（By Liang Yueqin）
Marina Square (West) owned by Taiwan capital being changed into OUTLET caused marched against from hundreds of South Horizons citizens. Fortune Kingswood will launch questionnaire investigation to Tin Shui Wai citizens before the decision of changing part of the floor area into OUTLET, expressed by Zhao Yu who is the Vice Chief Executive Officer of Fortune REIT (0778) when accepting interview.
Zhao Yu emphasized, Fortune Kingswood which was purchased by their company in last October will mostly service local citizens, and it also will improve food and daily necessities service to tenants. Zhao Yu added, to avoid local citizens' angry about Marina Square (West) held by other owners being changed into OUTLET to attract visitors, Fortune Kingswood will launch questionnaire survey to Tin Shui Wai citizens first before the decision of changing part of the floor area into OUTLET as original plan.
Lease signed in the mall this year increased 26% temporarily.
During May Day holiday, Fortune Kingswood organized one group of mainland customers to Hong Kong for daily supplies like rice, oil, milk powder and so on, currently, lease of about half floor area of the mall will expire within this year, and it is believed the mark up of rent will ideal since rent of signed leases this year rising by about 26% while the mark up of rent in last year was about 20%, also they planed to spend HKD 150 million to HKD 200 million for the appreciation in asset value of the mall in following 2-3 years, first stage renovation of which will start next year focusing on air conditioning and other facilities, pointed by Zhao Guoxiong.
Deborah English Kindergarten and International Play School failed to renew the lease because the price they offer had large gab to market level.
As for Deborah English Kindergarten and International Play School in Fortune Kingswood had presented a petition for renewal to Cheung Kong Center in earlier, Zhao Guoxiong reiterated, they did not reach an agreement after many times of negotiation, because the rent offered by Deborah English Kindergarten and International Play School was more than 20% lower than market level, so they decided to invite other kindergarten to rent it, and they will sign the lease with Zenith Kindergarten. He said, it believed will not affect corporate image since they had clearly stated the fact.
Besides, Fortune REIT will spend HKD 80 million for the appreciation in asset value of Belvedere Square, which will be finished next year by prediction, and the estimated investment rate of return will be 15%.
They may purchase small shopping mall and no need to refinance.
Asked for new shopping mall purchasing plan, Zhao Yu said, the current debt ratio of the group is 33%, which has been to the upper limit of 35% of Singapore listing requirement, so it may not possible to purchase through borrowing. However, since the loan interest rate had been changed from Hibor + 200 points (100 points is 1%) to Hibor + 140 points, the saved interest expense is about HKD 6 million, which can be assigned to shareholders, plus with they still have some revolving loan, so the group can purchase small shopping mall and no need to refinance in following two years.
Zhao Guoxiong said, the rent mark up of their shopping malls depends on industry, such as the rent for banking and real estate agent will be higher, although Hong Kong real estate agent's transactions affected by government policy, but there has no real estate agent tenant from their mall ask for rent cutting, and the monthly rent for real estate agent is just several tens of thousands of HK dollars, so they can afford the rent if there are still three to four transactions done each month.
