Link REIT Closes on RMB 4.1B Buy of GZ Mall from Morgan Stanley and Gaw

Hong Kong’s Link REIT has completed its RMB 4.1 billion ($589 million) acquisition of the Metropolitan Plaza mall in Guangzhou from funds controlled by Morgan Stanley and Gaw Capital, according to a recent statement by the manager of the real estate investment trust.

Link Asset Management, which manages the $16.5 billion Hong Kong-listed investment vehicle announced the completion of the deal for the 88,726 square metre (955,038 square foot) shopping centre just over one month after revealing the signing of a sale-purchase agreement for the property.

Hong Kong’s Biggest REIT Likes Its New GZ Location

“We are delighted to have acquired our first Guangzhou property, which along with the EC Mall in Beijing and Link Square in Shanghai, further strengthens our presence in China,” said George Hongchoy, CEO of Link Asset Management. Hongchoy added that, “We believe this is a quality property with excellent growth prospects and we are confident that we can extract its full potential with asset enhancement and operational improvement plans.”

The mid-market mall in Liwan district benefits from its location directly above a metro station serving Guangzhou’s metro lines 1 and 6. Retail occupancy at the multi-storey property stood at 94.1 percent at the end of February this year. Metropolitan Plaza is Link REIT’s second mainland retail property, after it purchased the EC Mall in Beijing’s Zhongguancun area for RMB 2.5 billion in March 2015.

Adding to Asia’s Largest Retail Portfolio

Link REIT, which owns a portfolio of 154 shopping centres covering 10 million square feet in Hong Kong, said that it intends to hold the property at 8 Huangsha Road in Guangzhou as a long-term investment. The listed real estate investment trust’s other mainland property is phase one of Shui On Land’s Corporate Avenue office complex in Shanghai which it purchased for RMB 6.6 billion in July 2015.

The Guangzhou retail property was originally developed by Li Ka-shing’s Cheung Kong and completed in 2011. The shopping centre was acquired by Morgan Stanley’s North Haven Real Estate Fund VII Global and Gaw Capital’s Gateway Fund IV in 2013, with Morgan Stanley holding 41.2 percent and Gaw controlling 58.8 percent of the joint venture.