Franshion Properties (China) Limited Announces 2010 Annual Results

Profit attributable to shareholders surges 46% to HK$ 1,713.6 million

To maintain high-end positioning with strategy of property sales and holdings

(Hong Kong, March 17, 2011) Franshion Properties (China) Limited ( Franshion Properties or the Company , Stock Code: 00817) today announced its annual results for the year ended 31 December 2010.

During the year, the total revenue of Franshion Properties was HK$ 6,348.0 million (2009: HK$6,320.9 million), which was on par with the previous year. In 2010, profit attributable to shareholders amounted to HK$ 1,713.6 million, representing a significant increase of 45.9% from the previous year. Basic earnings per share were increased by 36.5% to HK18.7 cents from HK13.7 cents. Excluding fair value gains on investment properties, net of deferred tax, profit attributable to shareholders amounted to HK$ 1,067.3 million, representing an increase of 1.9% from 2009.

The board of directors has proposed a final dividend of HK2.5 cents per share. (2009: HK2.5 cents per share).

During the year, the three major business segments of Franshion Properties, property development, property leasing and hotel operations, reported balanced development and accounted for 46%, 14% and 32% of the Group s total revenue respectively. Among the three businesses, the revenue from hotel operations recorded the largest growth of 27.3%, mainly due to the global economic recovery and increased international business activities, together with the Shanghai World Expo, which have strongly boosted the high-end business hotel market in Beijing and Shanghai.

Total gross floor area of the three business segments reached 3.53 million square meters (apart from the total gross floor area of 9 million square meters of a newly purchased project in Changsha). As of 31 December 2010, cash and cash equivalents held by the Company amounted to HK$ 11,229.5 million.

Mr. Luo Dongjiang, Chairman of Franshion Properties, said, Since 2010, the Chinese government has taken a host of stern measures such as the New National Ten and the New National Eight to tighten its control over the property market. These measures, on the one hand, aim to curb irrational demand for investment and speculation through raising the percentage of mortgage down payment and interest rates, limiting the number of property purchases and launching property tax trial, and on the other hand, aim to boost the market supply to solve the housing problems of mid/low income families through increasing land supply, accelerating affordable housing construction and enhancing government accountability. Compared to residential housing, commercial properties were less affected by policy tightening, with high quality offices, hotels and retail properties located at prime sites of key cities becoming more attractive for investment. Positioned as a high-end commercial property developer and operator with a well-established asset portfolio focused on property development, property leasing and hotel operation, Franshion Properties has achieved a more balanced and stable development in the three business segments and has created an increasingly clear synergy among them in 2010.

Property Development

In 2010, the property development segment continued to generate a considerable revenue to the Company, although sales revenue from this segment decreased by 17.3% from 2009 to HK$ 2,924.7 million. The drop in the revenue mainly resulted from the lumpy completion of projects. Starting from 2012, the completed salable area will increase significantly. Currently, the Company owns 8 property development projects in different development stages located in Beijing, Shanghai and Lijiang.

The sales of the majority of the Shanghai Port International Cruise Terminal Project have been completed and part of the sales was recognized during the year, accounting for the largest profit contribution to the Company. The Shanghai International Shipping Service Center under construction has been listed as one of the key projects in Shanghai and became an integral part of the city s urban growth strategies.

Construction works for Beijing Guangqu Jin Miao Palace Project and Shanghai Dongtan Jin Mao Noble Manor Project have been commenced and were well underway. Meanwhile, the preparatory work for Yunnan Lijiang projects was in progress. Last year, the Company also signed a cooperation agreement with Qingdao City regarding the joint development of Qingdao Lanhai Xingang City Project. In January 2011, Franshion Properties became an investor for the project of Changsha Meixi Lake International Service and Technology Innovation Town (the Changsha Meixi Lake project ).

Property Leasing

The investment properties owned by Franshion Properties includes Beijing Chemsunny World Trade Center, Sinochem Tower and Jin Mao Tower. During the year, the Company maintained relatively high occupancy rates and rental levels of the properties by means of flexible operating strategies and continuous optimization in the tenant mix, in addition to the advantages of their prime locations. This resulted in a stable revenue flow to the Company.

In 2010, sales revenue from the property leasing amounted to HK$ 859.6 million, which was substantially the same as that of the previous year. As of the end of 2010, the occupancy rates of Jin Mao Tower, Beijing Chemsunny World Trade Center and Sinochem Tower were 92.4%, 99.3% and 100% respectively. The total gross floor area of the Company s investment properties reached 364,000 square meters.

Hotel Operations

The hotel operations segment generated sales revenue of HK$ 2,007.4 million in 2010, up 27.3% from the previous year. The total gross floor area of the operating hotels totaled 409,000 square meters.

Franshion Properties owns six high-end hotels in China, namely Grand Hyatt Shanghai, Hilton Sanya Resort & Spa, The Ritz-Carlton in Sanya, Westin Beijing, Chaoyang, Wangfujing Grand Hotel and JW Marriott Shenzhen. These hotels provide a total of 2,872 guest rooms.

In 2010, the Company fully captured opportunities derived from the project of Hainan International Travel Island and the Shanghai World Expo. Coupled with enhanced efforts in marketing, the Company has expanded its market footprint and consolidated its leadership position among its peers with a significant growth in results performance. In comparison with 2009, Grand Hyatt Shanghai, JW Marriott Shenzhen and Westin Beijing, Chaoyang reported noticeable growths in their average occupancy rates in 2010.

Reserved Projects

Franshion Properties currently owns two reserved projects in Yunnan Lijiang, namely the Jin Mao World Heritage Park Redevelopment Project and Lijiang Jin Mao Mansion Project, and one in Changsha, the Changsha Meixi Lake project.

Both the Jin Mao World Heritage Park Redevelopment Project and Lijiang Jin Mao Mansion Project are planned for the development of high-end hotels as well as low-density residences. The Changsha Meixi Lake project, which occupies a gross area of approximate 11,452 mu, will be developed as the most competitive high-end international commercial and innovation center, as well as an ecological new residential town with scenic landscape in the central region.