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Tag: Link REIT

  • Hong Kong’s Link REIT Buys Shenzhen Mall for RMB 6.6B

    Hong Kong’s Link REIT Buys Shenzhen Mall for RMB 6.6B

    Link Asset Management has bought the Centralwalk shopping mall in Shenzhen’s CBD via its real estate investment trust. The RMB6.6 billion (US$981.9 million) transaction marks Link REIT’s first acquisition in Shenzhen, the second in the Greater Bay Area and its fifth in Mainland China, all in tier-one cities. Centralwalk is a five-storey retail centre in Shenzhen’s Futian District, home to the South China head offices of Fortune 500 companies, multinational corporations and leading domestic firms. The property sits atop two subway lines, providing a 14-minute link to Hong Kong and less than an hour to most parts of the Pearl River Delta region.

    “The acquisition marks another milestone in our expansion in China,” said Link CEO George Hongchoy.

    “Centralwalk is seated in the heart of the city’s booming commercial hub. It is strategically located at the juncture of two popular subway lines in Shenzhen and within a five-minute walk from the Futian high speed rail station. We see enormous upside potential in this asset as we will apply our expertise in asset enhancement and placemaking to attract footfall to this mall, unleashing its potential as a leisure and entertainment landmark in Shenzhen.”

    Upon settlement of the transaction next month, Link REIT will control approximately 5 million sqft of retail and office space in four tier-one cities on the Mainland: Beijing, Shanghai, Guangzhou and Shenzhen, with Mainland Chinese assets representing about 13.1 per cent of Link’s total asset value.

    “The acquisition will enable us to capture the exponential growth spurred by the high speed rail link and the Greater Bay Area development,” Hongchoy added. “With diversification of markets, we continue to play to our strengths to offer investors steady income and long-term growth opportunities.”

    Centralwalk has a retail floor area of about 903,100sqft, and its retail occupancy currently stands at around 100 per cent. It has a gross monthly passing income of RMB 23.8 million as at December last year.

    The property houses a wide variety of familiar brands and a dynamic mix of retailers, covering food and beverage, fashion, accessories, education, lifestyle, health and beauty, a supermarket and a cinema.

    Link is anticipating the opportunity to enhance the property’s rental reversion and performance through trade-mix and tenant-mix upgrade, given that retail tenancies expiring in 2019, 2020 and 2021 represent approximately 25.5 per cent, 24.8 per cent and 18.0 per cent respectively.

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  • Link REIT Buys Beijing Mall for RMB 2.56B

    Link REIT Buys Beijing Mall for RMB 2.56B

    Link REIT has reached a conditional agreement to acquire a RMB2.560 billion (US$368.8 million) shopping centre in Beijing. The property, Beijing Jingtong Roosevelt Plaza, is a seven-storey mall housing 268 retail tenants, with 576 car parks on two additional underground levels. Link said in a stock exchange filing that the property is located in Tongzhou, the eastern gateway to China’s capital, a rapidly developing district about 20km from central Beijing. It is in an established residential area with 30 per cent of the district’s population living within a 3km radius.

    The property has good connectivity, located on Beiyuan South Road, the district’s main artery, is a high-quality community mall with an occupancy rate of 96.2 per cent and a dynamic mix of retailers including food and beverage, fashion/accessories, kids/education and lifestyle, health and beauty, along with a cinema.

    Leases for about 20 per cent of the four year old centre’s tenancies (by space) expire in 2020, providing Link with an opportunity to enhance rental reversion and performance of the property by upgrading the trade mix.

    Link expects the net property income of the mall will increase, in turn bosting the capital value of the property, benefiting unitholders.

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  • Solid six months for Link Reit

    Solid six months for Link Reit

    Link Reit has improved like-for-like revenue by 7 per cent in the first half year, with car park revenues up 10 per cent and retail up 6.6 per cent. The valuation of Link’s investment properties portfolio reached HK$209.8 billion, an increase of 3.3 per cent compared to March 31.

    In a results announcement, the company said its portfolio “continued to demonstrate its resilience and provide a productive platform for our tenants to thrive” during a time of geopolitical and economic uncertainty.

