THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. KEY INVESTMENT HIGHLIGHTS OF SF REIT

SF REIT is the first logistics-focused REIT to be [REDACTED] in . Its key investment objectives are to provide Unitholders with stable distributions, sustainable and long-term distribution growth, and enhancement in the value of SF REIT’s properties.

The investment focus of SF REIT shall be income-generating real estate globally, with an initial focus on logistics properties. The three Properties in SF REIT’s initial portfolio offer investors direct exposure to modern logistics properties in Hong Kong and the PRC.

Backed by SFH, the largest express delivery company in , and managed by a highly experienced management team at the REIT Manager, SF REIT presents Unitholders with an attractive investment proposition for the following reasons.

PRIME PROPERTY PORTFOLIO LOCATED AT STRATEGIC LOCATIONS IN HONG KONG AND THE PRC

According to the Market Consultant Report, there is a growing shortage of modern logistics properties in Hong Kong and the PRC. The shortage is primarily attributable to the combination effect of the scarcity of suitable sites in the Greater Bay Area and other prime cities in the PRC, as well as increasing demand from tenants in the logistics, express delivery, e-commerce and cold storage sectors due to their rapid growth as a result of shifting consumer demands globally.

SF REIT’s initial portfolio at [REDACTED] comprises three modern logistics properties with distribution centres equipped with automatic sorting and supply chain support facilities. Modern logistics properties can be distinguished from other logistics properties due to their relatively low age and relatively high degree of modernisation, allowing them to be used by tenants for multiple purposes and more efficiently. The Hong Kong Property is certified by the U.S. Green Building Council as meeting the Leadership in Energy and Environmental Design (LEED) Gold Certification standards. According to the Market Consultant Report, as at 30 September 2020, the Property was the sixth largest (by Gross Floor Area) modern logistics property in the of Foshan and the 16th largest in Foshan, while the Wuhu Property was the fourth largest modern logistics property in Wuhu.

As the Properties are relatively new, with a weighted average age by Gross Lettable Area of approximately three years and a weighted average remaining land tenure by Gross Lettable Area of 38 years as at 30 September 2020, they have been developed with modern technologies and automated guided vehicles in mind which are attractive to tenants and allow the Properties to command a rental premium compared to non-modern logistics properties. Given their age and specifications, the REIT Manager does not expect substantial capital expenditure for maintenance, refurbishment or upgrade of the Properties in near term.

The Properties are situated at strategic locations close to major airports and seaports, and accessible by major roads and expressways, in their respective cities.

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Hong Kong Property

Completed in 2014, the Hong Kong Property, comprising a distribution centre equipped with automatic sorting and supply chain support facilities, is a 15-storey ramp-up modern logistics property, which is characterised as a modern logistics property that provides vehicular ramp access to each warehouse floor. The Hong Kong Property has an aggregate Gross Lettable Area of 1,725,692.5 sq.ft. (equivalent to 160,322.2 sq.m.) and is the largest of the Properties by size and Appraised Value, comprising approximately 52.1% of the total Gross Lettable Area and 86.6% of the total Appraised Value of the Properties as at 31 December 2020. Located in Tsing Yi adjacent to Kwai Tsing Container Terminal No. 9 that connects to other business ports in the world, the Hong Kong Property is in close proximity to Hong Kong International Airport, and accessible by major roads and transportation infrastructure such as the Hong Kong-Zhuhai- Macao Bridge and -Shenzhen-Hong Kong Express Rail Link.

Hong Kong, being a key node city under the “Belt and Road Initiative” and a core city in the Greater Bay Area, is recognised as an international logistics and trade hub. Benefiting from Hong Kong’s free trade policies, low tax rates and proximity to the PRC, the logistics sector has grown and expanded rapidly over the last decade, giving rise to an increasing demand for more and higher quality warehouse space in Hong Kong. Modern logistics properties with built-in smart facilities and systems are preferred by logistics operators over traditional warehouses.

There is a limited supply of modern logistics properties in Hong Kong. According to the Market Consultant Report, approximately 76.0% of the modern logistics properties in Hong Kong are more than 20 years of age and only approximately 18.8% are less than ten years of age as at the end of 2020, with the average vacancy rate of the latter being as low as 2.4% in the second quarter of 2020. Further, no additional modern logistics pipeline projects in Hong Kong are expected to complete before 2022. It is also difficult to convert non-modern logistics properties to modern logistics properties since conversion would involve significant physical transformation, such as loading capacity and net ceiling height, which is costly and time-consuming. Conversion may not be feasible, for example, where a traditional warehouse is located in a place with low power distribution that fails to meet the high energy consumption requirements of modern warehouses. Due to the limited supply of modern logistics properties in Hong Kong, they commanded a 17.7% premium in rent over non-modern logistics properties in 2019.

