescendo Capital has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Continuing Connected Transactions and the proposed annual caps. Crescendo Capital considers that the Continuing Connected Transactions have been entered into in the ordinary and usual course of business of the Group, are on normal commercial terms and are fair and reasonable and in the interests of the Company and the Shareholders as a whole, and that the proposed annual caps are fair and reasonable and in the interests of the Company and its Shareholders as a whole. Accordingly, Crescendo Capital advises the Independent Shareholders, as well as the Independent Board Committee to recommend the Independent Shareholders, to vote in favor of the ordinary resolution to be proposed at the EGM. The text of the letter from Crescendo Capital containing its advice and the principal factors and reasons it has taken into consideration in arriving at its advice is set out on pages 30 to 45 of this circular.

The Independent Board Committee, having taken into account the fair rent letter issued by Colliers and the advice of Crescendo Capital, considers that the Continuing Connected Transactions have been entered into in the ordinary and usual course of business of the Group, are on normal commercial terms, are fair and reasonable so far as the Independent Shareholders are concerned, and in the interests of the Company and its Shareholders as a whole, and that the proposed annual caps are fair and reasonable so far as the Independent Shareholders are concerned, and in the interests of the Company and its Shareholders as a whole. Accordingly, the Independent Board Committee recommends that Independent Shareholders vote in favour of the ordinary resolution to be proposed at the EGM to approve the Continuing Connected Transactions and the proposed annual caps, as detailed in the notice of the EGM set out on pages EGM-1 and EGM-2 of this circular. The text of the letter from the Independent Board Committee is set out on pages 28 to 29 of this circular.

The Directors (including the independent non-executive Directors) are of the view that the Continuing Connected Transactions will be entered into in the ordinary and usual course of business of the Group, are on normal commercial terms and are fair and reasonable and in the interests of the Company and its Shareholders as a whole. The Directors (including the independent non-executive Directors) are of the view that the proposed annual caps are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Continuing Connected Transactions and the proposed annual caps.

6. FURTHER INFORMATION

Your attention is drawn to the letter from the Independent Board Committee to the Independent Shareholders set out on pages 28 and 29 of this circular, and the letter from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Continuing Connected Transactions and the proposed annual caps set out on pages 30 to 45 of this circular.

Your attention is also drawn to the general information set out in the Appendix to this circular.

Yours faithfully,By Order of the Board

China Logistics Property Holdings Co., LtdLi Shifa

Chairman

— 28 —


LETTER FROM THE INDEPENDENT BOARD COMMITTEE



(Stock Code: 1589)

28 May 2020

To the Independent Shareholders

Dear Sir or Madam,

We refer to the circular of the Company to the Shareholders dated 28 May 2020 (the “Circular”) of which this letter forms part. Terms used herein shall have the same meanings as given to them in the Circular unless the context otherwise requires.

We have been appointed by the Board as the Independent Board Committee to advise the Independent Shareholders on whether the Continuing Connected Transactions are on normal commercial terms and are fair and reasonable and in the interests of the Company and the Shareholders as a whole and whether the proposed annual caps are fair and reasonable and are in the interests of the Company and its Shareholders as a whole.

Crescendo Capital Limited has been appointed by the Company as the independent financial adviser to advise us and the Independent Shareholders in respect of the Continuing Connected Transactions and the proposed annual caps.

We wish to draw your attention to the letter from the Board set out on pages 5 to 27 of the Circular which contains, among others, information on the Continuing Connected Transactions and the proposed annual caps, as well as the letter from the Independent Financial Adviser set out on pages 30 to 45 of the Circular which contains its advice and recommendations in respect of the Continuing Connected Transactions and the proposed annual caps and the principal factors and reasons taken into consideration for its advice and recommendations.

Having taken into account the fair rent letter issued by Colliers and the advice of Crescendo Capital, we consider that the Continuing Connected Transactions have been entered into in the ordinary and usual course of business of the Group, are on normal commercial terms, are fair and reasonable so far as the Independent Shareholders are concerned, and in the interests of the Company and the Shareholders as a whole, and that the proposed annual caps are fair and reasonable so far as the Independent Shareholders are concerned, and in the interests of the Company and its Shareholders as a whole.

— 29 —


LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM.

Yours faithfully,Independent Board Committee

Guo Jingbin Fung Ching Simon

Wang Tianye Leung Chi Ching Frederick

Chen Yaomin

Independent Non-executive

Director


Director


Director


Director


Director

— 30 —


LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the full text of the letter of advice from the Independent Financial Adviser setting out its advice to the Independent Board Committee and the Independent Shareholders in respect of the Continuing Connected Transactions prepared for the purpose of inclusion in this circular.

1506 Tai Tung Building8 Fleming RoadWanchai, Hong Kong

28 May 2020

China Logistics Property Holdings Co., LtdUnit 3213, Cosco Tower183 Queen’s Road CentralSheung WanHong Kong

To the Independent Board Committee and the Independent Shareholders

Dear Sirs,

CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

We refer to our engagement as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Continuing Connected Transactions contemplated under the Lease Framework Agreement and the proposed annual caps thereof for the years ending 31 December 2020, 2021, 2022 and 2023 (the “Annual Caps”), details of which are set out in the Letter from the Board contained in the circular dated 28 May 2020 to the Shareholders (the “Circular”), of which this letter forms part. Capitalized terms used in this letter have the same meanings as defined elsewhere in the Circular unless the context otherwise requires.

On 29 April 2020, relevant members of the Group and relevant members of the SYPI Group entered into the Termination Agreements to terminate the current lease agreements in respect of the Six 2018 Premises and the Two 2019 Premises with effect from 30 June 2020, and the Company entered into the Lease Framework Agreement with SYPI, pursuant to which the Company and SYPI agreed that relevant members of the Group and relevant members of the SYPI Group shall further enter into the Lease Agreements in respect of the leasing of each of the Premises based on the pricing policy as set out in the Lease Framework Agreement. On 29 April 2020, members of the Group entered into ten separate Lease Agreements with members of the SYPI Group for the leasing of the Premises.

— 31 —



Mr. Li, being an executive Director and a substantial Shareholder (by virtue of his interest in Yupei International which held approximately 28.34% of the total issued share capital of the Company as at the Latest Practicable Date), is a connected person of the Company under Rule 14A.07 of the Listing Rules. As at the Latest Practicable Date, SYPI was owned as to 90% by Mr. Li and 10% by the spouse of Mr. Li, and was therefore an associate of Mr. Li and a connected person of the Company. Yupei Supply Chain, Shanghai Yupei Industry and Shanghai Yupei Express Logistics, all being the counterparties of the Lease Agreements, are wholly-owned subsidiaries of SYPI and therefore associates of Mr. Li and connected persons of the Company. Accordingly, the transactions between the Group and the SYPI Group as contemplated under the Lease Framework Agreement and the Lease Agreements constitute continuing connected transactions of the Company under the Listing Rules. Since one of the relevant percentage ratios under the Listing Rules in respect of the Continuing Connected Transactions is more than 5% on an annual basis, the Continuing Connected Transactions are subject to annual reporting, annual review, announcement, circular and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

The EGM will be convened to consider and, if thought fit, to approve, by way of poll, the Continuing Connected Transactions and the Annual Caps by the Independent Shareholders. As at the Latest Practicable Date, Yupei International, a company owned as to 90% by Lee International Investment Management Co., Ltd, which in turn was wholly-owned by Mr. Li, held approximately 28.34% of the total issued share capital of the Company. Mr. Li and his associates, including Yupei International, will abstain from voting at the EGM on the ordinary resolution to approve the Continuing Connected Transactions and the Annual Caps.

The Independent Board Committee, comprising Mr. Guo Jingbin, Mr. Fung Ching Simon, Mr. Wang Tianye, Mr. Leung Chi Ching Frederick and Mr. Chen Yaomin, all being independent non-executive Directors, has been established to advise the Independent Shareholders as to whether the terms of the transactions contemplated under the Lease Framework Agreement are fair and reasonable, such transactions are on normal commercial terms and conducted in the ordinary and usual course of business of the Group, and, including the Annual Caps, are in the interests of the Company and Shareholders as a whole. We, Crescendo Capital Limited, have been appointed to advise the Independent Board Committee and the Independent Shareholders on the fairness and reasonableness of the terms of the Lease Framework Agreement and how to vote on the resolution to be proposed at the EGM.

We are not associated with the Group and its associates and do not have any shareholding in any member of the Group or right (whether legally enforceable or not) to subscribe for, or to nominate persons to subscribe for, securities in any member of the Group. Save for acting as an independent financial adviser in this appointment and the occasions as detailed in the circulars of the Company dated 23 May 2018 and 10 June 2019, we have not acted as a financial adviser or an independent financial adviser to the Company and its associates in the past two years. Apart from normal professional fees payable to us in connection with this appointment, no arrangements exist whereby we will receive any fee or benefit from the Group and its associates. We are not aware of any relationship or interest between us and the Company or other parties that would be reasonably considered to affect our independence to act as an independent financial adviser to the Independent Board Committee and the Independent Shareholders.

