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Hong Kong’s Fortune Reit to buy Laguna Plaza
Fortune Real Estate Investment Trust (Fortune Reit), through a wholly-owned subsidiary, will acquire Laguna Plaza in Kwun Tong, Hong Kong for HK$1.918 billion.
The Asset 8 Dec 2014
Fortune Real Estate Investment Trust (Fortune Reit), through a wholly-owned subsidiary, will acquire Laguna Plaza in Kwun Tong, Hong Kong for HK$1.918 billion. The purchase price represents a 7.8% discount to the valuation conducted by an independent valuer, with a yield of 4.3%. This marks Fortune REIT’s first-ever acquisition from an independent third party.
 
The purchase will be fully funded by debt and the gearing ratio is expected to increase to 33.9%. Upon completion of the acquisition, Fortune Reit will hold a portfolio of 18 private housing estate retail properties with a total gross rentable area of 3.27 million square feet. Completion is expected to take place on January 9 2015.
 
Laguna Plaza has a gross rentable area of 163,203 sq.ft. and 150 car parking lots. As at October 31 2014, the committed occupancy was 96.7%.
 
Located in Kwun Tong, in the heart of Kowloon East, Laguna Plaza is situated within the large scale private housing estate, Laguna City. It benefits from an immediate large residential catchment of 8,000 units within Laguna City and another 4,000 units in Sceneway Garden. Built in 1991 as the major commercial component of Laguna City, it is a five-minute walk from the Lam Tin MTR station through a covered footbridge and walkway. As at October 31 2014, the property had an appraised value of HK$2.080 billion by Jones Lang LaSalle.
 
Anthony Ang, chief executive officer of Fortune Reit, said, “Acquiring quality assets is one of the key growth strategies of Fortune Reit and the acquisition once again proves our ability in identifying an ideal target to expand our portfolio of retail malls. The manager is positive that the vibrant transformation of the Kowloon East area into a new CBD can bring further growth prospects for this property. On the other hand, leveraging our robust AEI track record and the potential synergies of the acquisition with our existing portfolio, we are confident that the full growth potential of Laguna Plaza will be maximized.”

 

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