These market conditions, together with the Hong Kong Property’s prime location, modern facilities and optimised leasing strategies, give the Hong Kong Property a competitive edge that is conducive for future growth.

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Foshan Property

Completed in February 2021, the Foshan Property is a modern logistics property which has an aggregate Gross Lettable Area of 84,890.8 sq.m. and is equipped with intelligent technology and built-to-suit facilities, such as automatic sorting and supply chain support facilities. It is strategically located close to Foshan Shadi Airport, Foshan West Railway Station, Guangzhou Railway Station and Guangzhou Baiyun Airport.

Foshan is a core city located at the in the south-central part of Province. It is one of the 11 cities in the Greater Bay Area, with established transport links to other parts of the Greater Bay Area. Foshan serves as the main interchange station for a number of railway routes, including the Guangzhou-Zhuhai intercity railway which links Foshan with Guangzhou, Zhongshan, Zhuhai, Hong Kong and Macao.

Due to the synergetic development of cities in the Greater Bay Area and the position of Foshan as the manufacturing centre of west Greater Bay Area, there is a robust demand for logistics properties and other logistics facilities in Foshan. According to the Market Consultant Report, the demand for modern logistics properties in Foshan has risen with an average year-on-year rental growth rate of 38.8% from 2016 to 2020, with the average annual vacancy rate of such properties being 10.3% as at 30 June 2020.

With emerging demand for modern logistics properties in Foshan, the average rent for these properties increased from RMB0.89 per sq.m. per day in 2015 to approximately RMB1.15 per sq.m. per day during the second quarter of 2020. The Market Consultant estimates that by 2025, the vacancy rate will fall further to 7.1%, while rent will continue to rise to approximately RMB1.39 per sq.m. per day.

Wuhu Property

Completed in 2018, the Wuhu Property is a modern logistics property with an aggregate Gross Lettable Area of 62,777.8 sq.m. and comprises of two high standard warehouses, a distribution centre equipped with automatic sorting and supply chain support facilities, a research and development building and two ancillary buildings. The Wuhu Property is located within the Jiujiang Economic Development Area, a national level development zone and a cluster for logistics and industrial enterprises in Wuhu. It enjoys close proximity to Wuhu East High Speed Railway Station, Wuhu International Cargo Port and Ningwu Highway.

Following the opening of the Shangqiu-Hefei-Hangzhou High Speed Railway in June 2020, Wuhu is approximately 4 hours commute from and 1.5 hours commute from Hangzhou. Wuhu is also located near the Wuhu Port along the southern end of the Yangtze River, which is one of the 28 major river ports in the PRC. With advanced highway, railway and shipping networks boosting inter-city connectivity, Wuhu’s positioning as a key transportation hub in the Yangtze River Delta Economic Region and a national transportation hub in the PRC drives its logistics industry and logistics property market.

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Leveraging on its competitive capabilities in automobile, mechanical, materials, electronics and cables industries, Wuhu is able to connect with comprehensive industrial chains nationwide. E-commerce and third-party logistics sectors have also established and expanded their presence in Wuhu, further driving demand for logistics and warehousing facilities.

CAPITALISING ON THE GROWTH OF THE HONG KONG AND PRC LOGISTICS AND E-COMMERCE MARKETS

The REIT Manager believes that the Properties are well-positioned to capture increasing demand for modern logistics properties arising from the growth of the logistics and e-commerce markets, as well as favourable government policies in Hong Kong and the PRC.

Growth of the Hong Kong and PRC logistics and e-commerce markets which drive the demand for logistics facilities

With its strategic location in Asia, Hong Kong is able to capture both growing domestic inbound and international outbound trade demands. According to the Market Consultant Report, in 2019, Hong Kong has the busiest airport for cargo since 2006, the eighth busiest container port and the fourth largest shipping register in the world. According to the Logistics Performance Index Report published by the World Bank, Hong Kong’s logistics industry has been ranked in the world’s top 10 during 2012 to 2018. Meanwhile in the PRC, numerous national strategies, such as the 13th Five-year development plan for express delivery industry (快遞業發展“十三五”規劃) promulgated by the PRC Government in 2017, seek to advance the logistics industry in the PRC. The express delivery market in the PRC grew at a CAGR of approximately 28.3% during 2015 to 2019 and the Market Consultant estimates that the total revenue of the express delivery will continue to increase steadily at a CAGR of 15.0% from 2019 to 2025.

The growth of the e-commerce market in Hong Kong and the PRC is a major driver for the logistics properties market as e-commerce activities require comprehensive logistics and warehousing support for merchandise storage and distribution. Underpinned by increasing internet usage and household spending power in Hong Kong and the PRC, the e-commerce market has expanded rapidly in these markets over the last decade. According to the Market Consultant Report, the size of Hong Kong’s e-commerce market increased with a CAGR of 34.8% from 2015 to 2019 and is expected to continue increasing at a CAGR of 15.1% from 2019 to 2025, while the CAGR for e-commerce market in the PRC was 28.5% during 2015 to 2019 and is expected to be 12.8% during 2019 to 2025. The outbreak of the COVID-19 pandemic has also accelerated structural changes in consumers’ spending habits and retailers’ supply chain management, causing retailers and suppliers to modernise and improve their logistics facilities and capabilities in response to these changes.

