Fortune REIT to buy HK properties

Fortune Real Estate Investment Trust, a property trust listed in Hong Kong and Singapore, said it will acquire two retail properties in Hong Kong for a total of HK$1.9 billion.

Fortune REIT said the purchase consideration for Belvedere Garden Property and Provident Centre Property are HK$1.25 billion and HK$650 million respectively, both at a discount to their respective independent valuations.

According to a Knight Frank valuation report, Belvedere Garden Property had an appraised value of HK$1.3 billion as at 30 September 2011, with an estimated net property yield of 5.2 per cent.

Meanwhile, Provident Centre Property is valued at HK$680 million, with an estimated net property yield of 4.8 per cent.

The proposed acquisition of the new properties will increase Fortune REIT’s gross rentable area by 23 per cent.

In a statement, Mr Chiu Kwok Hung, Justin, chairman of ARA Asset Management (Fortune) Limited, said: “The new properties provide Fortune REIT with an additional source of stable and growing rental income, as well as a more diversified income and tenant mix.

“With a strong asset enhancement initiatives track record of achieving a return on investment of 22 per cent at Fortune City One Plus and 73 per cent at Ma On Shan Plaza in the past two years, we are confident that there is plenty of room for enhancement of these two assets under a more efficient management and future renovation plans.”

Mr Chiu added the Trust remains positive of the outlook of Hong Kong retail market and the deals will provides unit holders with an opportunity to capitalise on growing retail demand.

The acquisition will be subject to the approval of independent unit holders at an extraordinary general meeting which is expected to be held on 19 January 2012.

Source : Channel NewsAsia – 29 Dec 2011

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