SMART GLOBE's subsidiary has signed a lease agreement with Harmony Prosper Zambia for land located in Zambia

According to the announcement from SMART GLOBE (01481), on October 31, 2025, the company's indirectly non-wholly-owned subsidiary Tera Logistics (as the lessor) entered into an agreement with the lessee (Harmony Prosper Zambia Limited) for a lease area located adjacent to the border of Zambia and the Democratic Republic of the Congo, for a period of 4 years and 11 months, with a rent of USD 12,500 per month. Under this agreement, Tera Logistics has the right or obligation to acquire the buildings constructed and owned by the lessee, with a total construction cost not exceeding USD 6 million (equivalent to HKD 46.8 million).

The land refers to two plots located in Ndola, Copperbelt Province, Zambia: (a) Plot Kaniki No. 7 (approximately 46.67 hectares); and (b) Subdivision F/2957 A (approximately 48.44 hectares).

In response to the increasing demand for logistics and warehousing services, and as part of the group's supply chain management services expansion plan, the board believes that entering into this agreement will significantly enhance the group's logistics and warehousing capabilities and improve the overall financial condition:

Revenue Generation and Asset Utilization: This agreement will generate stable rental income for the group during the lease term. By leasing the area to high-quality tenants, the group can maximize the return on land assets without significant capital expenditure.

Strategic Partnership: This agreement establishes a long-term strategic partnership with the lessee, allowing the group to expand its supply chain management services footprint in Zambia. Under this agreement, the lessee commits to prioritizing the use of the group's transportation services under the same commercial conditions, further enhancing the group's integrated logistics service offerings.

Risk Mitigation: Contingent acquisition arrangements ensure that at the end of the lease term or in the event of early termination, the group is obligated to acquire the buildings constructed by the lessee at book net value (after 6.5 years of amortization), allowing the group to expand its warehousing and production facilities without incurring upfront construction costs and risks.

Market Expansion: This agreement enables the group to expand its business in the rapidly growing logistics market in sub-Saharan Africa. The factories and warehouse facilities to be constructed by the lessee will complement the group's existing supply chain management infrastructure, enhancing the group's ability to serve mining and commodity trading clients