HK$5.85 billion bank loans to pay the balance of the Placement Units
Hong Kong's Wen Wei Po News (Reporter Leung Yuk Cum) Lapse a half of years,Fortune REIT (0778)yesterday signed a non-binding memorandum of understanding with largest shareholder of the CKH Group (0001),invest $5.849 billion HKD acquisition of more than 15 years old Tin Shui Wai
Kingswood Ginza,it cause the Fortune REIT held by the 2.45 million feet of retail space increased to over three million feet,the purchase price of $5.085 billion HKD in debt financing to pay,in addition to $7.46 million HKD raised through placement of units.Market sources pointed out that there will be $6.74 to $6.92 HKD per unit placing an independent third party,representing the closing price before the suspension yesterday $7.12,a discount of 2.8 to 5.3%,the transaction is expected to be completed on September 30 this year.
Fortune Real Estate Investment Trust Chief Executive Officer Chao Yu in a conference ponted out that as Tin Shui Wai district has a population of 280,000 and is still growing,with immediate enhance returns,also increase dividend payout ratio,she noted,pending completion of the acquisition,Kingswood Ginza will become the largest shopping malls under Fortune,and will carry out renovation and asset enhancement,such as the subdivision of existing large floor tenants for renting,target return of 15%, but did not implement the renovation investment and rent increases,but said the rent increase will be more moderate for the people's livelihood,tenant mix will first meet local people first in the future,supplemented attract mainland visitors.
Accounted into the Financing,liabilities ratio rose to 34.5%
For this price reached $8,800 HKD per square foot,compared to Hui Fu Hui and Belvedere's of $ 5,000 per square foot which recorded a year and a half ago high,she said, mainly because of the location and Ft Rent different,the former Ft Rent $27.4 hkD,the latter acquired when sq.ft Rent less than $ 20,the rate of return are also different.
She pointed out that the purchase price paid $5.085 billion HKD paid in debt financing,the main considerations are still on the low interest rate environment,and yesterday with DBS Bank and Standard Chartered Bank issued an aggregate principal amount of up to $5.227 billion HKD term loan attorney,higher than the H +1.48% mixed spreads, and calculated on 3-5 Repayment during the year,and some will be use the property of Metro Town and / or Kingswood Ginza as collateral.Included in this financing,Fortune REIT's gearing ratio from 20.9% to 34.5%,still meets Singapore and Hong Kong real estate investment trusts Code requires borrowing limit.Also with DBS Bank Ltd, DBS Asia Finance,Standard Chartered Securities (Singapore) Pte Ltd and Standard Chartered Securities entered into a placing agreement to an independent third party placing new units,raising about $7.64 billion HKD.
After the refurbished reorganization,the rental return will be higher
Kingston Securities Research Department Executive Director Wong De Kei said,as fot the example of Kingswood Ginza shopping malls,this acquisition price is still reasonable,taking into account the existing rent,rate of return of 3.76%,due TSW spending power is not weak,but the mall less,this mall also has plasticity as long as the upgrade of assets,a change of tenant mix, further enhance the level of rent,the rate of return will be higher.
Kingswood Ginza include 1 and 2 period,as well as other retail,kindergartens,parking space and the scope of its subsidiaries (including the loading area and exterior) and retain part of the total floor 665,244 feet, 622 parking spaces,there are currently 206 tenants, $27.4 HKD monthly rent per square foot,the occupancy rate was 95.5%,as of June 30 this year,six months ended net property income $110,400,000 HKD,as projected rate of return of 3.76%.
Not included in the Kingswood Ginza, Fortune REIT currently holds 16 shopping malls,including the area of about 2.45 million feet of retail
space and 1,984 parking spaces,all from within major shareholders Cheung Department stores. The retail properties are Fortune City, Ma On Shan Plaza,Metro Town,Fortune Metropolis,Belvedere Square,Waldorf Avenue,Caribbean Square,and Fu Hui,Jubilee Square,Smartland,Tsing Yi Square,Ying Hui Hui,City Square,Hampton Loft,Lido Avenue and Rhine Avenue.