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Favourable government policies which encourage the growth of the modern logistics property market

To support future trade flow, the Hong Kong government has issued many initiatives, master plans and policies to support the construction of transportation infrastructure. The major existing and upcoming infrastructure projects, such as: (i) the third runway of Hong Kong International Airport; (ii) the Liantang, Heung Yuen Wai Boundary Control Point; (iii) the Hong Kong-Zhuhai-Macao-Bridge; and (iv) the Shenzhen Bay Bridge, enhance the connectivity between Hong Kong and the PRC and promote the growth of the trading and logistics sectors as well as the modern logistics property market in Hong Kong.

The PRC government has introduced a series of favourable policies and reforms to support the development of the logistics sector in the PRC, which consequentially benefits the modern logistics property market. These policies generally pertain to logistics infrastructure and taxation benefits. For example the: (i) “Layout and Construction Plan of National Logistics Hubs (《國家物流樞紐佈局和建設規劃》)” issued by the NDRC and the Ministry of Transport in 2018, emphasises the importance of national logistics hubs and government support on logistics land use; and (ii) “Implementation Opinions on Supporting Private Enterprises in Accelerating Reform, Development, Transportation and Upgrading (《關於支持民營企業加快 改革發展與轉型升級的實施意見》)”, reduces the logistics costs and establishes logistics infrastructure land guarantee mechanism.

HIGH-QUALITY AND STABLE TENANT BASE

As the Properties were initially developed to support SFH’s logistics network and to facilitate its global operations, most of the Gross Lettable Area of the Properties have been leased to and operated by subsidiaries of the SFH Group, which collectively contributed approximately 62.4%, 72.1% and 76.6% of the total revenue for each of the two years ended 31 December 2018 and 2019 and the nine months ended 30 September 2020, respectively. Save for the Foshan Property which is currently leased entirely to a local operating subsidiary of SFH, the Properties are also tenanted by other third party supply chain and logistics companies. During the Track Record Period, there were no major rental delinquencies or dispute in respect of the Properties.

While the SF Connected Tenants contribute a relatively high percentage of the total rental income generated by the Properties, the REIT Manager considers this arrangement to be beneficial to SF REIT as it provides a high degree of income stability for SF REIT. Given certain facilities were specifically built to suit their operational needs and large capital expenditures were spent, for example, on building heavy machinery and equipment to their specifications, the REIT Manager does not expect the SF Connected Tenants to vacate the Properties for other modern logistics properties in the short to medium term. In addition, all subsisting SF Leases are for a term of five years and do not allow the SF Connected Tenants to early terminate save for limited circumstances such as the occurrence of force majeure events. The SF Lease Guarantees provided by SF Holding and Shenzhen SF Taisen in respect of all the SF Connected Tenants’ obligations under the SF Leases provide additional certainty

–116– THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. KEY INVESTMENT HIGHLIGHTS OF SF REIT of income stream of the Properties and stability of distributions to Unitholders. For further details of the SF Lease Guarantees, please refer to the section headed “[Connected Party Transactions – Continuing Connected Party Transactions – Fully Exempt Continuing Connected Party Transactions with SF Connected Persons – SF Lease Guarantees]” in this Document.

REPUTABLE AND COMMITTED SPONSOR WITH EXTENSIVE NETWORK AND EXPERIENCE IN LOGISTICS SECTOR

SF REIT is sponsored by SFH, a company listed on the Shenzhen Stock Exchange and one of the PRC’s leading express and logistics service providers of comprehensive end-to-end integrated logistics and supply chain management solutions. SFH wholly owns the REIT Manager and is expected to indirectly hold approximately [REDACTED]% of SF REIT (assuming the [REDACTED] is not exercised) at the time of [REDACTED]. As such, SF REIT stands to benefit from SFH’s market reach and mature logistics network both in Hong Kong and the PRC.

SFH is a leading integrated logistics services provider in China. Founded in 1993, SFH is one of the earliest express delivery companies in China and has grown into a leading logistics player with the best performance on time-definite parcel service in 2019 according to the State Post Bureau of China. Over the years, SFH has gradually expanded from core express delivery into comprehensive business segments of the logistic industry including freight, cold chain, international and intra-city services, cross-border logistics and supply chain management. SFH is the largest express delivery company in China and ranked fourth globally in terms of revenue among all postal and express delivery services enterprises in 2019, according to the Market Consultant Report. According to the Express Delivery Service Satisfaction Survey conducted by the State Post Bureau of China from 2013 to 2020, SFH ranked first in overall satisfaction for eight consecutive years.