— 32 —



BASIS OF OUR OPINION

In formulating our opinion and recommendation, we have relied on the information and representations supplied, and the opinions expressed, by the Directors and management of the Company and have assumed that such information and statements, and representations made to us or referred to in the Circular are true, accurate and complete in all material respects as of the date hereof and will continue as such at the date of the EGM. The Directors have collectively and individually accepted full responsibility for the Circular, including particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group and having made all reasonable enquiries have confirmed that, to the best of their knowledge and belief, the information contained in the Circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement in the Circular misleading.

We consider that we have reviewed sufficient information to reach an informed view, to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our recommendation. We have no reasons to suspect that any material information has been withheld by the Directors or management of the Company, or is misleading, untrue or inaccurate, and consider that the information provided to us may be relied upon in formulating our opinion. We have not, however, for the purpose of this exercise, conducted any independent detailed investigation or audit into the businesses or affairs or future prospects of the Group and the related subjects of, and parties to, the Lease Framework Agreement, the Lease Agreements and the Termination Agreements. Our opinion is necessarily based on the financial, economic, market and other conditions in effect and the information made available to us as at the Latest Practicable Date. Shareholders should note that subsequent developments (including any material change in market and economic conditions) may affect and/or change this opinion and we do not have any obligation to update, revise or reaffirm this opinion.

— 33 —



PRINCIPAL FACTORS AND REASONS CONSIDERED

In assessing the Continuing Connected Transactions and arriving at our opinion, we have taken into consideration the following principal factors and reasons:

1. Background and reasons for the Continuing Connected Transactions

The Company is an investment holding company and the Group (including certain members of the Group who are parties to the Lease Agreements) is principally engaged in the development and leasing of storage facilities and provision of related management services in the PRC.

SYPI is owned by Mr. Li as to 90% and is an investment holding company. Its subsidiaries are engaged in businesses which require warehouse space and office premises to facilitate their operations, including e-commerce and logistics. Yupei Supply Chain is a direct wholly-owned subsidiary of SYPI and is engaged in the online sales of groceries and daily necessities and the provision of ancillary storage and transportation services through its logistics network. Shanghai Yupei Industry is a direct wholly-owned subsidiary of SYPI and operates two logistics parks and other businesses. Shanghai Yupei Express Logistics is an indirect wholly-owned subsidiary of SYPI and operates a cold chain logistics network for transportation of goods such as agricultural produce and imported food.

The relevant members of the SYPI Group have been leasing from the Group the Premises for their business operations. The existing leases in respect of the Three Premises will expire on 31 December 2020. The relevant members of the Group and the relevant members of the SYPI Group intend to renew the property leases in respect of the leasing of each of the Three Premises, having considered that warehouse storage space and premises for logistics and office uses are indispensable for conducting business operations of the SYPI Group and a good business relationship has been established between the relevant members of the Group as lessors and the relevant members of the SYPI Group as lessees.

Moreover, Yupei Supply Chain and Shanghai Yupei Express Logistics have increasing demands on warehouse storage space, particularly cold chain storage, and premises for logistics and office uses as their businesses continue to expand. Having considered the good relationship between the relevant members of the Group as lessors and Yupei Supply Chain and Shanghai Yupei Express Logistics as lessees, the Group has installed cold chain equipment and facilities in the Six 2018 Premises and the Two 2019 Premises. In light of the installation of cold chain equipment and facilities in the Six 2018 Premises and the Two 2019 Premises to suit the business need of relevant members of the SYPI Group, relevant members of the Group, on one hand, and (1) Yupei Supply Chain and (2) Shanghai Yupei Express Logistics, respectively, on the other hand, wish to terminate the property leases in respect of the leasing of each of the Six 2018 Premises and the Two 2019 Premises and enter into new lease agreements in respect of the leasing of each of the Six 2018 Premises and the Two 2019 Premises for a three-year period commencing from 1 July 2020 with a higher rent to reflect the facilities upgrade.

As such, on 29 April 2020, the relevant members of the Group and relevant members of the SYPI Group entered into the Termination Agreements which provide for (i) the termination of the current lease agreements in respect of the Six 2018 Premises and the Two 2019 Premises, effective 30 June 2020 pursuant to the respective terms of the lease agreements; (ii) new lease agreements shall be entered into for the leasing of each of the Six 2018 Premises and the Two 2019 Premises; and (iii) the security deposit under the current lease agreements shall be refunded. Meanwhile, the Company and SYPI entered into the Lease Framework Agreement, which is a master agreement setting out a framework of the terms to govern the Lease Agreements in respect of the leasing of the Premises to members of the SYPI Group at the prevailing market rates.

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Given that the existing lease agreements of the Six 2018 Premises and the Two 2019 Premises cannot reflect the rentals of the newly added facilities, we consider that it is reasonable for the Group to terminate the existing lease agreements and enter into new lease agreements in respect of the Six 2018 Premises and the Two 2019 Premises to adjust the rentals for the addition of the cold chain equipment and facilities and the entering into of the Termination Agreements are commercial transactions conducted in the ordinary and usual course of business of the Group and in the interest of the Company and Shareholders as a whole.

Meanwhile, having considered that (i) leasing of properties and provision of related management services are core businesses and major sources of income of the Group; and (ii) the Continuing Connected Transactions shall contribute a stable and reliable income to the Group, we consider that the Continuing Connected Transactions are commercial transactions conducted in the ordinary and usual course of business of the Group and it is reasonable and in the interest of the Company and Shareholders as a whole to conduct the Continuing Connected Transactions contemplated under the Lease Framework Agreement.

2. Principal terms of the Lease Framework Agreement

The Lease Framework Agreement sets out a framework of terms on which the Company has agreed to procure members of the Group to lease the Premises (including warehouse areas, office premises and canopy areas) to members of the SYPI Group for use in its business and operations. The Lease Framework Agreement is for a term of three years commencing from 1 July 2020 to 30 June 2023. The parties to the agreement may extend the Lease Framework Agreement for a further term of three years within six months before the expiry of the three-year term of the agreement, subject to compliance with the relevant requirements under the Listing Rules.

Pursuant to the Lease Framework Agreement, the relevant members of the Group shall further enter into separate agreements with the relevant members of the SYPI Group in order to set out the specific terms and conditions of the leasing of the Premises. The pricing terms of each Lease Agreement shall be determined according to the following guidelines:

(a) the terms of the Lease Agreements shall be negotiated and agreed by the parties on an arm’s length basis;

(b) the rentals under the Lease Agreements shall represent the prevailing market rents of similar premises in neighboring areas based on available property rental market comparables, actual GFA of each of the leased Premises and the potential increase in the value of such Premises;

(c) the service fees under the Lease Agreements shall be determined with reference to the nature and use of the relevant Premises;

(d) annual increments in rentals and service fees shall be determined by reference to the potential increase in the value of the Premises; and

(e) where property rental market comparables are unavailable, the pricing terms shall be determined on a fair and reasonable basis which is equivalent or comparable to those offered to or quoted by third parties independent of the Company for similar premises.

Parties to the Lease Framework Agreement have also agreed that the Lease Agreements shall not be renewed unless and until the Company re-complies with the applicable requirements under the Listing Rules.

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On 29 April 2020, members of the Group entered into 10 separate Lease Agreements with members of the SYPI Group for the leasing of the Premises, the locations of which are set out as follows:

(i) Warehouse No. 4, 1/F, No. 9 One Yongle South Street, Beijing, the PRC (the “Beijing Premises”);

(ii) Part of Unit C, Warehouse number W4, 9 Minsheng Road, Qingbaijiang District, Chengdu, the PRC (the “Chengdu Premises”);

(iii) Units A, B and C and the ancillary area of Warehouse number W3, Yupei Xi’an Logistics Park located at West of Xianhu Road, South of Tianyuan Road and North of Xinyuan Road, Fengxi Xincheng, Shaanxi, the PRC (the “Xi’an Premises”);

(iv) 2/F and 5/F, Block A, 1899 Shenkun Road, Shanghai, the PRC (the “Hongqiao Premises”);

(v) 1000 Xiechun Road, Shanghai, the PRC (the “Xiechun Road Premises”);

(vi) Units A and B and its ancillary area at Warehouse number W3, 17 Shendong Jiudong Road, Shenyang Economic and Technological Development Zone, the PRC (the “Shenyang Premises”);

(vii) Parts of units A, B and C, 1/F, Warehouse number 1, 515 East Cuiwei Road, Zhoushi Town, Kunshan, Jiangsu Province, the PRC (the “Cuiwei Donglu Premises”);

(viii) Units 1 and 2 of Warehouses number C2 and C3, 8 Datong Road, Gaoxin District, Suzhou, the PRC (the “Suzhou Premises”);

(ix) Units A and C, Warehouse number 1, intersection of S321 Provincial Road and E’xi Road, Sanshan Economic Development Zone, Wuhu, Anhui Province, the PRC (the “Wuhu Premises”); and

(x) Part of Unit A, Unit B and Unit C of Warehouse number W1, West side of Wujin Road, North Side of Jinhe North Road, Shamao County, Hannan District, Wuhan, Hubei Province, the PRC (the “Wuhan Premises”).

