Asia’s Largest Real Estate Investment Trust Buys Singapore Shopping Malls For $1.6 Billion.

Link REIT of Hong Kong Link REIT is venturing into Singapore by completing the S$2.16 billion ($1.6 billion) acquisition of two retail malls in Singapore’s suburb region through Mercatus Co-operative.

Link REIT announced on Wednesday that it would acquire Jurong Point and Swing By @ Thomson Plaza from the property division of NTUC Enterprise Co-operative. The transaction is scheduled to be completed by March 2023. According to the company, the acquisition will boost Link REIT into becoming one of the top 10 asset owners of retail assets in Singapore.

The transaction will also comprise the signing of a 10-year asset- and property-management agreement for another suburban shopping mall, AMK Hub, which remains under the control of Mercatus.

“Properties such as these, sizable suburban retail assets with high occupancy rates and stable rents, are traditionally tightly held and do not often come to market,” George Hongchoy, CEO of Link in an announcement. “This transaction allows us to build a dedicated team in Singapore and provides a base for Link to expand further into other asset classes and strategies in Asia Pacific.”

Shopping malls in Singapore’s suburbs have been resilient throughout the epidemic. Due to their location in the residential area and shopping options that offer essential items, malls in suburban areas attract more customers than malls designed to cater to shoppers in famous shopping districts. The average gross rents for suburban malls saw an increase of 0.7 per cent from year to year in the third quarter, compared to an 0.3 per cent drop for Orchard Road. According to Knight Frank, Orchard Road shopping strip during the same time frame.

It is situated within Jurong West, one of the most densely populated regions within Singapore; Jurong Point has Net lettable space, according to the announcement. Swing By @ Thomson Plaza is an area net lettable that is 110,000 sq ft. Link REIT said the two properties are near full occupancy and have produced an annual net profit of S$ 106 million ($78.6 million) at the end of October.

The company has stated that it will complete the purchase with money and debt while also saying it is engaged in conversations with prospective investors. It is willing to seek capital partners for the properties.

In Hong Kong in 2005, Link REIT owned a HK$234 billion ($30 billion) actual property portfolio, including car parks, shopping malls and offices. About 80% of the properties owned by Link REIT are within Hong Kong, with the remainder scattered all over mainland of China, Australia and the U.K. It has increased to become the largest REIT in Asia, with a market value of $15.4 billion at the time of writing on Wednesday.

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