HK’s Link REIT Looking For Commercial Property Deals In Singapore
HONG KONG – A company executive revealed that Link REIT, the biggest real estate investment trust (REIT) in Asia, is on the lookout for promising commercial property transactions in Singapore, Australia, and Japan, reported the South China Morning Post (SCMP) on Wednesday morning (28 September, SGT).
“We are always active in looking for opportunities, but we are very selective about the opportunities we do complete,” said Link REIT’s Chief Operating Officer (international) Greg Chubb.
“The new geographies in the region that we’re investigating are Australia, Singapore and Japan. We recently opened our regional office in Sydney and we’re looking at a number of different opportunities across the region. We have been very consistent in stating our interest in those markets, and we hope to grow in Australia, and potentially Singapore, potentially Japan.”
The hunt for favourable commercial property deals comes amidst a global environment of rising interest rates. Except for Japan and mainland China, all of Link REIT’s existing markets and markets it’s looking to enter have witnessed rising interest rates. This can create opportunities for investors who are planning to buy assets from sellers who may want to exit or divest their investments.
“What the current environment does provide is that there will be more opportunities for us to investigate,” noted Chubb.
“Whether we complete those opportunities, we’ll determine over time. We’ve got very thorough processes and we’ll continue to interrogate those opportunities, but probably the most important thing to know is that there will be more opportunities for us to investigate.”
At present, Link REIT has 10 overseas assets, consisting of 8 properties in Sydney as well as one each in Melbourne and London. This is in addition to the trust’s 151 properties in Hong Kong and mainland China.
As of March 2022, the overseas portfolio made up 7.8 per cent of the trust’s investments, 17.4 percent were in China, while almost 75 percent were located in Hong Kong. In the Chinese territory, Link REIT’s assets include Nan Fung Plaza and Maritime Bay, both of which are situated in Tseung Kwan O in Sai Kung district.
Moreover, Chubb disclosed that Link REIT’s will continue to focus on traditional retail, office, and industrial properties. Hong Kong will also remain as the trust’s primary market. Recently, the trust secured a 63,292 sq ft plot of land close to Anderson Road in Kwun Tong for HK$766 million (US$97.6 million).
Last November, the trust forked out A$538.2 million (US$398 million) to acquire a 50 percent stake in 3 retail properties in Australia, namely The Queen Victoria Building, the Strand Arcade and The Galeries in Sydney. Before that, Link REIT bought 2 office buildings, namely The Cabot in London and 100 Market Street in Sydney.
Peter Tyson, National Director of retail investments at Savills Australia and New Zealand, said Aussie commercial properties are a good bet amidst global uncertainty, with the Australian dollar’s weakness also likely to stimulate further interest for such assets.
“Australian commercial property has long attracted foreign investment, which is favoured by cross-border capital due to high-quality assets and a stable and transparent political, legal and macroeconomic environment,” he added.