The initial terms of the Lease Agreements range from 30 months to 36 months and all of the Lease Agreements will expire on 30 June 2023, which is also the expiry date of the Lease Framework Agreement. Details of the specific terms of the Lease Agreements are set out in the Letter from the Board in the Circular.

A monthly rental (exclusive of tax (other than value-added tax) and any other fees due to the PRC Government) is payable in advance. The monthly rental will be subject to a 3% increment after each 12-month period during the term of the relevant Lease Agreement (a “12-month Rental Cycle”). The monthly rental is halved for two consecutive months during each 12-month Rental Cycle, which in effect provides for a one-month rent-free period during each 12-month Rental Cycle. An upfront rental deposit is payable and may be returned upon the expiration of the lease, subject to any forfeiture or deduction by the lessor as a result of default on the part of the lessee. A monthly service fee is payable in advance and subject to an annual 3% increment. In the event that adjustment is made to the type of tax or tax rate as may be applicable to rentals or service fees (as the case may be) during the term of the relevant Lease Agreement, the parties to a Lease Agreement agree to adjust the rental and service fees accordingly, on the basis that the base rental or service fee amount that is exclusive of value-added tax will not be altered.

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Other charges arising from the actual usage of each of the Premises, including but not limited to utility charges (such as water, electricity, heating) and network communications fees, and such corresponding expenses to be contributed from occupiers, are to be borne by the relevant member of the SYPI Group as the lessee under the relevant Lease Agreement.

In order to assess the fairness and reasonableness of the 3% increment of rental after each 12-month Rental Cycle, we have independently reviewed an industry research report, namely “Asia Pacific Real Estate Market Outlook 2020 — Greater China” (the “CBRE Research”) published on 11 March 2020 by CBRE Group, an independent world-wide commercial real estate services and valuation firm listed in the New York Stock Exchange and has been included on the Fortune 500 since 2008 and named as one of Fortune’s “Most Admired Companies” for eight years in a row, including being ranked number one in the real estate sector in 2020. According to the CBRE Research, the year-on-year rental growth rate for warehouse in 16 major cities in the PRC for year 2019 ranged from -4% to 4% and it was forecasted that such rate for years 2020 and 2021 would be ranged from -2% to 3.5%. In particular, tier I cities and tier II cities in Eastern China, which continue to see a lack of new supply, will enjoy healthy rental growth rate ranging from 1.5% to 3% for years 2020 and 2021. Given that (i) the 16 cities tracked by the CBRE Research cover the major cities in the PRC which include both first-tier and second-tier cities and are therefore representative to give a general picture of the warehouse real estate market in the PRC; (ii) the study of the CBRE Research covered certain cities where premises under the Lease Agreements are located; (iii) the CBRE Research was published within three months from the date of the Lease Agreements and therefore the information thereof is up-to-date to reflect the latest market situation in the warehouse real estate sector; and (iv) the CBRE Research published by CBRE Group is considered to be reliable and creditable having considered the background of CBRE Group and the fact that it is independent from the Group, we are of the view that the CBRE Research is a fair and reasonable benchmark for us in assessing the rental growth rate under the Lease Agreements. We noted that the 3% increment of rental after each 12-month Rental Cycle falls within the range of the historical and forecasted year-on-year rental growth rate of the warehouse real estate market in the major cities in the PRC. As such, we are of the opinion that the 3% increment of the rental after each 12-month Rental Cycle for the Premises is fair and reasonable and in the interest of the Company and the Shareholders as a whole.

To renew the leases of the Premises, the lessee is required to serve a written notice to the relevant lessor at least six months prior to the expiration of the relevant Lease Agreement expressing its intention to renew the lease. A renewed lease agreement shall be on the exact same terms as the expired Lease Agreement except that the renewed lease agreement shall be for a term of not more than 36 months and the rental under the renewed lease agreement may be determined in accordance with the market conditions.

Management of the Company confirmed us that the monthly rental and service fees of each of the Premises under the Lease Agreements have been arrived at after arm’s length negotiations with reference to (i) the prevailing market rents of the Premises according to the fair rent letter issued by the Independent Property Valuer; (ii) the management services associated with the Premises; and (iii) the conditions of the Premises including but not limited to, the actual GFA, potential increase in market value, nature and use of the Premises, location, floor level, neighboring area and facilities available.

We noted that the Group has engaged the Independent Property Valuer to assess the market rents of the Premises. According to the fair rent letter prepared by the Independent Property Valuer and dated 17 April 2020, the Independent Property Valuer was of the opinion that the commercial terms, including the rentals, and where applicable, the service fees, as well as the 3% rental or service fee increment after each 12-month Rental Cycle, and the sum of monthly rental and service fee halved in two consecutive months during each 12-month Rental Cycle, which in effect provides an annual one-month rent-free period, under each of the relevant Lease Agreements are fair and reasonable and in line with current and expected market rental levels for similar premises in similar locations.

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We have performed work as required under Note 1(d) to Rule 13.80 of the Listing Rules and paragraph 8(v) of the HKEx Guidance Letter HKEx-GL-14 in respect of the rental assessment of the Premises performed by the Independent Property Valuer, including discussing with the Independent Property Valuer as to its experience in rental assessment for properties in the PRC similar to that of the Premises and its relationship with the Group and other parties to the Termination Agreements, the Lease Framework Agreement and the Lease Agreements, and reviewing the terms of the Independent Property Valuer’s engagement for the rental assessment, in particular its scope of work. We understand that the Independent Property Valuer is a member of the Royal Institution of Chartered Surveyors and has experience in a number of market rents assessment engagements that are similar to those of the rental assessment of the Premises. Furthermore, we understand that Ms. Zhirong He (Flora He), the executive director of the Independent Property Valuer and the signor of the fair rent letter, is a fellow member of the Royal Institution of Chartered Surveyors with over 15 years of experience in real estate industry and asset valuation sector covering Mainland China. As such, we are of the view that the Independent Property Valuer is qualified, experienced and competent in performing the rental assessment and to form a reliable opinion in respect of the rental value of the Premises.

We have reviewed the engagement letter entered into between the Company and the Independent Property Valuer and noted that the scope of work was appropriate for the Independent Property Valuer to provide the opinion of value required to be given and there were no limitations on the scope of work which might adversely impact the degree of assurance given by it in the fair rent letter. We have interviewed the Independent Property Valuer by phone and the Independent Property Valuer confirmed us that apart from normal professional fees payable to it in connection with its engagement for the rental assessment of the Premises, no arrangements exist whereby it will receive any fee or benefit from the Group and its associates. We have enquired with the Independent Property Valuer as to its independence from the Group and were given a written confirmation that the Independent Property Valuer is a third party independent of the Company and its connected persons. The Independent Property Valuer also confirmed us that it was not aware of any relationship or interest between it and the Company or any other party that would be reasonably considered to affect its independence to act as an independent valuer for the Company. We have also discussed with the Independent Property Valuer and management of the Company regarding the representations made by the Company to the Independent Property Valuer and noted that those representations made are in accordance with our knowledge.

We have reviewed the fair rent letter in respect of the Premises prepared by the Independent Property Valuer and discussed with the Independent Property Valuer the methodology, basis and assumptions adopted in arriving at the market rent of the Premises as at 31 March 2020. We understand from the Independent Property Valuer that the fair rent letter was prepared in compliance with the relevant standards and guidelines issued by International Valuation Standards Council and Royal Institution of Chartered Surveyors and the requirements as set out in Chapter 5 and Practice Note 12 of the Listing Rules. The Independent Property Valuer advised us that market approach was adopted in arriving at the market rents of the Premises given the nature of use and other particulars of the Premises and the availability of comparable market transactions. We noted that in assessing the market rents, the Independent Property Valuer has considered the current market condition and the market outlook for rents of the types of properties involved and their locations, examined five comparable rentals of similar properties in the nearby vicinity of each of the Premises, and assessed market rents on the basis of market rent, being defined as the estimated amount for which an interest in real property should be leased on the valuation date between a willing lessor and a willing lessee on appropriate lease terms in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion. The details of the comparable rentals used by the Independent Property Valuer (the “Valuation Comparable”) are set out in the following table.

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Comparables

Asked/transacted

GFA

Date of transaction/asking

Daily rent including value

added tax and service fee

sq.m. RMB per sq.m.

Beijing comparable 1 500 Q4 2019 2.00


Beijing comparable 3 1,000 Q4 2019 2.10



Chengdu comparable 1 1,000 Q4 2019 2.30

Chengdu comparable 2 300 Q4 2019 1.90



Chengdu comparable 5 1,000 Q4 2019 1.90

Xi’an comparable 1 900 Q4 2019 1.10




Xi’an comparable 5 1,000 Q4 2019 2.30

Hongqiao comparable 1 300 Q4 2019 4.70





Xiechun Road comparable 1 100 Q4 2019 2.90


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Comparables

Asked/transacted

GFA




sq.m. RMB per sq.m.


