The Link Real Estate Investment Trust (0823.HK) is testing the waters of a move into private commercial real estate, selling off an initial five shopping arcades that make up less than 1 percent of its property portfolio, Apple Daily reported Monday, citing unnamed sources close to the REIT.
The Link could put more shopping malls up for sale if the community endorses the move, those sources added.
The five shopping arcades on the block are the Wah Kwai Shopping Centre in Aberdeen, the Tung Hei Court shopping centre in Shau Kei Wan, the Po Hei Court shopping centre in Sham Shui Po, the Hing Tin Commercial Centre in Lam Tin and the Kwai Hing Shopping Centre near the Kwai Hing MTR station. Tenders will be announced on May 15.
Since its listing in 2005, The Link has been revamping shopping arcades and optimizing tenant portfolios to increase rental income and investment return. It has completed some 30 projects, with its assets worth HK$95.3 billion as of the end of 2013.
Industry sources said the asset quality of the shopping arcades for sale is not very high as all are relatively old, with four that have never been revamped.
One of the attractions, however, is that the malls are affordable, at between HK$5,094 and HK$10,241 per square foot in terms of rentable space, the report said.
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