Hong Kong trust buys Beijing mall

A Hong Kong REIT has made its first foray into mainland China, buying a Beijing mall.

The Link Real Estate Investment Trust has paid 2.5 billion yuan (US$399.7 million) for the 800,000 sqft EC Mall in Beijing’s Zhongguancun district.

“The EC Mall contributes to our strategy of long-term investment in real estate assets that are sustainable, income-producing properties,” said Link Management CEO George Hongchoy.

“With this investment, we continue to build long-term income and capital growth, while maintaining a large and diversified portfolio of real estate in Hong Kong and other jurisdictions, including the mainland.”

The seven-storey EC Mall is almost fully leased and tenants include recognised global brands including H&M, Zara, Uniqlo, Nike and Sephora. It opened in 2009.

In a statement, Link said last month’s rental income topped 13 million yuan ($2 million), with some shops achieving as much as much as 1000 yuan ($161) per sqm each month. The average monthly rent exceeds 300 yuan ($48) per sqm. Link will receive an annual yield of 6.24 per cent.

“The acquisition is a solid long-term investment opportunity to grow our property portfolio and bring potential valuable returns to our unit holders,” Hongchoy said.

“The mall is well positioned to capitalise on the growing spending power of local residents of Zhongguancun and the greater Haidian district. We believe the company will benefit from the anticipated growth in rental and value of the property.”