Xiechun Road comparable 4 1,000 Q4 2019 2.50


Shenyang comparable 1 3,000 Q4 2019 0.75


Shenyang comparable 3 300 Q4 2019 0.55



Cuiwei Donglu comparable 1 500 Q4 2019 2.00



Cuiwei Donglu comparable 4 1,000 Q4 2019 2.20


Suzhou comparable 1 500 Q4 2019 2.00

Suzhou comparable 2 1,000 Q4 2019 1.85

Suzhou comparable 3 500 Q4 2019 1.65



Wuhu comparable 1 500 Q4 2019 2.00




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Comparables

Asked/transacted

GFA




sq.m. RMB per sq.m.


Wuhan comparable 1 500 Q4 2019 1.60

Wuhan comparable 2 1,000 Q4 2019 1.80

Wuhan comparable 3 800 Q4 2019 1.80



We have discussed with the Independent Property Valuer the selection criteria of, and reviewed, the Valuation Comparables for assessing the market rents of the Premises. The selection criteria of the Valuation Comparables include (i) warehouses, and warehouse with cold chain equipment and facilities located in the vicinity of the relevant Premises; and (ii) transaction/asking date falls within the period from 1 October 2019 to the date of the fair rent letter. We understand from the Independent Property Valuer that criterion (i) is set for limiting the Valuation Comparables which are comparable to the Premises in terms of nature and location, and criterion (ii) is set to ensure the Valuation Comparables fall within a reasonable time frame to reflect the current market rents. We further understand from the Independent Property Valuer that adjustment factors including size, location and building quality have been considered in assessing the market rents of the Premises. Given the Valuation Comparables are current asking price/transactions with property located in the vicinity of the relevant Premises with similar nature, we concur with the view of the Independent Property Valuer that the Valuation Comparables used in assessing the market rents of the Premises are fair and representative samples for comparison with the Premises. We also understand from the Independent Property Valuer that it had carried out on-site inspections and made relevant enquiries and searches for the purpose of the assessment and no irregularities were noted during the course of the assessment.

Given the methodology applied by the Independent Property Valuer is one of the generally accepted procedures and practices of professional surveyors and is in compliance with the standards published by International Valuation Standards Council and Royal Institution of Chartered Surveyors, we consider that the methodology and basis adopted by the Independent Property Valuer for determining the market rents of the Premises is appropriate.

As advised by management of the Company, as at the Latest Practicable Date, save for a lease agreement entered into with an independent third party regarding premises installed with cold chain equipment and facilities in Beijing, the Group has not entered into any lease agreement with independent third party regarding premises installed with cold chain equipment and facilities in the same city where the Six 2018 Premises and the Two 2019 Premises are located. We have reviewed and compared the terms of the Lease Agreement regarding the Beijing Premises and the abovementioned third party comparable transaction in Beijing and noted that the major terms such as rentals and service fees and rental deposit offered to the SYPI Group are comparable to those offered to the independent third party. In addition,

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we noted that the terms of the Lease Agreements in respect of the Six 2018 Premises and the Two 2019 Premises are fair and reasonable and in line with the current and expected rental levels for similar premises in similar locations as set out in the fair rent letter prepared by the Independent Property Valuer which have been arrived at after considering the current market condition and the market outlook for rents of the types of properties involved and their locations as well as rentals of similar properties in the vicinity of each of the subject premises.

Meanwhile, we have also reviewed and compared the terms of the Lease Agreements for the Three Premises with nine lease agreements entered into between the Group and independent third parties in respect of similar properties in the same cities where the Three Premises are located, which we considered are fair and representative samples, and noted that (i) the rentals and service fees of the Chengdu Premises and the Shenyang Premises are higher than the maximum rentals and service fees of the relevant Chengdu comparable transactions and Shenyang comparable transactions respectively while the rental and service fee of the Hongqiao Premises falls within the range of the relevant Hongqiao comparable transactions; and (ii) the rental deposit and rent-free period offered to the SYPI Group regarding the Three Premises fall within the range of the terms offered to the independent third parties under the comparable transactions.

Having considered the abovementioned factors, we consider that the terms of the Lease Framework Agreements and the Lease Agreements are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned.

3. Internal control measures

As disclosed in the Letter from the Board, the Company is committed to adopting the following internal control measures to ensure the terms of the Lease Framework Agreement is adhered to:

(a) upon obtaining the approval by the Independent Shareholders on the Continuing Connected Transactions and the Annual Caps, the finance and compliance departments and relevant personnel of the Company shall ensure that the Continuing Connected Transactions will strictly adhere to the pricing policies and terms and conditions set out therein;

(b) the finance department and relevant personnel of the Company shall be responsible for continuously monitoring, collecting and reviewing the pricing terms and actual transaction amounts under each of the Lease Agreements. It is responsible for collecting the total transaction amounts with respect to the Continuing Connected Transactions on a monthly basis. The marketing and leasing department and the internal audit department and relevant personnel of the Company shall monitor the Continuing Connected Transactions and ensure all transactions contemplated under the Lease Framework Agreement are entered into on normal commercial terms or better, are fair and reasonable, and are carried out pursuant to the terms of the Lease Framework Agreement;

(c) the independent non-executive Directors will review the Continuing Connected Transactions entered/to be entered into pursuant to the Lease Framework Agreement to ensure all such transactions are entered into on normal commercial terms or better, on terms that are fair and reasonable and in the interests of the Shareholders as a whole, and are carried out in accordance with the terms of the Lease Framework Agreement; and

(d) the auditor of the Company will also conduct an annual review on the pricing and actual transaction amounts of the Continuing Connected Transactions entered/to be entered into pursuant to the Lease Framework Agreement.

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We have discussed the above internal control measures with management of the Company and reviewed the “Connected Transactions Management Manual” provided by the Company (the “CT Manual”), and are satisfied that the internal control measures stated above, together with those set out in the CT Manual, are sufficient to ensure the fairness of the terms under the Lease Framework Agreement and to address the major risks associated with the Continuing Connected Transactions.

We understand from management of the Company that the rentals under the lease agreements in respect of the Premises payable to the Group represent the prevailing market rents of similar warehouse spaces, and factory buildings in neighboring areas based on available property rental market comparables and as negotiated and agreed by the parties on an arm’s length basis. In addition, the Company engaged an independent property valuer to review the property lease agreements in respect of the Premises and inspect the relevant properties in order to ensure the terms of the lease agreements are fair and reasonable to the Group and consistent with the prevailing market levels or practice for rental properties of similar status in similar locations as of the date of execution. We have reviewed the register of rentals and service fees received from connected persons by the Group prepared by the finance department of the Company and noted that the transaction amounts were properly recorded and monitored so as to ensure the annual caps would not be exceeded. We have also reviewed samples of invoices regarding the payment of rentals and noted that the payments were made in accordance with the respective lease agreements. Based on the above, we are of the view that the pricing and payment of the historical transactions conducted in respect of the Premises have been determined and conducted in accordance with the relevant pricing principles and internal control procedures of the Company.

With the implementation of the abovementioned internal control measures, we believe that the Continuing Connected Transactions will be conducted on normal commercial terms and on terms that are fair and reasonable and in the interests of the Company and its Shareholders as a whole.

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4. Annual Caps

(a) Historical transaction amounts

The historical figures of the total amount of rentals and service fees received by the Group from members of the SYPI Group in respect of the Premises for the years ended 31 December 2018 and 31 December 2019 and the three months ended 31 March 2020, as well as the annual caps and the utilization rates of the annual caps for the years ended 31 December 2018, 2019 and 2020 are set out below:

Historical transaction amountAnnual caps

(Utilization rates)

For the year ended 31 December

For thethree

months ended

31 March For the year ended/ending 31 December

2018 2019 2020 2018 2019 2020

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Beijing Premises 3,797 3,911 1,228 3,990(95.2%)

4,109(95.2%)

5,174

Chengdu Premises 2,663 5,269 1,419 2,805(94.9%)

5,550(94.9%)

6,076

Xi’an Premises 689 3,410 929 747(92.2%)

3,692(92.4%)

4,044

Hongqiao Premises 3,300 6,211 1,579 3,589(91.9%)

6,734(92.2%)

6,936

Xiechun Road Premises 5,691 5,341 1,118 5,976(95.2%)

6,569(81.3%)

6,766

Shenyang Premises 187 2,052 513 453(41.3%)

2,240(91.6%)

2,452

Cuiwei Donglu Premises 3,168 3,270 628 3,328(95.2%)

3,436(95.2%)

3,539

Suzhou Premises 1,202 2,377 640 1,266(94.9%)

2,504(94.9%)

2,741

Wuhu Premises 2,643 2,812 547 5,556(47.6%)

2,956(95.1%)

3,046

Wuhan Premises 2,133 3,101 847 2,245 Note 1

(95.0%)3,264 Note 1

(95.0%)3,604 Note 2

Total 25,473 37,754 9,448 29,955 41,054 44,378

Notes:

1. The figure represents the sum of the annual caps in respect of the Wuhan Premises approved under the 2017 Property

Lease Transactions and the 2018 Property Lease Transactions.

2. The figure represents the sum of the annual caps in respect of the Wuhan Premises approved under the 2018 Property

Lease Transactions and the 2019 Property Lease Transactions.

