Link REIT buys prime retail portfolio in Sydney for A$538.2m

Link REIT buys prime retail portfolio in Sydney for A$538.2m
Link REIT to buy 50% interests in the three retail assets in Sydney, Australia

Hong Kong-listed Link Real Estate Investment Trust (Link REIT) said it has agreed to buy 50% interests in the three retail assets in Sydney, Australia, namely Queen Victoria Building (QVB), The Galeries and The Strand Arcade (the portfolio), for A$538.2 million (HK$3,119.6 million).

Located in the CBD of Sydney, one of Australia’s most sought-after retail precincts, the portfolio has a diversified tenant base and excellent natural footfall from CBD workers, local visitors and international tourists, the company said.

Based on the valuation report carried out by Link as at 25 October 2021, the portfolio occupancy stood at 94.3%.

QVB, as a heritage-listed late-nineteenth-century building, is the second most visited site in the city after Opera House, according to the company.

“The acquisition of this prime retail portfolio is part of our Vision 2025 growth strategy to diversify and improve our portfolio mix. We are excited to have captured an opportune moment to invest in these iconic Australian retail assets,” said Nicholas Allen, Chairman.

“The rare portfolio, sitting in the heart of Sydney CBD, was offered to the market for the first time. Given the high occupancy rate filled with leading Australian and international brands, the portfolio is well-positioned to capture the retail rebound with the improving consumption sentiment in the country. Coupled with the strategic partnership with a leading retail asset manager in Australia, we believe both parties will jointly enhance the portfolio to ensure these landmark assets will deliver the best retail experience to all shoppers and unlock their long-term growth potential,” said George Hongchoy, Chief Executive Officer.

Link will fully fund the acquisition through its cash resources and debt facilities. Upon completion, Link’s ratio of debt to total assets will change from 20.1% to 21.4%, based on its consolidated financial position as at 31 March 2021.

The transaction is expected to complete in the first half of 2022.

Since 2018, the portfolio has been managed by Vicinity. After completion of the acquisition, Vicinity will continue to manage the portfolio with its specialised and experienced retail team, and Link will work closely with Vicinity as a co-owner to curate and position the portfolio dynamically to better serve the needs of shoppers and the broader community in the long run.