Landmark transaction strengthens two listed companies, establishes a dedicated commercial property platform, and positions the Group for its next phase of sustainable growth.

Lanka Realty Investments PLC (LRI PLC) has successfully completed the strategic transfer of its 50.886% controlling stake in On'ally Holdings PLC to Lee Hedges PLC for approximately Rs. 2.26 billion.

The transaction represents a significant milestone in the Group's long-term strategy to establish Lee Hedges PLC as its dedicated listed commercial property platform while enhancing LRI PLC's financial flexibility through disciplined capital recycling.

Key Transaction Highlights

• Strategic transfer completed of LRI PLC's 50.886% controlling stake in On'ally Holdings PLC to Lee Hedges PLC.
• Transaction value: Approximately Rs. 2.26 billion.
• Estimated disposal gain: Approximately Rs. 834.09 million before transaction costs, taxation, and final audit adjustments.
• Dividends received during ownership: Approximately Rs. 525.31 million.
• Total cash value generated: Approximately Rs. 2.79 billion. Strengthened financial position: Improved liquidity, a stronger balance sheet, and increased capacity for future investments.

Creating Value Through Active Asset Management

LRI PLC acquired its investment in On'ally Holdings PLC during a challenging period for the commercial property sector, recognising the long-term potential of Unity Plaza. Over the course of its ownership, the company invested more than Rs. 400 million to renovate and modernise the property, upgrading infrastructure, enhancing common areas, and optimising the tenant mix.

These strategic initiatives delivered substantial operational improvements:

Revenue: Increased from Rs. 181.70 million to Rs. 413.85 million Occupancy: Improved from 86.90% to 96.37% Retail rental rates: Increased from Rs. 332.53 to Rs. 966.73 per sq. ft. Office rental rates: Increased from Rs. 122.25 to Rs. 289.12 per sq. ft.

These achievements demonstrate LRI PLC's ability to unlock value through active asset management and disciplined long-term investment.

Delivering Strong Returns to Shareholders

The investment generated approximately Rs. 2.79 billion in total cash value for LRI PLC, including dividends of approximately Rs. 525.31 million received during the investment period.

The transaction is also expected to generate an estimated separate-company disposal gain of approximately Rs. 834.09 million, before transaction costs, taxation, and final audit adjustments.

Lee Hedges PLC Becomes the Group's Flagship Commercial Property Company

The acquisition significantly strengthens Lee Hedges PLC by adding one of Colombo's most recognisable income-producing commercial assets to its portfolio.

For more than three decades, Unity Plaza has remained Sri Lanka's premier technology retail and office destination, benefiting from strong customer traffic, a diversified tenant base, and resilient recurring rental income. Its addition enhances the company's scale, earnings visibility, and long-term growth prospects while providing a strong platform for future commercial property acquisitions.

Strategic Benefits for Lee Hedges PLC

• Acquisition of a landmark income-producing commercial property.
• Stronger recurring rental income and enhanced earnings visibility.
• Increased scale to support future commercial property acquisitions.
• Greater operational efficiencies and shareholder value creation.
• Enhanced positioning as the Group's dedicated listed commercial property platform.

Strengthening LRI PLC Through Disciplined Capital Recycling

The transaction unlocks approximately Rs. 2.26 billion in capital for LRI PLC, substantially improving liquidity and creating additional financial flexibility to reduce borrowings, optimise the balance sheet, and pursue new strategic investment opportunities.

Importantly, LRI PLC continues to retain an indirect strategic interest in Unity Plaza through its controlling shareholding in Lee Hedges PLC. This allows shareholders to continue participating in the future growth of this landmark asset while benefiting from a simplified and more efficient corporate structure.

Strategic Benefits for LRI PLC

• Unlocks approximately Rs. 2.26 billion in capital.
• Improves liquidity and strengthens the balance sheet.
• Provides greater capacity to reduce finance costs.
• Creates flexibility to pursue strategic acquisitions and investments.
• Demonstrates disciplined capital allocation and active portfolio management.
• Maintains indirect exposure to the future growth of Unity Plaza through Lee Hedges PLC.

Chairman's Statement

*"This transaction reflects the culmination of a disciplined, multi-year approach to asset management and value creation, while positioning the Group for its next phase of growth. By consolidating Unity Plaza within Lee Hedges PLC, the Group has established a dedicated listed commercial property platform with meaningful scale, recurring income, and future acquisition potential.

At the same time, LRI PLC has strengthened its balance sheet, released significant liquidity, and enhanced its ability to recycle capital into new investment opportunities. The Group continues to retain exposure to this iconic asset while achieving a simpler and more focused corporate structure that the Board believes will support sustainable long-term value for shareholders.

The Board acknowledges the contribution of the management team, led by Executive Directors Mr. Hardy Jamaldeen and Mr. Archie Warman, in delivering this outcome."*

Saravanan Neelakandan Chairman Lanka Realty Investments PLC

Looking Ahead

This transaction marks another significant milestone in the Group's long-term strategy of disciplined investment management, active asset enhancement, and capital recycling.

With Lee Hedges PLC now established as the Group's dedicated listed commercial property company and LRI PLC benefiting from enhanced financial flexibility, both companies are well positioned to capitalise on future opportunities, expand their investment portfolios, and deliver sustainable long-term value to shareholders.

The transaction reinforces the Group's commitment to creating value through strategic portfolio management, prudent capital allocation, and a focused approach to long-term growth.