Link Asset Management Limited (Link), the manager of Link Real Estate Investment Trust (Link REIT; Hong Kong stock code: 823), announced today (Thursday) that it has agreed to acquire a 100% interest in a prime logistics portfolio in the affluent Yangtze River Delta (YRD) which consists of three well-located modern warehouses at a total consideration of RMB 947 million1 (approximately HK$1,102 million).
The acquisition price is based on the agreed property value of RMB 1,106 million, which represents a discount of 2% to the appraised property value of RMB 1,128 million as at the valuation date. The acquisition is subject to the approval of the shareholders of the seller group, Fujian Dongbai Group Co. Limited (Fujian Dongbai; Shanghai stock code: 600693) at their general meeting expected to be held in May 2022.
George Hongchoy, Link’s Chief Executive Officer, said:
“This acquisition of a top-quality logistics portfolio allows us to gain a footprint in a highly sought-after logistics hub in Mainland China and is immediately yield accretive. The limited supply of world-class modern warehouses at prime locations presents attractive upside potential with the continued rise of e-commerce and demand for modern logistics services. Together with the logistics assets we acquired last October in the Greater Bay Area, we are set to capture the robust growth momentum of this budding industry.”
Located in the well-established logistics hubs in the YRD, the portfolio consists of three high-quality modern warehouses in Jiaxing, Zhejiang Province and Changshu, a county-level city under the jurisdiction of Suzhou, Jiangsu province. With excellent connectivity in the Greater Shanghai area through artery expressways, both Jiaxing and Changshu are satellite cities of Shanghai, within its 1.5 hour economic circle and strategically located to serve surging demand from third-party logistics (3PL), e-commerce and the consumer product sector as regional distribution centres.
The three logistics assets cover a total gross floor area of 192,144 square metres with total lettable area of 188,605 square metres. The assets in Jiaxing and Changshu South are in operation and fully leased to leading 3PL, e-commerce and manufacturing companies in Mainland China. The Changshu North asset is under the final stage of construction and is expected to complete in May 2022 with positive pre-leasing progress.
Upon completion of the acquisition, Fujian Dongbai, seller group of the portfolio will remain as the operations manager of these three assets.
Link will fully fund the acquisition through its own cash resources and existing debt facilities. The transaction is expected to complete in July 2022, after the construction of Changshu North asset completes.
More details of the properties are available in the presentation.2
High-resolution pictures can be downloaded here.
- The total consideration is determined based on the agreed property value of RMB1,106 million minus liabilities, and it is subject to certain customary adjustments at completion.
- The total consideration for the acquisition is less than 1% of gross asset value of Link REIT and considered immaterial to Link. As such, no regulatory announcement has been made by Link pursuant to 10.4(ga) of the REIT Code.
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 owns and manages a diversified portfolio including retail facilities, car parks, offices and logistics assets spanning China’s Greater Bay Area (Hong Kong, Guangzhou and Shenzhen), Beijing and Shanghai, the UK’s London and Australia’s Sydney. Link seeks to extend its portfolio growth trajectory and grasp expansion opportunities in different markets in pursuit of its medium-term target Vision 2025.
For details, please visit https://www.linkreit.com.