Property investor Link Reit has sold 12 Hong Kong properties to Gaw Capital Partners for $12.01 billion (US$1.5 billion) a price which represents a 32.1 per cent premium over their existing appraisal value.
Link will get a net disposal gain of about $2.788 billion.
The deal follows what is believed to be a spirited bidding process between Gaw, US private equity company Blackstone and other unidentified potential investors following Link’s decision earlier this year to review its asset portfolio.
“Despite recent market volatility, the property sale attracted overwhelming interest from leading international investors, including global and regional private equity funds, as well as local investors,” said Link Asset Management CEO George Hongchoy.
“The competitive bids and final sale price, at better pricing than those achieved in the past disposals, underline global investor confidence in Hong Kong’s economy and its real estate sector while further demonstrating Link’s ability in managing and enhancing assets.”
The 12 properties are:
Ap Lei Chau Property
Chun Shek Property
King Lam Property
Lei Tung Property
Ming Tak Property
Shan King Property
Siu Hei Property
Tai Ping Property
Wah Ming Property
Wah Sum Property
Wang Tau Hom Property
Hongchoy said Link is confident that with Gaw Capital Partners’ expertise and experience in asset management, the company will continue to create value for tenants and customers by further enhancing the operations of the properties.
Link said proceeds from the sale will be used to pursue new investment opportunities in Hong Kong and first-tier cities in Mainland China, in addition to general working capital purposes including debt repayment and, where appropriate, unit buy-backs.
The disposals will be settled on March 13.
HSBC and Cushman & Wakefield were the advisors for both the portfolio review and the disposal process.
Link Asset Management reassured tenants and nearby residents that the company would “keep them informed on matters relating to the transfer of ownership of the 12 properties, and the purchaser’s assumption of the obligations set out in the Hong Kong Housing Authority covenants”.