HK's real estate investment trust Link expands in Sydney with 3 retail properties

Hong Kong's real estate investment trust Link has agreed to buy 50% interests in three retail properties from in the business district of Sydney for about HK$3.12 billion. 

The company said in a statement that it had agreed to buy three retail properties, including Queen Victoria Building in addition to its 669 car parking spaces, The Galeries, and The Strand Arcade from Ipoh Property. Upon completion, Link will hold 50% of the leasehold interests and freehold interests in the properties, and become tenant in common in equal shares with the existing co-owners. The transaction is expected to complete in the first half of 2022.  The acquisition will be funded by Link’s own cash resources and debt facilities. It added that the acquisition is not expected to have any adverse impact on the financial position of Link. 

Link said the acquisition contributes to the geographical diversification of Link’s existing portfolio and is in line with Link’s investment strategy. Upon completion, the properties will be held as a long-term investment and will expand Link’s footprint in the Australian market and drive portfolio growth.The properties are all located at prime locations in Sydney with access to a public transport network and infrastructure, walking distance from light rail, train and buses.

“The rare portfolio, sitting in the heart of Sydney CBD, was offered to the market for the first time. Given the high occupancy rate filled with leading Australian and international brands, the portfolio is well-positioned to capture the retail rebound with the improving consumption sentiment in the country. Coupled with the strategic partnership with a leading retail asset manager in Australia, we believe both parties will jointly enhance the portfolio to ensure these landmark assets will deliver the best retail experience to all shoppers and unlock their long-term growth potential," said George Hongchoy, CEO of Link. 

Moreover, each of the properties has a distinct offering of plenty of domestic and international brands popular, attracting footfall from people who live there. Link can also leverage this acquisition to establish ties with a property management company there. Lastly, Link said the acquisition is a desirable entry point into Australian retail market. 

Link has been acquiring properties in foreign markets in recent times. In June 2021, it acquired Happy Valley Shopping Mall in Guangzhou. Upon completion, Link became the sole owner of the property. According to its latest annual report, Link has 127 investment in Hong Kong, including retail spaces, offices and carparks. Meanwhile in China, it has seven retail and office spaces. As for overseas investment, it portfolio includes office buildings in London and Sydney.  Although Hong Kong's economy has been hit by the pandemic, the occupancy rate of its retail spaces was 96.8%, 0.5 percentage points higher than those of mainland China. 

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