Link REIT buys Shenzhen mall for US$982m

Hong Kong-listed Link REIT has snapped up the Centralwalk shopping centre in the heart of Shenzhen’s CBD for RMB 6.6bn (US$982m), its first deal in the tier-one city.

The five-storey retail property is located in the Futian district, known as a hub for Fortune 500 companies and multinational corporations, Link said in an announcement.

The fully-let property has 83,900 sq.m. of retail space, generating a gross monthly passing income of RMB 23.8m (US$3.5m).

The deal marks the REIT’s second transaction in the Guangdong-Hong Kong-Macao Greater Bay Area, as well as its fifth in mainland China.

“The acquisition will enable us to capture the exponential growth spurred by the high-speed rail link and the Greater Bay Area development,” said George Hongchoy, CEO of Link Asset Management, the REIT’s manager.

Centralwalk sits on top of subway lines 1 and 4, and is near the Futian China Railway High-speed station.

Commuters can travel from Futian CRH station to Hong Kong in about 14 minutes.

Link plans to upgrade the asset’s tenant and trade mixes in the coming years, with more than two thirds of the mall’s retail leases set to expire over the next three years.

“We see enormous upside potential in this asset as we will apply our expertise in asset enhancement and placemaking to attract footfall to this mall, unleashing its potential as a leisure and entertainment landmark in Shenzhen,” Hongchoy added.

Following the deal’s scheduled closing next month, Link will have about 465,000 sq.m. of retail and office space across Beijing, Shanghai, Guangzhou and Shenzhen.

Mainland Chinese assets will represent about 13.1% of the REIT’s total portfolio.

The transaction follows Link’s purchase of the 67,546 sq.m. Beijing Jingtong Roosevelt Plaza retail centre for RMB2.56bn (US$374.6m) in November last year.

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