22 Dec 2011

Link acquires Maritime Bay for HK$588.4M at 4.8% yield

HONG KONG, 22 December 2011 – The board of directors of The Link Management Limited, as the manager of The Link Real Estate Investment Trust (“The Link REIT”; Hong Kong stock code: 823), today announced that by the Sale and Purchase Agreement dated 22 December 2011, The Link REIT (through The Link Properties Limited as purchaser) agreed to acquire Great Land (HK) Limited (“Target Company”) for a consideration of HK$588.4 million, subject to adjustment by reference to current assets less current liabilities at completion. The Target Company is indirectly wholly-owned by Sino Land Company Limited and owns the retail podium on the ground floor and upper ground floor of Maritime Bay (the “Property”).
 
Maritime Bay is located at 18 Pui Shing Road, Tseung Kwan O. The Property has a gross floor area of approximately 63,466 square feet. The Property is currently fully-let, with tenant-mix covering principally services, food and beverage and supermarket.
 
Completed in 1998, the Property is part of Maritime Bay, a composite development with two blocks of residential apartments over a podium, shopping arcade and car park spaces on the ground floor and upper ground floor, and car park spaces on the basement floor. There are approximately 32 tenancies and various licenses at the Property, delivering a monthly rental income (excluding management fees) of approximately HK$2.3 million. As at 21 December 2011, the Property had an appraised value of HK$580.0 million as valued by Jones Lang LaSalle Limited, an independent property valuer, in its valuation report, with an estimated passing initial yield of approximately 4.8%. Completion of the acquisition is expected to take place in January 2012.
 
Mr George Hongchoy, Chief Executive Officer of The Link Management Limited, said, “This transaction marks our second acquisition after Nan Fung Plaza. In line with our acquisition strategy, it advances our position as a leading private sector owner and manager of retail properties in Hong Kong. By adding quality income-producing properties and driving synergies within our existing portfolio, this yield-accretive strategy represents a step up from organic growth driven by our on-going asset enhancement initiatives.”
 
“The Maritime Bay acquisition fits well with our business strategy as this centre serves mainly the non-discretionary spending needs of nearby residents. The Property is located in Hang Hau District of Tseung Kwan O. It is connected by footbridges to the Hang Hau MTR Station as well as Nan Fung Plaza and Hau Tak Shopping Centre already owned by The Link REIT. The addition of Maritime Bay into our portfolio will further consolidate The Link REIT’s foothold in the densely populated and relatively affluent Tseung Kwan O area. It also provides an opportunity to leverage on our leasing and property management capabilities for better economies of scale and stronger tenant network,” added Mr Hongchoy.
 
“We are delighted to have concluded this deal with Sino Land Company Limited, the vendor of this property and a leading and reputable developer and investor in Hong Kong. The Link REIT enjoys strong financial position and sufficient fund raising capacity to finance further acquisitions. We will continue to seek suitable acquisition opportunities to leverage on our strengths, and to provide a better shopping environment for the people of Hong Kong,” said Mr Hongchoy.
 
The acquisition will be funded from The Link REIT’s own cash resources and existing debt facilities. The acquisition is not expected to have any material impact on the financial position of The Link REIT. The payment of the consideration and the expenses will not affect the payment of The Link REIT’s interim distribution as announced in the 2011/12 interim results announcement.
 
The Link Management Limited will engage tenants, nearby residents and other stakeholders in communication to keep them informed on matters relating to the transfer of ownership of the Property.
 
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