Changes to Investment Management Agreement

23 November 2020

Macau Property Opportunities Fund Limited

Changes to Investment Management Agreement

Proposed changes to Investment Management Agreement

As announced on 10th November 2020, the Board has been in discussions with Sniper Capital, the Company's Investment Manager (the "Manager") regarding the impact of COVID-19 on the Macau market and the unforeseen delay to the realisation of the Company's assets which this has created. It remains the collective intention to realise the Company's assets at attractive values in a timely manner, noting that the Company has been in realisation mode for some time (since 2016). During 2020 the Manager has achieved asset disposals of the two remaining individual units in One Central Residences and two further residential units and a car park space in the Fountainside at close to external valuations. However, the COVID-19 global pandemic and subsequent travel restrictions has meant that efforts to achieve realisations across the Company's other key assets which are targeted at overseas prospects have been severely hampered.

After a promising start to 2020, Macau's two main business activities, gaming and tourism were effectively closed down, as travel restrictions closed Macau to visitors. Recently, however, some positive signs of recovery are emerging, with greater China in particular managing to keep a level of control on the COVID-19 virus. In the past few months Macau has gradually been opened up to visitors, which has provided a much needed boost to tourism and gaming forecasts, albeit off an extremely low base. Despite these positive developments, recovery in the overall Macau economy remains extremely fragile and hence divestment plans for the Waterside and Estrada da Penha remain on hold, and beyond the control of the Company and the Manager, pending a more robust and sustainable recovery.

Against this challenging backdrop, it is clear to the Board that it is difficult for the Manager to continue to operate and strive for the realisation of assets within the timeframe envisaged, under the current fee structure. The current fee arrangements with the Manager were agreed in late 2019, based on an encouraging pipeline of prospects, and following extensive dialogue with the Manager and the Company's significant shareholders. This fee arrangement was focussed on aligning Manager remuneration with delivery of realisations at attractive and realistic values. The agreement of that fee structure was based on pre-COVID assumptions as to the realisation of most assets in 2020, and the elimination of management fees in 2021, but with the opportunity to earn incentive fees if the divestment objectives were achieved.

The ongoing pandemic has meant that major divestments have not been achieved during 2020 and hence realisation fees have not been paid.  As such  the Manager would not be able to continue to operate in 2021 without a management fee. The Board has carefully examined the effect of the change in circumstances, has explored with the Manager the significant cost-cutting measures which they have undertaken in the context of the divestment plan, and has assessed the minimum contribution necessary for the Manager to continue to complete the Company's realisation strategy. In light of this, and the Boards view that the Manager's detailed and intricate knowledge of the Company's portfolio of assets is key to the divestment strategy, it has been  decided that adjustments should  be made to the current fee structure, but keeping a very clear focus on the realisation of assets as the primary objective.

The changes entail the introduction of a further reduced management fee for 2021 of US$100,000 per month fixed at $1,200,000 for 2021 as a whole, and the extension of the existing 2020 realisation fee arrangements into 2021, using the 30 September 2019 valuation basis for calculating any realisation fees due (the "2019 Valuation"). However, to offset this fee the maximum amount which could be payable under the realisation fees will be reduced by the amount of management fee paid for 2021. There will be no fees rolled forward to 2022 under this arrangement, keeping all focus on realising all assets in 2021. On the basis of this arrangement, the following fees will be capable of being earned by the Manager:

-    A management fee totalling $1.2m;

-    A realisation fee of (i) 2.5% on disposals at or above 90% of NAV as at 2019 Valuation; or (ii) 1.5% on disposals at or above 80% (but less than 90%) of NAV as at 2019 Valuation;

-    An extra incentive fee of 1% if all assets sold in 2021 at or above the 2019 valuation (extendable at the discretion of the Board on the basis of the original terms).

The Board considers the new arrangements to be fair in the context of the impact of the COVID-19 pandemic.  They are intended to ensure that the Manager, which the Board continues to believe is best placed to realise the assets, is able to continue to operate and is incentivised to strive to deliver realisations on behalf of the Company and its Shareholders. The changes to the fee arrangements constitute a small related party transaction under the Listing Rules, and the Company has obtained written confirmation from our Sponsor that the terms are fair and reasonable insofar as the Company's shareholders are concerned.

The Board would like to thank Shareholders for their continued support and patience with regard to the Company's realisation strategy, and recognition of the inherent value in the Company's portfolio of assets.

Notes

About Macau Property Opportunities Fund

Premium listed on the London Stock Exchange, Macau Property Opportunities Fund Limited is a closed-end investment company registered in Guernsey and is the only quoted property fund dedicated to investing in Macau, the world's largest gaming market and the only city in China where gaming is legalised.

Launched in 2006, the Company targets strategic property investment and development opportunities in Macau. Its current portfolio comprises prime residential property assets.

The Company is managed by Sniper Capital Limited, an Asia based property investment manager with an established track record in fund management and investment advisory.

Stock Code

London Stock Exchange: MPO

LEI

213800NOAO11OWIMLR72

For further information:

Investor Relations

Sniper Capital Limited

Tel: +65 6222 1440

[email protected]

www.snipercapital.com

Corporate Broker

Liberum Capital

Gillian Martin / Owen Matthews

Tel: +44 20 3100 2000

Company Secretary & Administrator

Ocorian Administration (Guernsey) Limited

Kevin Smith

Tel: +44 14 8174 2742