The Link REIT Signs $516M Club Loan to Fund Corporate Avenue Deal

Hong Kong’s Link REIT this week announced the signing of a HK$4 billion ($516 million) credit facility with seven major banks, as the real estate investment trust finalises arrangements for its $1.06 billion acquisition of a Shanghai commercial complex.

The Link REIT, which is Asia’s largest real estate investment trust signed the club loan deal less than one month after agreeing to buy two buildings in Shui On Land’s Corporate Avenue development in Shanghai in a record-breaking acquisition.

The Link REIT Gets Some Cheap Cash to Buy Billion Dollar Buildings

“The new club facility is in line with The Link REIT’s capital management strategy to achieve low-cost funding to support our growth initiatives,” George Hongchoy, Chief Executive Officer of The Link Management Limited commented in a statement.

The HK$4 billion club facility is structured as a 50:50 split between term-loan and revolving credit tranches, with a maturity of four years at 97 basis points margin over HIBOR. Total subscription for the club facility came to nearly twice the HK$4 billion facility amount, according to the Link REIT, which said the loan will be used as general working capital for the group.

Mandated lead arrangers of the club facility are Australia and New Zealand Banking Group Limited, Bank of China (Hong Kong) Limited, DBS Bank Ltd., Hang Seng Bank Limited, The Hongkong & Shanghai Banking Corporation Limited, Mizuho Bank, Ltd. and Sumitomo Mitsui Banking Corporation.

Shui On Sell Off Moving Forward

The Link REIT also announced that it served notice to Shui On on August 14th to extend completion of the acquisition of Corporate Avenue 1 & 2 in Shanghai to 31 August.

Shui On agreed to sell Corporate Avenue 1 & 2, which make up the first phase of the five building commercial project in late July. The developer is also said to be closing in on a deal to sell the unfinished third phase of Corporate Avenue to a consortium lead by developer China Vanke.