Hui Xian Real Estate Investment Trust (87001.HK) is eyeing opportunities to acquire commercial properties in China’s first- and second-tier cities, a strategy which the company feels will help drive its future earnings.
The REIT is currently looking at more than 20 projects as potential acquisition targets, chief executive Tom Cheung Ling-fung told the Hong Kong Economic Journal.
The acquisition strategy is aimed at ensuring continued improvement in yields, Cheung said.
Among other initiatives, Hui Xian is planning to revamp the Chongqing Metropolitan Plaza that has just been acquired from Cheung Kong Holdings (00001.HK) and Hutchison Whampoa (00013.HK).
The 18-year-old commercial building will see a new mix of tenants after the revamp. Rental income may, however, fall in the coming two years due to the renovation work.
That said, Cheung Kong and Hutchison had given an assurance that the property will provide an income of at least 299 million yuan in the coming five years, representing a yield of 7.65 percent.
The REIT has proposed to distribute 25.67 HK cents per unit to shareholders for 2014, marking a 7.38 percent yield. The yield has improved four years in a row.
Translation by Vey Wong [Chinese version中文版]
–Contact us at [email protected]