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Fortune Reit buys Hong Kong shopping mall for HK$1.9b

FORTUNE Reit is buying Laguna Plaza, a shopping mall in Hong Kong, for HK$1.9 billion (S$324.2 million).

Located in Kowloon, Laguna Plaza has an occupancy rate of 72.7 per cent as at Oct 31, and including new leases, a committed occupancy rate of 96.7 per cent as at the announcement date on Monday.

The property had been valued at HK$2.08 billion as at Oct 31, and was estimated to have a net property yield of 4.3 per cent.

The Reit has paid a 5 per cent deposit of HK$95.9 million upon signing of the agreement on Dec 5, and will pay the rest to the vendor, Cayman Islands-incorporated Jadeland Investment, upon completion.

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The acquisition will add value to Fortune Reit's existing portfolio as the property is located within a residential catchment area in East Kowloon with access to good public transport, and will also provide synergies with Fortune Reit's shopping malls in the area, such as Centre de Laguna, the firm said in the announcement.

Expected to be completed on Jan 9 next year, it will be funded through the drawing down of HK$1.6 billion from a new facility, as well as existing ones. This would raise the Reit's gearing from 29.9 per cent to 33.9 per cent.

Fortune Reit will also pay the manager HK$19.2 million in fees after the completion of the deal.

The counter last traded at HK$7.56 on Friday.