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We noted that the historical transaction amounts for the year ended 31 December 2018 of certain premises including the Chengdu Premises, the Xi’an Premises, the Hongqiao Premises, the Shenyang Premises and the Suzhou Premises were substantially lower than those for the year ended 31 December 2019 as the leases of such premises commenced during the second half of 2018 while full year rentals of such premises were recorded for the year ended 31 December 2019.

We also noted that, save for the Shenyang Premises and the Wuhu Premises, the actual transaction amount for each of the Premises for the years ended 31 December 2018 and 2019 accounted for over 80% of the annual cap for the respective year, which we considered a rather high utilization rate of the relevant annual cap. We understand from management of the Company that the relatively low utilization rate of the annual cap for the year ended 31 December 2018 in respect of the Shenyang Premises was due to the delay in delivery of the Shenyang Premises to the tenant. Meanwhile, a temporary reduction in leased area of the Wuhu Premises for maintenance in 2018 also lowered the utilization rate of the annual cap for the Wuhu Premises for the year ended 31 December 2018.

(b) Proposed Annual Caps

The Company proposes that the below Annual Caps be set for the lease transactions contemplated under the Lease Framework Agreement in respect of the years ending 31 December 2020, 2021, 2022 and 2023.

For the year ending 31 December2020 2021 2022 2023

RMB’000 RMB’000 RMB’000 RMB’000

Beijing Premises 4,160 7,752 7,985 3,678Chengdu Premises — 5,771 5,944 3,340Xi’an Premises 3,815 7,114 7,322 3,373Hongqiao Premises — 6,433 6,626 3,723Xiechun Road Premises 5,897 10,988 11,317 5,213Shenyang Premises — 2,239 2,306 1,296Cuiwei Donglu Premises 3,287 6,125 6,309 2,906Suzhou Premises 3,388 6,313 6,502 2,995Wuhu Premises 2,761 5,144 5,299 2,441Wuhan Premises 2,922 5,445 5,609 2,584

Annual Caps 26,230 63,324 65,219 31,549

The Annual Caps represent the aggregate rentals and service fees payable to the Group by the relevant members of the SYPI Group under the respective Lease Agreements for the Premises in each of the years ending 31 December 2020, 2021, 2022 and 2023 respectively.

We have reviewed the terms of the Lease Agreements and the calculation of the Annual Caps and noted that the Annual Caps were properly compiled and prepared in accordance with the terms of the Lease Agreements.

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Given that (i) the Annual Caps represent the exact amount of aggregate rentals and service fees payable to the Group by the relevant members of the SYPI Group under the respective Lease Agreements for the Premises in each of the years ending 31 December 2020, 2021, 2022 and 2023 respectively; (ii) the Annual Caps were properly compiled and prepared in accordance with the terms of the Lease Agreements; and (iii) the historical utilization rates of the annual caps were rather high, we consider that the Annual Caps proposed by the Directors are fair and reasonable and in the interests of the Company and Shareholders as a whole.

RECOMMENDATION

Having considered the abovementioned principal factors and reasons, we consider that the Continuing Connected Transactions are conducted in the ordinary and usual course of business of the Group, and the terms of the Lease Framework Agreement (and the Annual Caps) are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole. We therefore recommend the Independent Board Committee to advise the Independent Shareholders, and we ourselves also recommend the Independent Shareholders, to vote in favour of the resolution to be proposed at the EGM to approve the transactions contemplated under the Lease Framework Agreements and the Annual Caps thereof.

Yours faithfully,For and on behalf of

Crescendo Capital LimitedAmilia Tsang Helen Fan

Managing Director Director

Notes:

(i) Ms. Amilia Tsang is a licensed person under the SFO permitted to engage in Type 6 (advising on corporate finance)

regulated activity and has approximately 15 years of experience in corporate finance.

(ii) Ms. Helen Fan is a licensed person under the SFO permitted to engage in Type 6 (advising on corporate finance)

regulated activity and has approximately 11 years of experience in corporate finance.

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LETTER FROM THE INDEPENDENT PROPERTY VALUER

The following is the text of the letter of opinions received from Colliers, an independent valuer, in connecting with its valuation as at 31 March 2020, in respect of the Continuing Connected Transactions prepared for the purpose of inclusion in this circular.

Beijing Colliers International Real Estate Valuation Co., Ltd.

Suite 510, Tower W3, Oriental Plaza,

No. 1 East Chang’an Ave., Dongcheng District, Beijing, PRC

17 April 2020

The Board of DirectorsChina Logistics Property Holdings Co., Ltd.

No. 1899 Shenkun Road, Minhang DistrictShanghai, PRC

Dear Sir/Madam,

In accordance with instructions received from 上海宇培（集團）有限公司 dated 2 April 2020, we hereby provide our opinions regarding, among others, the agreed rental levels for the below properties as at 31 March 2020, under the commercial terms of 2020 Tenancy Agreements entered into between subsidiaries of China Logistics Property Holdings Co., Ltd. (the “Company”) and connected persons (as defined under the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the “Listing Rules”), for each property. These opinions are provided in respect of our review of 2020 Tenancy Agreements for disclosure purposes.

(a) Pursuant to the Tenancy Agreement entered into between 成都宇航倉儲有限公司 as lessor, a subsidiary of the Company, and 宇培供應鏈管理集團有限公司 as lessee, a connected person of the Company, in relation to the leasing of certain warehouses and other facilities with a gross floor area (GFA) of 10,326.38 square metres (sq.m.) located at No. 9 Minsheng Road, Qingbaijiang District, Chengdu for a term of 30 months commencing from 1 January 2021 and expiring on 30 June 2023 at a monthly starting rent of approximately RMB30.48 per sq.m. (psm) inclusive of the value-added tax and exclusive of the management fees. If the lessee would like to renew the lease upon the expiry date of the original term, the renewed lease shall be for a further term of no longer than 36 months with written notice in advance no less than 6 months before expiry date. Such renewal option (if exercised) shall be effective immediately after the expiration of the previous Tenancy Agreement. The renewal Tenancy Agreement shall be subject to the applicable requirements of the Listing Rules and the previous Tenancy Agreement. The rent during the renewal period shall be decided by the lessor based on the market condition at that time. It is noted that the management fee will be charged at a starting rate of approximately RMB20.32 psm per month. Both rental and the management fee has a 3% annual increase until lease expiry;

(b) Pursuant to the Tenancy Agreement entered into 瀋陽宇培倉儲有限公司 as lessor, a subsidiary of the Company, and 宇培供應鏈管理集團有限公司 as lessee, a connected person of the Company, in relation to the leasing of certain warehouses and other facilities with a GFA of 10,791.03 sq.m. located at the No. 17 Shenxi Jiudong Road, Economic & Technological Development Zone, Shenyang for a term of 30 months commencing from 1 January 2021 and expiring on 30 June 2023 at a monthly starting rent of approximately RMB11.32 psm inclusive

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of the value-added tax and exclusive of the management fees. If the lessee would like to renew the lease upon the expiry date of the original term, the renewed lease shall be for a further term of no longer than 36 months with written notice in advance no less than 6 months before expiry date. Such renewal option (if exercised) shall be effective immediately after the expiration of the previous Tenancy Agreement. The renewal Tenancy Agreement shall be subject to the applicable requirements of the Listing Rules and the previous Tenancy Agreement. The rent during the renewal period shall be decided by the lessor based on the market condition at that time. It is noted that the management fee will be charged at a starting rate of approximately RMB7.54 psm per month. Both rental and the management fee has a 3% annual increase until lease expiry;

(c) Pursuant to the Tenancy Agreement entered into 武漢宇培倉儲有限公司 as lessor, a subsidiary of the Company, and 宇培供應鏈管理集團有限公司 as lessee, a connected person of the Company, in relation to the leasing of certain warehouses and other facilities with a GFA of 13,683.72 sq.m. located north of Jinhe North Road and west of Wujin Road, Hannan District, Wuhan for a term of 36 months commencing from 1 July 2020 and expiring on 30 June 2023 at a monthly starting rent of approximately RMB21.35 psm inclusive of the value-added tax and exclusive of the management fees. If the lessee would like to renew the lease upon the expiry date of the original term, the renewed lease shall be for a further term of no longer than 36 months with written notice in advance no less than 6 months before expiry date. Such renewal option (if exercised) shall be effective immediately after the expiration of the previous Tenancy Agreement. The renewal Tenancy Agreement shall be subject to the applicable requirements of the Listing Rules and the previous Tenancy Agreement. The rent during the renewal period shall be decided by the lessor based on the market condition at that time. It is noted that the management fee will be charged at a starting rate of approximately RMB14.24 psm per month. Both rental and the management fee has a 3% annual increase until lease expiry;

