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Link REIT sells more shopping centres
December 19, 2016
Inside Retail Hong Kong
Real-estate investment trust Link REIT has sold off five more retail properties in Hong Kong, raising HK$3.64 billion (US$469 million) as it continues its disposal of community shopping centres.
In an announcement to the Hong Kong stock exchange, its management has revealed the sale of the Cheung Hong Commercial Centre, On Yam Shopping Centre, Shek Wai Kok Commercial Centre, Sui Wo Court Commercial Centre and Sun Tin Wai Commercial Centre, all in Hong Kong’s New Territories.
Different buyers bought the properties following a public tender process. It was the fourth time this year Link REIT has sold off assets from its portfolio, much of which was established when the Hong Kong Housing Authority hived off 151 shopping malls and extra assets as part of setting up Link Reit as a publicly traded trust in 2005.
The total consideration offered by the winning bidders amounts to 29 per cent more than the aggregate appraised value of the five properties, Link REIT says. The biggest bid was by new private company Billion Legacy Enterprises (HK), which agreed to pay HK$1.15 billion for the Cheung Hong Commercial Centre. The 133,256 sqft (12,379 sqm), five-storey retail building with a three-level car park in Tsing Yi was completed in 1980.
“The tender attracted a broad range of interested parties including listed companies, local private investors and investors of mainland Chinese background,” says Link Asset Management CEO George Hongchoy.
The REIT says proceeds of the sale will be used for general working-capital purposes including debt repayment and, where appropriate, unit buy-back. Completion of the disposal is expected to take place on February 14.
Link REIT has disposed of 19 community retail centres for about HK$8.99 billion this year, and made just one acquisition – an office tower on Nathan Road in Kowloon for HK$5.91 billion in February.