Over the last 28 years, SFH has developed a comprehensive and integrated logistics network, which is made up of (a) a ground network with (i) a nationwide express delivery network covering 335 prefecture-level cities, 2,835 county-level cities and approximately 18,000 direct service points in the PRC and (ii) an overseas express delivery network covering 71 countries as at 30 June 2020; (b) an aviation network with a total of 73 all-cargo aircrafts, 2,004 cargo aircraft and commercial flight routes as at 30 June 2020 and an average of 3,202 flights per day for the six months ended 30 June 2020; and (c) an information network with smart platforms, artificial intelligence systems and smart logistics map to support SFH’s logistics and supply management solution offering.

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GROWTH POTENTIAL THROUGH FUTURE ACQUISITIONS OF PIPELINE ASSETS FROM THE SFH GROUP

To support the expansion of its logistics operations and service network, SFH has developed or acquired a number of real estate projects across the PRC. As at 30 June 2020, SFH has property projects in 46 PRC cities, with total planned construction area of approximately 4.7 million sq.m., and completed construction areas of 1.6 million sq.m.. Many of these property projects, like the Properties, are modern logistics properties which have integrated facilities dedicated to the sorting, distribution and/or storage of goods.

As the sponsor of SF REIT, SFH is committed to support the future expansion and growth of SF REIT. Accordingly, SFH has agreed to grant a ROFR which shall give SF REIT access to potential acquisition opportunities from SFH or SFH Relevant Subsidiaries for the first five years upon [REDACTED]. Under the ROFR, if SFH or SFH Relevant Subsidiaries propose to dispose of a Relevant Property, SFH must first give a Sale Notice to the REIT Manager and the Trustee and allow the REIT Manager to elect to exercise the ROFR to acquire such property by a pre-agreed time. A Relevant Property must meet the following criteria: (i) the property must fulfil (or would reasonably be regarded as fulfiling) the investment criteria and property characteristics, and is consistent (or would reasonably be regarded as being consistent) with the investment strategy of the REIT Manager for property investments by SF REIT; (ii) the property must be a completed property; and (iii) SFH directly or indirectly holds majority ownership interest in the property, and no pre-emptive rights have been granted to the minority owners (if any). For further details, please refer to the section headed “Material Agreements and Other Documents – Deed of Right of First Refusal” in this Document.

The REIT Manager believes the ROFR, backed by SFH’s network and resources, will be beneficial and instrumental to SF REIT’s future expansion and income growth. After [REDACTED], the REIT Manager will, leveraging on its knowledge and expertise in conducting property investment, actively search for suitable acquisition opportunities for SF REIT.

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HIGHLY EXPERIENCED MANAGEMENT TEAM WITH A PROVEN TRACK RECORD

SF REIT is managed by the REIT Manager, SF REIT Asset Management Limited, who has the overall power and responsibility to manage SF REIT and the Properties. The REIT Manager is supported by the PRC Operations Managers and the Hong Kong Property Manager, who have been delegated certain day-to-day operational functions but are subject to the oversight and supervision of the REIT Manager. Each of the REIT Manager and the PRC Operations Managers are indirectly wholly-owned by SFH and composed of personnel who have been operating and managing the Properties historically. The Hong Kong Property Manager, being an independent third party of SF REIT and a reputable professional property management service company, has serviced the Hong Kong Property since 2017.

The operation and property management teams have a proven track record of actively managing the Properties and delivering consistent operating results. The Properties recorded a high average Occupancy Rate of 94.9% as at the Latest Practicable Date, and the NPI increased by 6.9% year-on-year from 2018 to 2019.

For further details about the backgrounds and track record of the PRC Operations Managers and the Hong Kong Property Manager, please refer to the section headed “The PRC Operations Managers and the Hong Kong Property Manager” in this Document.

The Board and the senior executives of the REIT Manager have extensive industry experience in property investment and property management as well as expertise in the logistics industry. The senior management team of the REIT Manager, who will be responsible for the day-to-day operation of SF REIT, is highly experienced in managing a REIT’s investments and operations. In particular, Mr. Hubert Chak, the Chief Executive Officer, an executive Director, and a [REDACTED] of the REIT Manager, has over 30 years of experience in the real estate and financial industries and was previously the director of finance and a responsible officer at Link Asset Management Limited, the manager of Link Real Estate Investment Trust (stock code: 823), where he oversaw the finance, capital markets and investor relations functions of Link Real Estate Investment Trust.

Having regard to the track record of the operation and property management teams as well as the expertise and experience of its senior management team, the REIT Manager is confident that SF REIT will be able to deliver to Unitholders long-term and stable distribution with continuous enhancement of the value of its assets.

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