(d) Pursuant to the Tenancy Agreement entered into 蕪湖宇培倉儲有限公司 as lessor, a subsidiary of the Company, and 宇培供應鏈管理集團有限公司 as lessee, a connected person of the Company, in relation to the leasing of certain warehouses and other facilities with a GFA of 13,624.51 sq.m. located at No. 18 Exi Road, Sanshan Economic Development Zone, Wuhu for a term of 36 months commencing from 1 July 2020 and expiring on 30 June 2023 at a monthly starting rent of approximately RMB20.26 psm inclusive of the value-added tax and exclusive of the management fees. If the lessee would like to renew the lease upon the expiry date of the original term, the renewed lease shall be for a further term of no longer than 36 months with written notice in advance no less than 6 months before expiry date. Such renewal option (if exercised) shall be effective immediately after the expiration of the previous Tenancy Agreement. The renewal Tenancy Agreement shall be subject to the applicable requirements of the Listing Rules and the previous Tenancy Agreement. The rent during the renewal period shall be decided by the lessor based on the market condition at that time. It is noted that the management fee will be charged at a starting rate of approximately RMB13.51 psm per month. Both rental and the management fee has a 3% annual increase until lease expiry;

(e) Pursuant to the Tenancy Agreement entered into 陝西西咸新區宇培倉儲有限公司 as lessor, a subsidiary of the Company, and 宇培供應鏈管理集團有限公司 as lessee, a connected person of the Company, in relation to the leasing of certain warehouses and other facilities with a GFA of 15,480.97 sq.m. located west of Xianhu Road, south of Tianyuan Road and north of Xinyuan Road, Shanxi for a term of 36 months commencing from 1 July 2020 and expiring on 30 June 2023 at a monthly starting rent of approximately RMB24.64 psm inclusive of the value-added tax and exclusive of the management fees. If the lessee would like to renew the lease upon the expiry date of the original term, the renewed lease shall be for a further term of no longer than

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36 months with written notice in advance no less than 6 months before expiry date. Such renewal option (if exercised) shall be effective immediately after the expiration of the previous Tenancy Agreement. The renewal Tenancy Agreement shall be subject to the applicable requirements of the Listing Rules and the previous Tenancy Agreement. The rent during the renewal period shall be decided by the lessor based on the market condition at that time. It is noted that the management fee will be charged at a starting rate of approximately RMB16.43 psm per month. Both rental and the management fee has a 3% annual increase until lease expiry;

(f) Pursuant to the Tenancy Agreement entered into between 北京林海灘商貿有限公司 as lessor, a subsidiary of the Company, and 宇培供應鏈管理集團有限公司 as lessee, a connected person of the Company, in relation to the leasing of certain warehouses and other facilities with a GFA of 11,811.39 sq.m. located at Level 1, Warehouse No. 4, Yard 9, Yongle South First Street, Tongzhou District, Beijing for a term of 36 months commencing from 1 July 2020 and expiring on 30 June 2023, at a monthly starting rent of approximately RMB35.22 psm inclusive of the value-added tax and exclusive of the management fees. If the lessee would like to renew the lease upon the expiry date of the original term, the renewed lease shall be for a further term of no longer than 36 months with written notice in advance no less than 6 months before expiry date. Such renewal option (if exercised) shall be effective immediately after the expiration of the previous Tenancy Agreement. The renewal Tenancy Agreement shall be subject to the applicable requirements of the Listing Rules and the previous Tenancy Agreement. The rent during the renewal period shall be decided by the lessor based on the market condition at that time. It is noted that the management fee will be charged at a starting rate of RMB23.48 psm per month. Both rental and the management fee has a 3% annual increase until lease expiry;

(g) Pursuant to the Tenancy Agreement entered into between 蘇州宇培倉儲有限公司 as lessor, a subsidiary of the Company, and 上海宇培速通物流有限公司 as lessee, a connected person of the Company, in relation to the leasing of certain warehouses and other facilities with a GFA of 10,291.32 sq.m. located at No. 28 Hengxinjing Road, Zhoushi Town, Kunshan for a term of 36 months commencing from 1 July 2020 and expiring on 30 June 2023, at a monthly starting rent of approximately RMB31.94 psm inclusive of the value-added tax and exclusive of the management fees. If the lessee would like to renew the lease upon the expiry date of the original term, the renewed lease shall be for a further term of no longer than 36 months with written notice in advance no less than 6 months before expiry date. Such renewal option (if exercised) shall be effective immediately after the expiration of the previous Tenancy Agreement. The renewal Tenancy Agreement shall be subject to the applicable requirements of the Listing Rules and the previous Tenancy Agreement. The rent during the renewal period shall be decided by the lessor based on the market condition at that time. It is noted that the management fee will be charged at a starting rate of approximately RMB21.29 psm per month. Both rental and the management fee has a 3% annual increase until lease expiry;

(h) Pursuant to the Tenancy Agreement entered into between 蘇州宇慶倉儲有限公司 as lessor, a subsidiary of the Company, and 宇培供應鏈管理集團有限公司 as lessee, a connected person of the Company, in relation to the leasing of certain warehouses and other facilities with a GFA of 13,164 sq.m. located at No. 8 Datong Road, Suzhou New District, Suzhou for a term of 36 months commencing from 1 July 2020 and expiring on 30 June 2023, at a monthly starting rent of approximately RMB25.73 psm inclusive of the value-added tax and exclusive of the management fees. If the lessee would like to renew the lease upon the expiry date of the original term, the renewed lease shall be for a further term of no longer than 36 months with written notice in advance no less than 6 months before expiry date. Such renewal option (if exercised) shall be effective immediately after the expiration of the previous Tenancy Agreement. The

— 49 —



renewal Tenancy Agreement shall be subject to the applicable requirements of the Listing Rules and the previous Tenancy Agreement. The rent during the renewal period shall be decided by the lessor based on the market condition at that time. It is noted that the management fee will be charged at a starting rate of approximately RMB17.16 psm per month. Both rental and the management fee has a 3% annual increase until lease expiry;

(i) Pursuant to the Tenancy Agreement entered into between 上海宇培（集團）有限公司 as lessor, a subsidiary of the Company, and 上海宇培實業（集團）有限公司 as lessee, a connected person of the Company, in relation to the leasing of certain warehouses and other facilities with a GFA of 5,492.72 sq.m. located at Block A, No. 1899 Shenkun Road, Minhang District, Shanghai for a term of 30 months commencing from 1 January 2021 and expiring on 30 June 2023, at a monthly starting rent of approximately RMB63.88 psm inclusive of the value-added tax and exclusive of the management fees. If the lessee would like to renew the lease upon the expiry date of the original term, the renewed lease shall be for a further term of no longer than 36 months with written notice in advance no less than 6 months before expiry date. Such renewal option (if exercised) shall be effective immediately after the expiration of the previous Tenancy Agreement. The renewal Tenancy Agreement shall be subject to the applicable requirements of the Listing Rules and the previous Tenancy Agreement. The rent during the renewal period shall be decided by the lessor based on the market condition at that time. It is noted that the management fee will be charged at a starting rate of approximately RMB42.58 psm per month. Both rental and the management fee has a 3% annual increase until lease expiry;

(j) Pursuant to the Tenancy Agreement entered into between 上海宇培（集團）有限公司 as lessor, a subsidiary of the Company, and 宇培供應鏈管理集團有限公司 as lessee, a connected person of the Company, in relation to the leasing of certain warehouses and other facilities with a GFA of 17,464.94 sq.m. located at No. 1000 Xiechun Road, Jiading District, Shanghai for a term of 36 months commencing from 1 July 2020 and expiring on 30 June 2023, at a monthly starting rent of approximately RMB33.76 psm inclusive of the value-added tax and exclusive of the management fees. If the lessee would like to renew the lease upon the expiry date of the original term, the renewed lease shall be for a further term of no longer than 36 months with written notice in advance no less than 6 months before expiry date. Such renewal option (if exercised) shall be effective immediately after the expiration of the previous Tenancy Agreement. The renewal Tenancy Agreement shall be subject to the applicable requirements of the Listing Rules and the previous Tenancy Agreement. The rent during the renewal period shall be decided by the lessor based on the market condition at that time. It is noted that the management fee will be charged at a starting rate of approximately RMB22.51 psm per month. Both rental and the management fee has a 3% annual increase until lease expiry;

We have inspected each of the subject properties, which were all found to be in a state fit for purpose at the date of inspection. We did not carry out any structural survey, environmental assessment, nor test services and facilities, and so have assumed that these aspects are in good order without effect on the tenancy agreements or properties concerned, for the purpose of providing these opinions. We have further assumed that each of the properties will be in the same state, and fit for purpose, when each of the subject tenancies take effect.

We have further assumed that all statutory and other requirements for the use of the subject properties are and will be in order, including government approvals, and licences.

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We have examined and seen copies of all the Tenancy Agreements, which we have taken to be in good order and correct for the purpose of these opinions. We have made such additional investigations as we felt necessary such as the gathering of comparable market rents, and have had regard to the market outlook for rents of the types of properties involved, and their locations.

We are of the opinion that the commercial terms, including the rentals, and where applicable the management fees, the 3% rental or management fee increment after each 12-month rental cycle, and the sum of monthly rental and management fee halved in two consecutive months during each rental cycle, which in effect provides an annual one-month rent-free period, as contained in the leases for Chengdu, Shenyang, Kunshan, Wuhan, Wuhu, Xi’an, Beijing, Suzhou and Shanghai of the relevant Tenancy Agreements as mentioned above are fair and reasonable and in line with current and expected market rental levels for similar premises in similar locations.

