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• Link acquires the remaining 50% interest in Shanghai Qibao Vanke Plaza for RMB2,383.8 million/billion (HK$2,590.8 million), becoming the sole owner of the sizable and high-quality regional mall
• CEO says the acquisition will benefit Link by taking management control of the competitive asset with long-term growth potential

Link Asset Management Limited (Link), the manager of Link Real Estate Investment Trust (Link REIT, Hong Kong stock code: 823) announced today (Friday) that it has agreed to acquire the remaining 50% interest in Qibao Vanke Plaza in Shanghai for RMB2,383.8 million. It is based on the agreed property value of RMB5,200 million, subject to a sell-down adjustment (if any).

Link acquired an initial 50% interest in Qibao Vanke Plaza in April 2021. Upon completion of the present transaction, Link will become the sole owner of the property.

Link’s Chief Executive Officer George Hongchoy said:

“We are pleased that our joint venture partner Vanke agreed to let us take management control of this sizable and high-quality property which is yield accretive and has long-term growth potential. Being the property’s co-owner since 2021, Link’s takeover will provide tenants with business continuity and clarity.

“Going forward, we are not only committed to providing mall consumers with pleasant experience and vibrant community life but will also continue to explore different asset strategy options to enhance the value of the property, including introducing like-minded strategic partners.”

Link intends to hold the property as a long-term investment. If any equity of the property is transferred to a third party as a result of Link’s introduction of strategic partners within the 12 months immediately following Link’s takeover, Link will share with Vanke part of the gains from the relevant transaction according to a pre-set formula.

Qibao Vanke Plaza is located at Qibao Town, Minhang District, the second most populous administrative district in Shanghai. The property is a 5-storey shopping mall with 3-storey basement allocated for both shopping mall and car park, providing total gross retail area of 148,853 square metres, and a car park with 1,477 parking spaces. The sizable and high-quality regional mall recovered quickly from the lagging-effect of the COVID-19. Supported by a high quality and well-diversified tenant base, the mall has maintained a high and stable occupancy of approximately 95%. The property recorded a remarkable rental reversion of 11.2% in 2023 and monthly passing income of RMB40.6 million as of 31 January 2024. The mall’s annual footfall for 2023 was 21.5 million, about eight times the permanent population of Minhang District and 80 times that of Qibao Town. The mall’s footfall was 11% and 45% higher from that of 2021 and 2022 respectively. As of 31 January 2024, the appraised property value is RMB7,060 million.

As a transit-oriented development, the property benefits from its direct metro connection and a pipeline of transport infrastructure and development projects underway. The property is directly connected to the Qibao metro station, which will become an interchange station of the existing Metro Line No. 9 and the upcoming Jiamin Line. The property also serves the population within a five-kilometre radius from the Hongqiao Transportation Hub, Caohejing Hi-tech Park and Qibao Eco Business Park, as well as the upcoming Airport Connection Line.

Shanghai recorded a strong year-on-year retail sales growth of 12.6% in 2023, according to Shanghai Municipal Bureau of Statistics. This compared to an annual growth of 7.2% in 2023 national retail sales of consumer goods announced by the National Bureau of Statistics of China.

Link will fund the investment with its internal resources. Upon completion, the pro-forma adjusted ratio of net debt to total assets of Link is anticipated to change from approximately 19.3% to 20.4% . [Note] Allocation to Mainland China in Link’s portfolio will increase from 13.2% to 14.4%.

Following the completion of the transaction, the existing retail manager will be retained for a 6-month period to ensure smooth integration, subsequent which Link will take over its operations and the mall will be rebranded in due course.

A regulatory announcement about the acquisition are attached.

Note:

When further subtracting Link's cash and bank balances from gross debt (assuming Link to fully utilise its residual cash resources after the Acquisition to pay its debt), the pro-forma adjusted ratio of net debt to total assets of Link is anticipated to change from approximately 19.3% to 20.4%.

High-resolution pictures can be downloaded here.

For more information about Link’s Mainland China property portfolio, please visit: https://www.linkreitchina.com/en/home/

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About Link

Link Real Estate Investment Trust (Hong Kong stock code: 823) is the largest REIT in Asia by market capitalisation. It is managed by Link Asset Management Limited, a leading real estate investor and asset manager in the world. Since its listing in 2005 as the first REIT in Hong Kong, Link REIT has been 100% held by public and institutional investors. It is a constituent of the Hong Kong securities market benchmark Hang Seng Index, as well as a component of the Dow Jones Sustainability Asia Pacific Index, the FTSE4Good Index Series and the Hang Seng Corporate Sustainability Index. From its home in Hong Kong, Link Asset Management Limited owns and manages a diversified portfolio including retail facilities, car parks, offices and logistics assets spanning from China’s Beijing, Greater Bay Area (Hong Kong, Guangzhou and Shenzhen), and Yangtze River Delta centred around Shanghai, to Singapore, Australia’s Sydney and Melbourne and the UK’s London. Link Asset Management Limited seeks to extend its portfolio growth trajectory and grasp expansion opportunities in different markets in pursuit of sustainable growth.

For details, please visit https://www.linkreit.com.