    “Our efforts invested in asset management have yielded positive results for our retail portfolio,” the company said. “As at September 30, occupancy rate for the portfolio remained stable at 95.5 per cent and the overall portfolio reversion rate stood at 22.5 per cent. Average monthly unit rent improved to $65.7 per square foot (psf) as at September 30, up from $62.4 psf as at March 31.

    Four asset enhancement projects were completed during the six-month period: Fu Shin Shopping Centre, Homantin Plaza, Sam Shing Commercial Centre and Wan Tsui Commercial Complex. Link’s asset enhancement pipeline is filled with projects in various stages, including 10 projects currently underway, five preparing to commence and 19 projects undergoing review.

    On the mainland, Link’s three properties – EC Mall in Beijing, Metropolitan Plaza in Guangzhou, and Link Square 1 & 2 in Shanghai – performed “satisfactorily”, contributing a combined revenue of $490 million and net property income of $390 million. Increases of 22.8 per cent and 25.8 per cent, respectively. The retail portfolio occupancy rate was 98.8 per cent.

    “The latest addition to the portfolio, Metropolitan Plaza, continues to be a growth engine with vast potential to be unlocked. EC Mall’s reversion rate stayed at a satisfactory level and the new tenants have been warmly welcomed by the local community. Reversion rate of retail portfolio stood high at 43.2 per cent. We will continue to tailor asset management strategies to enhance our asset qualities and offerings to the neighbourhoods,” the company said.

    CEO George Hongchoy said Link is “well-placed to sustain its long-term growth trajectory while keeping foundation of business fundamentally sound and resilient”.

    The company is considering acquisitions and/or divestments that can drive sustainable return long term.

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  • Link REIT buys Guangzhou mall

    Link REIT buys Guangzhou mall

    Link REIT has bought a shopping mall in Guangzhou for RMB4.065 billion (HK$4.57 billion; US$588.4 million).

    The property, Metropolitan Plaza, is located at No. 8 Huangsha Road in Liwan District. It comprises retail space from basement level one to the third floor and two levels of parking.

    Its gross lettable area is about 85,732 sqm.

    Link REIT said in a stock exchange filing the acquisition was in line with its investment strategy to invest in income-producing real estate which has potential for long-term income and capital growth and to build a large and diversified portfolio of retail and/or commercial real estate in Hong Kong and in Tier-1 cities of the PRC.

    “Guangzhou (being such a Tier-1 city) is mature and the disposable income of Guangzhou residents has been rising. The property will add to Link’s portfolio of investments in Tier-1 cities of the PRC along with its shopping mall in Beijing and an office/retail property in Shanghai.”

    As at February 28, there were 219 tenancies at the property, occupying approximately 94.1 per cent of the total gross lettable area.

    The monthly gross income of the property (excluding management fees) was approximately

    RMB16.06 million. Food & beverage, fashion/accessories and kids/education account for, respectively, 33.4 per cent, 24.7 per cent and 13.7per cent of the total leased retail area.

    Link REIT said Liwan District is one of the most popular mass market shopping and leisure destinations in the city.

    It is also one of the most densely populated districts of Guangzhou, with a population of approximately 930,000 as of 2016. The property is strategically located on top of the intersection of Metro Lines 1 & 6 among the busiest Metro Lines in Guangzhou, with direct access to the station concourse.

    The Guangzhou mall opened for business in 2012.

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  • Hong Kong’s Link REIT posts double-digit growth

    Hong Kong’s Link REIT posts double-digit growth

    Link Asset Management, which manages Link Real Estate Investment Trust, Link REIT, increased both its revenue and net property income by double figures during the year ended March 31.

    Revenue rose 13.2 per cent to HK$8740 million (US$1125.68 million), while property income rose 14.9 per cent to HK$6513 million.

    During the year, the value of its investment properties portfolio – including property under development and properties in mainland China acquired during the year – continued to improve, reaching $160,672 million, an increase of 16.1 per cent.