In determining market rents, we have examined comparable rentals of similar properties in the nearby vicinity, and assessed market rentals on the basis of market rent — defined as the estimated amount for which an interest in real property should be leased on the valuation date between a willing lessor and willing lessee on appropriate lease terms in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion. We have also had regard to the market outlook for rents of the types of properties involved, and their locations.

We are of the opinion that the Tenancy Agreements as mentioned above were entered into in the ordinary and usual course of business of the Company and in the interest of the Shareholders as a whole.

For our assessments, we have been provided by the Company with full information of the subject tenancies for our analysis and advice in relation to the reasonableness of the commercial terms Together with our own independent investigations on market rentals and market outlook we believe the information provided is satisfactory for the purpose of providing these opinions.

Please note this document is furnished for the specific purposes of the Company only, and for no other use, without the express permission of Beijing Colliers International Real Estate Valuation Co., Ltd. The opinions are subject our standard caveats and assumptions attached hereto. These are opinions on the reasonableness of rental levels, and the terms of tenancies only, and do not constitute formal valuations, neither can be construed as such.

Yours faithfully,For and on behalf ofBeijing Colliers International Real Estate Valuation Co., Ltd.

Zhirong He (Flora He)FRICS MCOMFINExecutive DirectorValuation and Advisory Services | China

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APPENDIX GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Interests and Short Positions of the Directors and the Chief Executive in the Shares, Underlying Shares and Debentures of the Company

As at the Latest Practicable Date, the interests and short positions of the Directors or the chief executive of the Company in the shares, underlying shares or debentures of the Company (within the meaning of Part XV of the SFO) as recorded in the register required to be kept by the Company under section 352 of the SFO or as otherwise be notified to the Company and the Stock Exchange pursuant to the Model Code were as follows:

Name of Director/Chief Executive

Capacity/Nature of interest

Number of Shares/underlying Shares

interested(1)

Approximate percentage of

shareholding(2)

Li Shifa(3) Interest of controlled corporation

916,488,000 28.34%

Wu Guolin(4) Beneficial owner 1,872,000 0.06%Li Qing(5) Beneficial owner 1,872,000 0.06%Shi Lianghua(6) Beneficial owner 1,648,000 0.05%Li Huifang(7) Beneficial owner 504,000 0.02%Xie Xiangdong(8) Beneficial owner 544,000 0.02%

Notes:

(1) All interests stated are long positions.

(2) As at the Latest Practicable Date, the Company had 3,234,431,999 issued Shares.

(3) Mr. Li holds the entire issued share capital of Lee International Investment Management Co., Ltd, which

in turn holds 90% interest in Yupei International. Accordingly, Mr. Li is deemed to be interested in the

916,488,000 Shares held by Yupei International.

(4) Mr. Wu Guolin is interested in 1,872,000 options granted to him under the pre-IPO share option scheme of

the Company, representing 1,872,000 underlying Shares.

(5) Ms. Li Qing is interested in 1,872,000 options granted to her under the pre-IPO share option scheme of the

Company, representing 1,872,000 underlying Shares.

(6) Ms. Shi Lianghua is interested in 1,648,000 options granted to her under the pre-IPO share option scheme

of the Company, representing 1,648,000 underlying Shares.

— I-2 —



(7) Ms. Li Huifang is interested in 504,000 options granted to her under the pre-IPO share option scheme of the

Company, representing 504,000 underlying Shares.

(8) Mr. Xie Xiangdong is interested in 544,000 options granted to him under the Pre-IPO Option Scheme,

representing 544,000 underlying shares of the Company.

(b) Interests in Associated Corporations of the Company

Name of Director/Chief Executive

Name of associated corporation

Capacity/Nature of interest

Number of Shares

interested(1)

Approximate percentage of shareholding

Li Shifa(2) Lee International Investment Management Co., Ltd

Beneficial owner

50,000 100%

Yupei International Interest of controlled corporation and interest of spouse

50,000 100%

(1) All interests stated are long positions.

(2) Mr. Li holds the entire issued share capital of Lee International Investment Management Co., Ltd, which in

turn holds 45,000 shares in Yupei International. The remaining 5,000 shares in Yupei International are held

by Ms. Ma Xiaocui, the wife of Mr. Li. Accordingly, Mr. Li is deemed to be interested in the 50,000 shares

in Yupei International.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor the chief executive of the Company had any interests or short positions in any of the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept by the Company pursuant to section 352 of the SFO or as notified to the Company and the Stock Exchange pursuant to the Model Code.

(c) Directors’ Positions in Other Companies

As at the Latest Practicable Date, as far as the Company is aware, the following Directors are employed by the following companies which have interests or short positions in the Shares or underlying Shares of the Company which are required to be notified to the Company and the Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO:

Name of Director Position Held in the Specific Company

Li Shifa The sole director of Yupei International and the sole director of Lee International Investment Management Co., Ltd

Chen Runfu The senior vice president of Sino-Ocean Group Holding Limited

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(d) Substantial Shareholders’ and Other Persons’ Interests and Short Positions in Shares and Underlying Shares

As at the Latest Practicable Date, the following persons (other than the Directors or the chief executive of the Company) have interests or short positions in the Shares or underlying Shares as recorded in the register required to be kept by the Company under section 336 of the SFO:

Name of ShareholderCapacity/Nature of interest

Number of Shares

interested(1)

Approximate percentage of

shareholding(2)

Lee International Investment Management Co., Ltd(3)

Interest of controlled corporation

916,488,000 28.34% (L)

Yupei International(3) Beneficial owner 916,488,000 28.34% (L)Ma Xiaocui(4) Interest of spouse 916,488,000 28.34% (L)RRJ Capital Master Fund II, L.P.(5)


937,772,498208,749,000

28.99% (L)6.45% (S)

ESR Cayman Limited(6) Beneficial owner; Interest of controlled corporation

443,148,000 13.70% (L)

Warburg Pincus & Co.(6) Interest of controlled corporation

443,148,000 13.70% (L)

WP X Investment VI Ltd.(6) Interest of controlled corporation

443,148,000 13.70% (L)

ESR HK Management Limited(6)

Beneficial owner 390,151,000 12.06% (L)

JD.com, Inc.(7) Interest of controlled corporation

321,068,999 9.93% (L)

Jingdong Logistics Group Corporation(7)

Beneficial owner 321,068,999 9.93% (L)

Max Smart Limited(7) Interest of controlled corporation

321,068,999 9.93% (L)

劉強東(7) Beneficial of a trust (other than a discretionary interest)

321,068,999 9.93% (L)

Sino-Ocean Group Holding Limited(8)


287,741,000 8.90% (L)

Notes:

(1) The letter “S” denotes the person’s short position in such Shares. The letter “L” denotes the person’s long

position in such Shares.

(2) As at the Latest Practicable Date, the Company had 3,234,431,999 issued Shares.

(3) Mr. Li holds the entire issued share capital of Lee International Investment Management Co., Ltd, which in

turn holds 90% interest in Yupei International. Such interests are also disclosed as the interests of Mr. Li

in the section headed “Interests and Short Positions of the Directors and the Chief Executive in the Shares,

Underlying Shares and Debentures of the Company” above.

— I-4 —



(4) Ms. Ma Xiaocui is the wife of Mr. Li and is deemed to be interested in the Shares which are interested by

Mr. Li under the SFO.

(5) RRJ Capital Master Fund II, L.P. holds the entire issued share capital of Berkeley Asset Holding Ltd, which

holds 740,173,000 Shares and 184,639,498 Shares underlying the Company’s convertible bonds listed on

the Stock Exchange in long position and 208,749,000 Shares underlying the Company’s unlisted physically

settled derivatives in short position. RRJ Capital Master Fund II, L.P. also holds the entire issued share

capital of Travis Asset Holding Ltd, which in turn holds the entire issued share capital of Sherlock Asset

Holding Ltd, which holds 12,960,000 Shares in long position. Accordingly, RRJ Capital Master Fund

II, L.P. is deemed to be interested in the 740,173,000 Shares and 184,639,498 underlying Shares in long

position and 208,749,000 underlying Shares in short position held by Berkeley Asset Holding Ltd, and

each of RRJ Capital Master Fund II, L.P. and Travis Asset Holding Ltd is deemed to be interested in the

12,960,000 Shares in long position held by Sherlock Asset Holding Ltd.

(6) ESR Cayman Limited holds the entire issued share capital of ESR HK Management Limited, which holds

390,151,000 Shares. ESR Cayman Limited holds 52,997,000 Shares. As a result, ESR Cayman Limited is a

benefcial owner as to 52,997,000 Shares and is deemed to be interested in 390,151,000 Shares held by ESR

HK Management Limited. ESR Cayman Limited is indirectly owned as to 38.35% by WP X Investment

VI Ltd, which is in turn indirectly owned as to 96.90% by Warburg Pincus & Co. Accordingly, each of

Warburg Pincus & Co. and WP X Investment VI Ltd is deemed to be interested in 443,148,000 Shares.

