Link Asset Management Limited, (Link) the manager of Link Real Estate Investment Trust, (Link REIT, stock code: 823) announced today (Sunday) that it has agreed to acquire 50% interests in the three leading retail assets in Australia, namely Queen Victoria Building (QVB), The Galeries and The Strand Arcade (together “the portfolio”), at a total consideration of AUD538.2 million (HK$3,119.6 million)(1).
Nicholas Allen, Chairman, said:
“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.”
George Hongchoy, Chief Executive Officer, said:
“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.”
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. 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. The Strand Arcade, which is also a heritage-listed retail arcade, aims to offer a unique tenant mix for domestic consumers, while the Galeries is positioned as a lifestyle and cultural destination for fashion, art and dining.
The portfolio possesses strong productivity in terms of total moving annual turnover per square metre with the Strand Arcade and QVB being ranked first and second in Australia and the Galeries ranked fourth in specialty(2). 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.
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.
A regulatory announcement and presentation about the acquisition is attached.
High-resolution pictures can be downloaded here.
(1): Based on the Bloomberg exchange rate (AUD 1: HKD5.7964) quoted as at 3 November 2021.
(2): According to Shopping Centre News “CBD Guns” published in 2020.
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Link Real Estate Investment Trust (Hong Kong stock code: 823), managed by Link Asset Management Limited, is a leading retail-focused REIT in the world. Listed in 2005 as the first REIT in Hong Kong, Link has been 100% held by public and institutional investors and is a Hang Seng Index constituent stock. From its home in Hong Kong, Link manages a diversified portfolio including retail facilities, car parks and offices spanning Hong Kong, Beijing, Guangzhou, Shanghai, Shenzhen, London and Sydney. Link seeks to extend its portfolio growth trajectory and grasp expansion opportunities in different markets in pursuit of our medium-term target Vision 2025. For details, please visit https://www.linkreit.com/.