Link REIT buys 2 from Mercatus portfolio + secure AMK Hub management contract!
Link REIT is making a significant entry into Singapore's real estate market with its acquisition of two suburban malls from Mercatus Co-operative Ltd for S$2.16 billion ($1.6 billion), the largest real estate acquisition in the Lion city this year!
Source: Link Reit
According to its filing yesterday, Link REIT has entered into a SPA with Mercatus to acquire Jurong Point and Thomson Plaza. In addition, as part of the deal, Link REIT also get the management contract to provide property management services for AMK Hub!
Source: Link REIT
Based on Link REIT’s disclosure, the NPI entry yield is approximately 4.9%. This is actually not bad considering Jurong Point and Thomson Plaza is well-located near transportation hubs! In particular, Jurong Point sits at Boon Lay Integrated Public Transport Hub, which also includes the Boon Lay Bus Interchange and Boon Lay MRT station, which is proposed to become an interchange with the Jurong Region Line when it opens in 2027. As a fair comparison, Lendlease REIT bought JEM at an entry yield of 4% earlier this year, so it looks like Link REIT got a good deal in this off season!
The acquisition deal will be fully funded by internal cash and debt. Even so, the impact on Link REIT’s gearing is still relatively manageable, still below the 30% level and way better than most SREIT. This deal will also be immediately DPU accretive to all unitholders.
Link REIT has also hinted its intention to build a lasting presence in Singapore with more acquisitions. It seems like Link REIT is quite desperate to diversify out of China and Hong Kong, due to Hong Kong’s deteriorating status as a global financial hub with more MNCs and family office moving over to Singapore recently. Overall, I think this is a good move by Link REIT who manage to seize this rare opportunity. Such deals hardly come by due to the limited retail supply in Singapore, and I was quite surprised both Fraser and CapitaLand decided to pass this deal.
Modify on 2022-12-29 21:32
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领汇已经从低位起了20%，但是离高位还有40%距离，P/B只有0.8和大多数优良的reits 比 还是非常便宜。