Link Asset Management Ltd, which manages Hong Kong’s Link REIT announced today that the real estate investment trust has sold off five of its retail properties for a total of HK$1.7 billion ($219 million).
The five shopping malls, all in Hong Kong, were each sold to separate buyers for a total consideration more than 30 percent over their appraised value.
Link REIT, which is Asia’s largest real estate investment trust, had put the five properties up for sale just over one month ago, saying that it was looking for opportunities to streamline its portfolio by disposing of non-core assets.
Five Malls, 200 Buyers and 30 Offers
The REIT’s tender of the Fung Wah Estate Retail and Car Park, the Ka Fuk Shopping Centre, the Kwong Tin Shopping Centre, the Siu On Court Retail and Car Park and the Tin Wan Shopping Centre, attracted interest from over 200 potential buyers, according to a statement from the management.
“We are pleased with the market’s response, which has achieved prices well above valuation, and registered a record number of over 30 offers from investors,” said George Hongchoy, Chief Executive Officer of Link Asset Management. “Disposal is part of our capital recycling strategy to create value for unitholders. As a responsible manager, we will continue to review the portfolio for opportunities to streamline and improve operating efficiency.”
The tender process, which was managed by property consultancies, Savills (Hong Kong) Limited and DTZ pulled in offers from property funds, nonprofits and (given that two of the properties involved parking facilities) car park operators. The winning bidders included some recently formed companies, as well as existing local Hong Kong corporations.
|Property Name||Buyer||Consideration (HK$)|
|Fung Wah Estate Retail and Car Park||Max Trinity International Limited||$110,000,000|
|Ka Fuk Shopping Centre||Yan Yan Motors Limited||$588,338,000|
|Kwong Tin Shopping Centre||Yau Man Investment Limited||$406,890,000|
|Siu On Court Retail and Car Park||Moonlight Shadow Holdings Limited||$125,000,000|
|Tin Wan Shopping Centre||Ace Precision Investments||$486,268,899|
Full details of the asset disposals, which are expected to conclude on December 31st, are included in this statement.
Link Asset Management indicated that proceeds from the disposal will be used to fund potential future acquisitions, as well as unit buy-back opportunities and for working capital. as well as for general working capital purposes of Link REIT.
This year the Link REIT has become active outside of its home base in Hong Kong, picking up its first mainland asset in March, and then making the mainland’s biggest acquisition of the year by purchasing Corporate Avenue One in Shanghai for $1.1 billion in July.