A consortium led by Gaw Capital and including Goldman Sachs has acquired 17 shopping centres from Hong Kong’s Link Real Estate Investment Trust (REIT) for HKD23bn (€2.29bn).
Link REIT offered the portfolio in Hong Kong for sale as part of a strategic review of the trust, the largest retail REIT in Asia, with assets totalling almost HKD200bn.
In a statement, Link REIT said the strategic review showed capital recycling as the best approach to create value for unitholders.
It said the sale price reflected a premium of about 52% to the appraised value of the portfolio as of September 30, and would generate a net gain of about HK$7.4bn to the trust.
The shopping centres are located in Kowloon and the New Territories.
George Hongchoy, chief executive of Link Asset Management, the manager of Link REIT, said a sizeable portfolio of such high-quality retail assets was hard to come by in Asia.
The Gaw consortium edged out Blackstone which was one of the two finalists for the portfolio.
The sale attracted overwhelming interest from international investors, including global and regional private equity funds, sovereign wealth funds and local investors, he said.
“The competitive bids and final sale price signify a vote of confidence in Hong Kong’s economy and retail sector, while underscoring Link’s capability in managing and enhancing assets,” Hongchoy added.
Goodwin Gaw, chairman and managing principal of Gaw Capital Partners, said: “We and our partners strongly believe in Hong Kong’s future.”
Link REIT has done “an excellent job” he said in upgrading and maintaining the centres which will continue to serve important functions in the community.
“We hope to utilise our experience to evolve these malls into refreshed and renewed centres of local life, and look forward to working with the community to make their neighbourhoods better homes.”
Following disposal of the 17 properties, Link will have about 90% of its assets in Hong Kong and 10% in Mainland China, in total valued at about HKD175bn.
Proceeds of the sale will be used for new investments in Hong Kong and first-tier cities in mainland China, general working capital and to repay debt.
It is the largest deal by the trust since it was floated in 2004 to own more than 125 shopping centres in public housing estates across Hong Kong.
Over the past three years, it has sold 28 of its shopping centres in public housing estates for HKD11.96bn.
The latest transaction is expected to close on 28 February 2018.