Link REIT Buys Beijing Shopping Centre from ARA Fund for RMB 2.56B

Link Asset Management Limited, the manager of Hong Kong’s Link Real Estate Investment Trust, announced today its acquisition of Beijing Jingtong Roosevelt Plaza, a recently completed shopping centre in Beijing’s suburban Tongzhou district for RMB 2.56 billion ($369 million).

The Hong Kong-based firm, which manages Asia’s largest real estate investment trust, has agreed to buy 100 percent of the equity in the 67,546 square metre (727,059 square foot) mall from a fund managed by APM Property Management, the property management arm of Warburg Pincus-backed ARA Asset Management.

The acquisition makes retail asset in Tongzhou’s Liyuan Business Circle Link REIT’s second Beijing property and its fourth acquisition in mainland China.

Betting on Beijing’s Plan to Boost Tongzhou

“This metro-linked retail property is located in the rapidly developing district of Tongzhou, which has recorded robust growth in residents’ disposable income in recent years,” George Hongchoy, chief executive officer of Link Asset Management said in a statement. “Building on our success with EC Mall, our first asset in the capital, we intend to strengthen the mall’s footfall and rental growth by enhancing product and service offerings to serve the district’s expanding customer base.”

Hongchoy pointed to the residential projects being developed within the mall’s catchment area, along with Beijing government plans to relocate many of the city’s administrative offices to the district as helping to create demand for the lifestyle attractions and entertainment facilities featured in the facility, which is adjacent to the 23-storey Jincheng Center office building in Tongzhou as well as being next to the Jiukeshu station of the Batong metro line.

Link REIT Mainland Assets Near 10% of Portfolio

The recently completed property was over 96 percent occupied at the end of October, according to the Link REIT statement, and was generating monthly gross income of RMB 10.3 million. Analysts familiar with the asset estimated the investment yield for the acquisition at 4.8 percent.

Link Asset Management, which had earlier set a target of having mainland properties account for 20 percent of the trust’s assets, said that following this most recent acquisition, assets located north of Hong Kong’s borders now account for 9.5 percent of Link REIT’s total asset value.