On Wednesday (28 Dec), Hong Kong-listed Link Real Estate Investment Trust (REIT) announced they are buying retail space in Singapore.
This includes the acquisition of Jurong Point mall and Swing By @ Thomson Plaza.
Source: Wikipedia
The deal is expected to be completed on 31 Mar 2023 upon which Link REIT will be among the top 10 retail asset owners in Singapore.
Link REIT will soon be acquiring Jurong Point and Swing By @ Thomson Plaza, which occupies level 1 and 3 in Thomson Plaza.
Source: Link
The S$2.16 billion deal with NTUC unit Mercatus Co-operative also includes a 10-year asset and property management service agreement for AMK Hub.
However, the neighbourhood mall will remain under Mercatus’ ownership.
The purchase will be done through cash and debt. Link is also in discussions with investors and is open to bringing in capital partners.
News of these acquisitions first emerged in November when Reuters reported that Link REIT was the frontrunner to buy assets from Mercatus, reported Channel NewsAsia (CNA).
It was reportedly said that this will be Southeast Asia’s biggest real estate transaction of the year.
This is Link REIT’s first foray into Singapore.
In their statement, Link’s chairman Nicholas Allen said the acquisition is an exciting opportunity for them to build their presence in Singapore.
He said Singapore was “a robust economy with domestic price stability conducive to sustained growth”.
The deal is also in line with their growth strategy to diversity and improve their portfolio mix across locations.
CEO George Hongchoy also said these are important strategic investments for Link.
The transaction allows Link to build a dedicated team in Singapore and provides a base for them to expand further into other asset classes and strategies in the Asia Pacific region.
Link REIT has a market value of S$20.7 billion. They have long been looking to purchase Singapore assets to diversity their portfolio.
According to Link, it is poised to be among the top 10 retail asset owners in Singapore upon completion of the deal.
This covers a catchment of almost 10% of Singapore’s population.
With AMK Hub included in the transaction, Link will be the sixth largest shopping centre operator.
Source: Mercatus
The Straits Times (ST) reported that Jurong Point has a net lettable area of 720,000 sq ft. The mall also has tenants like FairPrice Xtra, Kopitiam, and Don Don Donki.
As for Swing By @ Thomson Plaza, the first and third storey has a net lettable area of 110,000 sq ft. In total, it has about 60 tenants.
Mercatus deputy chairman and Group CEO of NTUC Enterprise Mr Seah Kian Peng said this divestment allows them to unlock some value and redeploy capital to other areas.
He specifies that they can then make a difference in the lives of families in Singapore in a more “direct and meaningful way”.
This could include scaling services in healthcare and education.
Mr Seah also expressed appreciation that Link Asset Management was willing to retain talent and work with Mercatus’ employees.
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Featured image adapted from Wikipedia and Link.
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