Kerry Properties Limited — M&A Activity 2005

Jan 5, 2005

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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website: www.kerryprops.com (Stock Code: 00683)

MAJOR TRANSACTION FIRST CLOSING

The Board is pleased to announce that First Closing took place on 31 December 2004. All First Closing Conditions had been satisfied except: (i) the condition in relation to the execution of documents to confirm the beneficial ownership of companies or entities comprised in the Target Group which was waived by the Company on the condition that it be satisfied as soon as reasonably practicable before or after the Second Closing; and (ii) the condition in relation to the appointment by Huatong of a director of Eas PRC nominated by Eas HK as the legal representative of Eas PRC which was waived by the Company as it is no longer relevant on account of the approval from Ministry of Commerce of the PRC regarding the articles of association and joint venture contract of Eas PRC both dated 8 November 2004.

Second Closing is currently expected to take place as soon as possible and a further announcement will be made.

Reference is made to the Company’s announcement dated 24 September 2004 relating to the proposed acquisition by Kerry Logistics from Huatong of Treasure Lake Shares and Eas PRC Shares in accordance with the terms and conditions of the Sale and Purchase Agreement (the “ First Announcement ”), the Company’s announcements dated 18 October 2004 and 15 December 2004 both relating to a time extension for despatch of the circular (the “ Circular ”) and the Company’s announcement dated 28 December 2004 relating to shareholders’ approval, differences detected during due diligence and audit and despatch of the Circular. Unless the context otherwise requires, terms defined in the First Announcement shall have the same meanings when used in this announcement.

The Board is pleased to announce that First Closing took place on 31 December 2004. All First Closing Conditions had been satisfied except (i) the condition that relates to the execution of documents to confirm the beneficial ownership of companies or entities comprised in the Target Group; and (ii) the condition that relates to the appointment by Huatong of a director of Eas PRC nominated by Eas HK as the legal representative of Eas PRC.

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In relation to (i) above, Huatong has yet to provide the Company with further appropriate documents to confirm the beneficial ownership of Eas PRC in four companies or entities comprised in the Target Group. The aggregate asset value of the equity interests of Eas PRC in these four companies or entities represents less than 5% of the total asset value of the Eas PRC Group as at 30 June 2004 based on the accountants’ report on the Eas PRC Group set out in Appendix III to the circular of the Company dated 29 December 2004. That condition was waived by the Company on the condition that it be satisfied as soon as reasonably practicable before or after the Second Closing. In relation to (ii) above, the condition was waived by the Company as it is no longer relevant on account of the approval from Ministry of Commerce of the PRC regarding the articles of association and joint venture contract of Eas PRC both dated 8 November 2004 pursuant to which the right to appoint the legal representative of Eas PRC lies with Eas HK instead of Huatong.

Second Closing is currently expected to take place shortly after the First Closing. The Company will issue an announcement as soon as practicable after Second Closing has taken place.

GENERAL

As at the date of this announcement, Messrs. Ang Keng Lam, Wong Siu Kong, Ho Shut Kan and Ma Wing Kai, William are executive Directors and Messrs. William Winship Flanz, Lau Ling Fai, Herald and Christopher Roger Moss, O.B.E. are independent non-executive Directors.

By Order of the Board Ang Keng Lam Chairman

Hong Kong, 4 January 2005

* For identification purpose only

“Please also refer to the published version of this announcement in the South China Morning Post”

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