Blackstone, KKR shortlisted for Link REIT’s US$2bil assets

HONG KONG: Blackstone, KKR and some Chinese investors are among potential bidders shortlisted by Link Real Estate Investment Trust (REIT) to buy some of its Hong Kong retail assets valued at about US$2bil, three sources said.

Gaw Capital Partners, a Hong Kong-based private equity real estate firm focused on Greater China and Asia, is also on the shortlist for Link REIT’s shopping centres in the Asian financial hub, sources said.

Bids for the assets are due by the end of November.

The asset sale comes against the backdrop of Chinese firms aggressively buying land in Hong Kong, one of the world’s most expensive real estate markets, gobbling up 29% of the land sold in 2015 and 2016. That trend has continued in 2017.

Link REIT, Asia’s largest REIT by market capitalisation, owned assets in Hong Kong, Beijing, Shanghai and Guangzhou as of endMarch. Its portfolio includes shopping centres, office buildings, car parks, wet markets and cooked food stalls.

Buyers of commercial real estate in Hong Kong are betting on a sustained recovery in the city’s retail economy, helped by robust local consumption and a pickup in tourist numbers.

Real estate services firm Colliers said last week it expects leasing activity in Hong Kong to pick up further and rents to start to recover in 2018. The US$2bil sale is attractive to private equity firms as the portfolio would provide stable cash flows, one of the sources said. — Reuters