(7) 劉強東 (Mr. Richard Qiangdong Liu) controls 100% of Max Smart Limited, which in turn controls 72.63%

of issued share capital of JD.com, Inc.. JD.com, Inc. holds the entire issued share capital of Jingdong Logistics Group Corporation. Accordingly, each of 劉強東, Max Smart Limited and JD.com, Inc. is

deemed to be interested in the 321,068,999 Shares held by Jingdong Logistics Group Corporation.

(8) Sino-Ocean Group Holding Limited is deemed to be interested in the 287,741,000 Shares through a series

of controlled corporations, including, among others, Shine Wind Development Limited, Faith Ocean

International Limited, Sino-Ocean Land (Hong Kong) Limited and Joy Orient Investments Limited.

Save as disclosed above, as at the Latest Practicable Date, our Directors or chief executive are not aware of any other person, not being a Director or chief executive of the Company, who has an interest or short position in the Shares or the underlying Shares as recorded in the register required to be kept by the Company under section 336 of the SFO.

3. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors or their respective close associates had engaged in or had any interest in any business which competes or may compete, either directly or indirectly, with the businesses of the Group except for Mr. Li, who is a director and the ultimate controlling shareholder of Shanghai Yupei Industry (Group) Company Limited (上海宇培實業(集團)有限公司). Shanghai Yupei Industry (Group) Company Limited operates Yupei Shanghai Northwest Logistics Park and Yupei Shanghai Jiading Logistics Park. Further details of these two logistics parks are set out in the Prospectus.

4. DIRECTORS’ INTERESTS IN THE GROUP’S ASSETS OR CONTRACTS OR ARRANGEMENTS SIGNIFICANT TO THE GROUP

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had since 31 December 2019, being the date to which the latest published audited accounts of the Group were made up, been acquired or disposed of by or leased to any member of the Group or is proposed to be acquired or disposed of by or leased to any member of the Group.

— I-5 —



As at the Latest Practicable Date, save for each of the 2018 Property Lease Transactions, the 2019 Property Lease Transactions and the Continuing Connected Transactions in which Mr. Li is interested, none of the Directors was materially interested, either directly or indirectly, in any contract or arrangement entered into by any member of the Group which was subsisting at the Latest Practicable Date and was significant to the business of the Group.

5. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had entered into a service contract which is not determinable by the Company within one year without payment of compensation (other than statutory compensation).

6. QUALIFICATION AND CONSENT OF EXPERTS

Crescendo Capital has given and has not withdrawn its consent to the issue of this circular with the inclusion herein of its letter of advice dated 28 May 2020 and references to its name included in the form and context in which it appears.

Colliers has given and has not withdrawn its consent to the issue of this circular with the references to its name and letters included in the form and context in which it appears.

The following is the qualification of the experts who have given an opinion or advice, which is contained in this circular:

Name Qualification

Crescendo Capital Limited a licensed corporation to carry out Type 6 (advising on corporate finance) regulated activities under the SFO

Beijing Colliers International Real Estate Valuation Co., Ltd.

Independent professional property valuer

As at the Latest Practicable Date, Crescendo Capital and Colliers did not have any shareholding, directly or indirectly, in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

As at the Latest Practicable Date, Crescendo Capital and Colliers were not interested, directly or indirectly, in any assets which had since 31 December 2019, being the date to which the latest published audited accounts of the Group were made up, been acquired or disposed of by or leased to, or proposed to be acquired or disposed of by or leased to, any member of the Group.

7. MATERIAL ADVERSE CHANGE

Save as publicly disclosed by the Company on the HKEXnews website on or before the date of this circular, as at the Latest Practicable Date, the Directors confirmed that they were not aware of any material adverse change in the financial or trading positions of the Group since 31 December 2019, being the date to which the latest published audited accounts of the Group were made up.

— I-6 —



8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours at the office of Simpson Thacher & Bartlett at 35th Floor, ICBC Tower, 3 Garden Road, Central, Hong Kong from the date of this circular up to and including 24 June 2020 and at the EGM.

(a) the Lease Framework Agreement;

(b) each of the Termination Agreements;

(b) each of the Lease Agreements;

(c) the letter from the Independent Board Committee dated 28 May 2020, the text of which is set out on pages 28 to 29 of this circular;

(d) the consent letter from Crescendo Capital referred to in the paragraph headed “6. Qualification and Consent of Experts” in this Appendix;

(e) the letter from Crescendo Capital dated 28 May 2020, the text of which is set out on pages 30 to 45 of this circular;

(f) the consent letter from Colliers referred to in the paragraph headed “6. Qualification and Consent of Experts” in this Appendix;

(g) the fair rent letter issued by Colliers referred to in the paragraph headed “6. Qualification and Consent of Experts” in this Appendix;

(h) the articles of association of the Company; and

(i) this circular.

9. GENERAL

(a) The registered office of the Company is at 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands.

(b) The headquarters and principal place of business of the Company in the PRC is No. 1899 Shenkun Road, Minhang District, Shanghai, PRC (201106).

(c) The principal place of business of the Company in Hong Kong is situated at Unit 3213, Cosco Tower, 183 Queen’s Road Central, Sheung Wan, Hong Kong.

(d) The company secretary of the Company is Ms. So Ka Man. Ms. So Ka Man is a chartered secretary and a fellow of both The Hong Kong Institute of Chartered Secretaries (“HKICS”) and The Chartered Governance Institute in the United Kingdom. She is a holder of the Practitioner’s Endorsement from HKICS.

(e) The Company’s share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, is situated at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

(f) The English text of this circular shall prevail over the Chinese text in the event of inconsistency.

— EGM-1 —





(Stock Code: 1589)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of China Logistics Property Holdings Co., Ltd (the “Company”) will be held at Meeting Room, 8/F, Block A, No. 1899 Shenkun Road, Minhang District, Shanghai, China on Monday, 29 June 2020 at 2:20 p.m. (or immediately after the conclusion or adjournment of the Company’s Annual General Meeting to be held at the same venue at 2:00 p.m. on the same day), for the purpose of considering and if thought fit, passing the following resolution as an ordinary resolution of the Company:

“THAT the continuing connected transactions contemplated under the lease framework agreement entered into between the Company and Shanghai Yupei Investment Holdings Co., Ltd. (上海宇培投資控股有限公司) on 29 April 2020 and the proposed annual caps be and are hereby generally and unconditionally approved and the directors of the Company acting together or by committee, or any director of the Company acting individually, be and is hereby authorised to do all such further acts and things and execute such further documents and take all such steps which in his/her/their opinion may be necessary, desirable or expedient to implement and/or give effect to the terms of such continuing connected transactions.”

On behalf of the BoardChina Logistics Property Holdings Co., Ltd

Li ShifaChairman

Hong Kong, 28 May 2020

Notes:

(a) Details of the above proposal and resolution to be considered at the EGM are set out in the circular of the Company

dated 28 May 2020 (the “Circular”). Unless otherwise defined in this notice, capitalized terms used in this notice shall

have the same meanings as those defined in the Circular.

(b) Any Shareholder of the Company entitled to attend and vote at the above meeting is entitled to appoint a proxy to attend

and vote instead of him/her/it. A proxy need not be a member of the Company. A member who is the holder of two or

more shares of the Company may appoint more than one proxy to represent him/her/it to attend and vote on his/her/its

behalf. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of

which each such proxy is so appointed.

(c) In order to be valid, a form of proxy together with the power of attorney or other authority, if any, under which it

is signed or a certified copy of that power or authority, must be deposited at the Company’s share registrar in Hong

Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East,

Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the

holding of the meeting (i.e. not later than 2:20 p.m. on Saturday, 27 June 2020) or any adjournment thereof. Delivery of

the form of proxy shall not preclude a member of the Company from attending and voting in person at the meeting or

any adjournment thereof and, in such event, the form of proxy shall be deemed to be revoked.

— EGM-2 —



(d) A form of proxy must be signed by you or your attorney duly authorized in writing or, in the case of a corporation, must

be either executed under its common seal or under the hand of an officer or attorney or other person duly authorized.

(e) In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to

the exclusion of votes of the other joint holder(s) and for this purpose seniority will be determined by the order in which

the names stand in the register of members of the Company in respect of the joint holding.

(f) The resolution will be put to vote by way of poll at the meeting. Every member of the Company present in person (in the

case of a member being a corporation, by its duly authorized representative) or by proxy shall have one vote for every

fully paid share of which he/she/it is the holder.

(g) For determining the entitlement to attend and vote at the EGM to be held on 29 June 2020, the register of members of

the Company will be closed from Tuesday, 23 June 2020 to Monday, 29 June 2020 (both days inclusive), during which

period no transfer of shares of the Company will be registered. In order to be eligible to attend and vote at the EGM,

unregistered holders of shares of the Company should ensure that all share transfer documents accompanied by the

relevant share certificates must be lodged with the Company’s share registrar in Hong Kong, Computershare Hong Kong

Investor Services Limited, at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong

Kong for registration not later than 4:30 p.m. on Monday, 22 June 2020.

(h) References to time and dates in this notice are to Hong Kong time and dates.

Documents

China Logistics Property Holdings Co., Ltd€¦ · Letter from the Independent Financial Adviser..... 30 Letter from the Independent Property Valuer..... 46 Appendix — General