Hon Kwok Land Investment Company Limited (Hon Kwok) and its parent Chinney Investments, Limited (CIL) have agreed to sell a capsule-hotel property in Asakusa, Tokyo, for JPY 2.72 billion (HK$133.40 million) to Daiwa House Industry Co., Ltd. The sale and purchase agreement was signed on 6 April 2026, with completion scheduled for 8 July 2026 (extendable to 7 October 2026 at the seller’s option). The consideration will be settled in cash on completion.

The asset—161 capsules and five guest rooms across 1,316 sq.m. in Kaminarimon 1, Taito-ku—was acquired in August 2023 for JPY 1.57 billion (HK$77.10 million). An independent valuer pegged its 1 March 2026 market value at JPY 2.50 billion (HK$122.50 million); the agreed sale price therefore represents an 8.9% premium to valuation, 73.1% above the 2023 acquisition cost and 45.4% higher than a previously aborted 2024 sale at JPY 1.87 billion.

Transaction economics • Gross consideration: JPY 2.72 billion • Direct costs, including a JPY 162.80 million early-termination fee to the incumbent operator and other expenses: JPY 367.90 million • Expected accounting impact: Hon Kwok to book a loss of about JPY 145.00 million (HK$7.10 million); CIL to recognise a loss of roughly JPY 99.00 million (HK$4.90 million) for FY 2026/27, subject to audit. • Net cash proceeds after mortgage repayment and fees: c. JPY 1.45 billion (HK$71.20 million), earmarked partly for Hon Kwok’s general working capital in Hong Kong and partly for future investments in Japan.

Historical operating metrics Rental income since acquisition has totalled HK$8.43 million, generating cumulative post-tax profit of HK$5.75 million across: – 30 Aug 2023–31 Mar 2024: HK$1.90 million revenue; HK$0.25 million net profit – FY Mar 2025: HK$3.63 million revenue; HK$4.16 million net profit – 9 Mths to Dec 2025: HK$2.89 million revenue; HK$1.35 million net profit

Strategic rationale Management views the capsule-hotel format as misaligned with the JV Company’s up-market hotel portfolio. The disposal crystallises a substantial price appreciation while releasing capital amid heightened geopolitical uncertainty. The buyer, Daiwa House Industry—one of Japan’s largest construction and hospitality groups—will take vacant possession following the operator’s exit by 30 June 2026.

Regulatory classification For Hon Kwok, one applicable percentage ratio under Hong Kong Listing Rule 14.07 exceeds 5% but remains below 25%, rendering the deal a discloseable transaction requiring announcement only. For CIL, alternative size-test treatment places all ratios below 5%, so the transaction is not notifiable; CIL nevertheless issued the announcement voluntarily.

Completion remains subject to customary closing conditions, with a contractual provision for either party to terminate the agreement—subject to a 20% break fee—should material breaches remain uncured within a reasonable period.