Hong Kong-listed real estate giant Link Reit has approved the acquisition of two Singapore retail developments, Jurong Point and Swing By @ Thomson Plaza, from Mercatus Co-operative.
Once completed, the US$1.6 billion deal will make Link one of the top 10 retail asset owners in Singapore and the sixth largest shopping centre operator by footprints. As part of the agreement, Link will enter into a 10-year asset and property management service agreement for a third suburban retail mall, AMK Hub, which will remain under Mercatus’ ownership.
The transaction is expected to complete on March 31.
“Jurong Point and Swing By @ Thomson Plaza are important strategic investments for Link,” said George Hongchoy, CEO at Link. “Properties such as these, sizable suburban retail assets with high occupancy rates and stable rents, are traditionally tightly held and do not often come to market.”
“This transaction allows us to build a dedicated team in Singapore and provides a base for Link to expand further into other asset classes and strategies in Asia Pacific.”
According to Link, the two properties generated an annualised net property income of $79 million as of last October. The acquisition of Link Reit’s first assets in Singapore was plotted last November.
Link Reit was listed on Hong Kong Stock Exchange in 2005. Nearly three-quarters of its portfolio value is in the territory. It also has a presence in Mainland China, Australia, and the UK.
“The acquisition of Jurong Point and Swing By @ Thomson Plaza presents an exciting opportunity for Link to build its presence in Singapore, a robust economy with domestic price stability that is conducive to sustained growth,” said Nicholas Allen, chairman of Link.
“This is firmly aligned with our growth strategy to diversify and improve our portfolio mix across geographies and follows recent investments by Link in the region.”