The REIT Manager’s primary strategy is to maintain and grow a strong and balanced investment portfolio of hotels and hospitality-related properties. The REIT Manager intends to achieve its objectives of long-term growth in distributions and in the net asset value per Unit of Regal REIT through a combination of the following core strategies:

Internal Growth Strategy:
The core growth strategy for the hotel portfolio is to build up value using pro-active asset management to maximise total hotel revenue, RevPAR and NPI performance and, thereby, achieving higher variable rent from the hotels payable to Regal REIT.

External Growth Strategy:
The core strategy for growing the portfolio of hotels is to selectively acquire additional hotel properties meeting the following criteria:

• The expected yield enhances returns;
• Target Greater China with a focus on Hong Kong, Macao and Mainland China and on markets and locations in urban centres and popular resort areas with growth potential;
• 4 and 5 star-rated (PRC Star rating system) full-service hotels;
• Larger hotels with more than approximately 200 rooms; and
• Value–adding opportunities, e.g. properties that may be undermanaged or in need of capital investment and/or which may benefit from market re-positioning and the Regal brand and/or which may be extended or have other asset enhancement opportunities.