Regal REIT maintains a conservative capital structure which limits the amount of debt financing used. The REIT Code sets a maximum level of borrowings to 50% of the total gross asset value of Regal REIT.

As at 31st December, 2021, the gearing ratio of Regal REIT was 43.9% (2020: 44.3%), being the gross amount of the
outstanding loans aggregating HK$10,066.0 million, which takes into account: (a) the 2021 IH Facilities of HK$4,590.0
million; (b) the 2018 RKH Facility of HK$3,000.0 million; (c) the 2019 WC Facility of HK$405.0 million; (d) the 2018 SW
Facilities of HK$790.0 million; (e) the 2018 FH Facilities of HK$660.0 million; and (f) the 2020 MTW Facility of HK$621.0
million, as compared to the total gross assets of Regal REIT of HK$22,912.5 million. The gearing ratio is below the
maximum 50% permitted under the REIT Code.

As at 31st December, 2021, all nine Regal REIT properties with an aggregate carrying value of HK$22,724.0 million were
pledged to secure bank loan facilities granted to Regal REIT.