Link REIT

For other uses, see The Link (disambiguation).
Not to be confused with Hong Kong Link.

Link Real Estate Investment Trust (Chinese: 領展房地產投資信託基金, or 領展;SEHK: 0823), previously known as The Link Real Estate Investment Trust (Chinese: 領匯房地產投資信託基金, or 領匯), managed by Link Asset Management Limited, is the first real estate investment trust in Hong Kong and currently the largest in Asia in terms of market capitalisation. It is wholly owned by private and institutional investors.

Link REIT's portfolio consists of properties with an internal floor area of approximately 11 million square feet of retail space and approximately 80,000 car park spaces, based almost entirely on the assets formerly operated by the Hong Kong Housing Authority.[1]

History

Initial public offering

IPO of The Link REIT, delayed for a year until 2005 through legal action by housing tenants worried that rents would rise, was eventually 18 times oversubscribed.[2] About 510,000 Hong Kong residents, or seven percent of the city's population, placed US$36 billion of orders while institutional investors were ready to commit US$40 billion.

The IPO's joint global coordinators were Goldman Sachs, HSBC Holdings plc, and UBS AG. JPMorgan Chase & Co. was the financial adviser to the Housing Authority.

The proposed flotation of The Link REIT by the Housing Authority was delayed when a public housing tenant, Lo Siu Lan, challenged the legality of the proposed divestment of the properties. She represented a concern among many residents of public housing that existing amenities would no longer be public and that The Link REIT would raise rents, thereby raising prices in shops, without due consideration of the public good. Some NGOs also were concerned that the reduced income of the Housing Authority would eventually lead to rent rises for public tenants.[3]

Renovation of properties

Since the listing in 2005, Link has engaged in a process of 'asset enhancement works', seeking to raise the value of the properties through upgraded physical structure, replacing low-end utility local shops with higher-paying brands and chains, enhanced 'customer service', and promotional activities. By November 2011, Link had completed a total of 23 asset enhancement projects, namely:

Acquisition of properties

In mid 2010, Link acquired the shopping mall portion of Nan Fung Plaza with parking facilities in Hang Hau, from Nan Fung Group, for a total of $117 billion.

In Late 2010, Link acquired the shopping mall portion of Maritime Shopping Centre with parking facilities in Hang Hau, from Sino Group, for a total of $58.84 billion.

In mid 2014, Link acquired The Lions Rise Mall with parking facilities in Wong Tai Sin, from Kerry Properties, for a total of $138 billion.

Link is currently negotiating with China Vanke on a possible acquisition of an 80% interest in Longgang Vanke Plaza's retail centre, street shops and car parks.

On 24 March 2015, Link announced the acquisition of Beijing EC Mall, the REIT's first purchase in mainland China, for a consideration of RMB 2.5 billion. The deal was completed on 1 April 2015.

Sale of properties

In mid-2014 The Link sold four commercial properties, to four different buyers, for a total of $1.24 billion. The properties are Hing Tin Commercial Centre (in Lam Tin), Kwai Hing Shopping Centre (Kwai Chung), the Tung Hei Court shopping centre (Shau Kei Wan), and Wah Kwai Shopping Centre (Pokfulam).[3][4]

In late 2015 The Link sold five properties, namely: Fung Wah Estate Retail and Car Park, Ka Fuk Shopping Centre, Kwong Tin Shopping Centre, Siu On Court Retail and Car Park, and Tin Wan Shopping Centre.[5]

Property development

On January 27 2015, The Link with Nan Fung Group jointly bought land lot NKIL 6512 in Kwun Tong from the land auction, for a total of $5.86 billion.[6]

Renaming

On 19 August 2015, Link officially announces the changing of its corporate names.[7]

Criticism

The Link was called a "bloodsucker" by housing estate residents after the company acquired the Housing Authority shopping centres, renovated them, and raised rents. This has led to local shops being pushed out, higher prices, and the dominance of chain stores within the estates.[8][9]

A 2012 campaign by The Link to promote "nostalgic restaurants" in its shopping centres was widely derided on social media as hypocritical. Users on Golden Forum and Facebook wrote that the company "first killed the shops, then makes money from their death" and criticised the company for only allowing chain stores in their properties.[9]

The Link cut thousands of staff, a move "fiercely criticised by unionists, who said Link Management had dishonoured a pledge to protect the welfare of its frontline workers when it took over the operation from the Housing Authority". The Link replied that "the job cuts were in line with private practice".[10]

In Tin Shui Wai, where The Link exercises a near-monopoly on commercial space, the company was criticised by local residents and Legislative Councillors in 2015-16 for planning to convert the Tin Yiu Market into a conventional shopping centre.[11] The market supplies fresh vegetables, meat, and fish to residents of the surrounding public housing estates. The next closest market is 5 to 10 minutes' walk away.

See also

References

  1. ↑ Asia's REIT Push, Forbes Magazine, 29 Sep 2006
  2. ↑ Forbes magazine, 25 Nov 2005
  3. 1 2 Cheng, Albert (13 June 2014). "Link Reit's sale of shopping centres will leave poorer residents worse off". South China Morning Post. Retrieved 14 November 2014.
  4. ↑ Sito, Peggy (22 May 2014). "Link Reit sells four malls for HK$1.24b". South China Morning Post. Retrieved 14 November 2014.
  5. ↑ "Link REIT Disposes of Five Properties Offers Exceeding Appraised Value by Over 30%". Link REIT. 27 October 2015.
  6. ↑ "Hong Kong Property Market Monitor" (PDF). Jones Lang Lasalle. February 2015.
  7. ↑ "Link Unveils New Corporate Identity - Linking People to a Brighter Future". 19 Aug 2015.
  8. ↑ Ng, Joyce; But, Joshua (7 June 2013). "'Callous' career man Victor So takes helm of Urban Renewal Authority". South China Morning Post. Retrieved 29 August 2014.
  9. 1 2 Lee, Ada (11 April 2012). "Hundreds hit out at Link Reit 'hypocrisy'". South China Morning Post. p. 3.
  10. ↑ Wu, Helen (30 May 2006). "Link Reit to shed at least 1,400 jobs. Unionists say management ignored promises to protect non-skilled workers". South China Morning Post. p. 1.
  11. ↑ "Conversion of Tin Yiu Market by Link Asset Management Limited" (PDF). Legislative Council. 7 December 2015.

External links

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