Link REIT buys 50% interest in Shanghai shopping mall for $429m

Link REIT buys 50% interest in Shanghai shopping mall for $429m
Shanghai Qibao Vanke Plaza

Hong Kong-listed Link Real Estate Investment Trust (Link REIT) announced Wednesday that it has agreed to acquire 50% interest in Qibao Vanke Plaza, a shopping mall in Shanghai, for RMB 2,772 million (HK$3,325 million, appr.US$429m).

It is based on the agreed property value of RMB6,400 million, which represents a discount of 2.7% to the appraised property value of RMB6,580 million as at 31 December 2020, said Link REIT.

“The acquisition is in line with Link’s investment strategy to invest in yield-accretive and income-producing real estate which has potential for long-term growth. Upon completion, the property will be immediately yielding, with strong growth potential,” said George Hongchoy, Link’s Chief Executive Officer.

“Shanghai has the fastest retail recovery from COVID-19 among the four Tier 1 Cities in Mainland China. Shanghai Qibao Vanke Plaza is a regional destination primely located in a mature and densely populated suburban residential area with direct connectivity to Qibao metro station. With further improvement of surrounding infrastructure, including the Jiamin Line, Airport Connection Line and Qibao Eco-Business Park, the catchment population is expected to expand even more,” he added.

Shanghai Qibao Vanke Plaza is located at Qibao Town, Minhang District in Shanghai. The property is a 5-storey commercial development with 3-storey basement, providing total gross retail area of approximately 149,000 square metres, and a car park with 1,471 parking spaces.

During COVID-19, the mid upper regional mall demonstrated its resilience with occupancy at approximately 97.8% as at end December 2020. The property, in its second leasing cycle, is well positioned to capture rental growth potential through trade mix upgrade and customisation of offerings.