Link acquires 100% stake in two institutional grade car parks / auto service centers and crumbling buildings for $ 5,820 million
The acquisition is in line with Link’s strategy to invest in yield-generating and income-generating properties with long-term growth potential
Both properties are fully leased to Zung Fu Company Limited, Mercedes-Benz’s exclusive car dealership in Hong Kong.
Link Asset Management Limited, (Link), the manager of Link Real Estate Investment Trust, (Link REIT, stock code: 823) announced today (Wednesday) that it has agreed to acquire a 100% stake in two institutional quality car parks / service centers. and declining properties at Chai Wan and Hung Hom for a total of $ 5,820 million, which represents a discount of approximately 4.3% from the total estimated value of the property of $ 6,081 million. until October 22, 2021.
“Our team has tirelessly explored suitable investment opportunities in Hong Kong and we are pleased to have completed the acquisition of the assets, which are strategically located in the urban areas of the city. Occupied by an established tenant, we are convinced that the acquisition will bring us stable income with a steady increase in rents. Although retail remains our primary focus, we are gradually adding other asset classes with growth potential to improve the composition of our portfolio and strengthen the resilience and productivity of our portfolio. ”
The property at Chai Wan is a nine story building with panoramic sea views and a gross floor area (gross floor area) of approximately 438,351 square feet (sf) which has been reallocated to a 4S (1) Full-service building housing a car showroom, car maintenance and repair shops, garages and ancillary offices, as well as a 45-space car park. On the other hand, the Hung Hom property is a 13-story mixed-use parking building with a total area of approximately 421,401 square feet which has also been reallocated to a full-service 4S building housing a showroom. automobile, car maintenance and repair shops. , as well as a car park with 932 private and public parking spaces. While the active Chai Wan offers guests a unique experience, the Hung Hom building is conveniently located within a three-minute walk from the Whampoa MTR station.
Once the sales and purchase contracts are concluded, Link will enter into the lease and relocation agreement with Zung Fu Company Limited, a well-established and reputable car dealership of Mercedes-Benz in Hong Kong, for a fixed initial term. five years and three optional three-year periods thereafter for each property. The main leases will generate a stable cash flow, with an annual rental increase of 4% structured within each term of the leases.
Link will fully fund the acquisition through its own cash resources and credit facilities. Upon completion of the work, Link’s debt-to-total assets ratio will drop to 21.6% (2) at 23.6%, based on its consolidated financial position as of September 30, 2021.
The transaction is expected to be finalized by December 31, 2021.
More details on the properties are available in the regulatory announcement and presentation.
High resolution images can be downloaded here.
4S refers to the sale, service, supply of spare parts and inquiries (customer feedback) in relation to a car dealership.
After adjusting for the impact of the interim dividend declared on November 10, 2021, the acquisition of a 75% interest in two recently developed modern logistics assets in Guangdong province (completed on October 27, 2021), and the acquisition 50% interest in the central Sydney business district retail portfolio (announced November 7, 2021).
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About the link
Link Real Estate Investment Trust (Hong Kong Stock Code: 823), operated by Link Asset Management Limited, is one of the world’s leading retail-oriented REITs. Listed in 2005 as the first REIT in Hong Kong, Link is 100% owned by public and institutional investors and is included in the Hang Seng Index. From its headquarters in Hong Kong, Link manages a diverse portfolio comprising retail, parking and office space spanning Hong Kong, Beijing, Guangzhou, Shanghai, Shenzhen, London and Sydney. Link seeks to extend the growth trajectory of its portfolio and to seize expansion opportunities in different markets in pursuit of our medium term objective of Vision 2025. For more details, please visit https://www.linkreit.com/.