    “The past 10 years have seen the transformation of Link from being a passive manager of a portfolio of legacy assets to becoming an innovative and world-class real-estate investor and manager,” says the group.

    An active and productive financial year saw the group capitalise on high-potential investment opportunities, and it also launched its new brand, in development for two years.

    It was also an important year for improving its portfolio, refining tenant mix and enhancing properties in Hong Kong, disposing of non-core properties and adding two properties in mainland China.

    “The management of our retail and car park facilities has evolved to be our strength and expertise,” says the group. “Through scalable innovation, we continue to leverage on this competitive advantage. This strategy is supported by close monitoring and analysis of changes in district demographics and shopper preferences.”

    Retail growth

    Despite a challenging economic environment in Hong Kong, the group’s retail portfolio showed resilience. There was growth in nearly all areas of retail through the group’s leasing strategy to attract more productive tenants, especially in the food and beverage sector, and to cut down large shops into smaller ones.

    Occupancy rate for the portfolio reached 96 per cent, with a record 6.7 per cent year-on-year retail rental growth.

    Link segmented its Hong Kong portfolio into three groups – Destination, Community and Neighbourhood – for management and marketing tailored to different types of tenants and shoppers. Destination shopping centres contributed to 17.1 per cent of the portfolio’s retail rentals.

    During the year, the group acquired EC Mall in Beijing and Corporate Avenue 1 & 2 in Shanghai. In Zhongguancun, the “Silicon Valley of China”, EC Mall offers mass-market retail products, and reached 100 per cent occupancy by the end of the financial year.

    In February, the group acquired 700 Nathan Road in Mong Kok through a government tender. With its location and catchment, the property will be converted into a retail podium and tower.

    Five asset-enhancement projects were also completed during the year: Tsing Yi Commercial Complex, Temple Mall North, Long Ping Commercial Centre, Wo Che Plaza and Tin Shing Shopping Centre.

    Temple Mall North (previously Lung Cheung Plaza) in Wong Tai Sin was rebranded and upgraded to offer more space and shops. The atrium was revamped to cater for marketing activities.

    Also rebranded was Wong Tai Sin Plaza, connected to Temple Mall North by a footbridge, as Temple Mall South. The two shopping centres are now run as one mall.

    Given changes in demographics from new residential projects nearby, Tsing Yi Commercial Complex and Long Ping Commercial Centre were also improved, and Tin Shing Shopping Centre has been reconfigured with its fresh market repositioned as a regional fresh market.

    Already the group has 11 enhancement projects in progress with another eight to start, and more than 16 other projects undergoing review.

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  • 759 Store Hong Kong closes four shops

    Just three months ago Hong Kong supermarket retail concept 759 Stores was boasting a 48 per cent increase in sales and the opening of 57 new shops last financial year.

    This month the chain says it will close four Hong Kong stores citing the lacklustre retail climate in Hong Kong.

    The four stores are all located in shopping centres owned by The Link REIT which according to 759 Stores has refused to grant rent reductions during negotiations over lease renewals.

    759 Store Hong Kong, the trading brand of listed business CEC International Holdings, positions itself as in between convenience stores and supermarkets, its primary point of difference its ‘self-import model’ of stock and uniform margins.

    Its 759 Store and 759 Supermarket concepts have evolved since the brand’s launch in 2010 from just selling sweets and snacks into a broader range of low margin, high turnover lines across many categories, including rice and grain, non-staple food, frozen food, alcohol, pet snacks, household goods, kitchenware, household electrical appliances, personal care supplies, cosmetics, supplies for babies, toys, novelties and accessories.

    Now CEC is planning to further diversify from its core snack and beauty products businesses, seeking a Chinese medicine license allowing it to sell packaged traditional soup in 100 of its stores.

    There are 260 759 branded shops across Hong Kong. Some of these will be expanded from the smaller store model into larger supermarkets, according to a report in today’s Hong Kong Economic Journal, which quotes 759 Stores chairman Lam Wai-chun.

    Lam said the company’s online business has already broken even and on Singles Day the company sold a record $20 million of products.

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