Hong Kong Launches World’s Largest REIT IPO
by Mary Swire, Tax-News.com, Hong Kong
29 November 2004

Described as the largest single REIT (real estate investment trust) initial public offering in the world to date, the Hong Kong Housing Authority last week announced details of the Link REIT, the first to be listed in the territory.

Included in the trust are 180 of the Housing Authority's retail and car parking facilities with a total internal floor area (IFA) of around 950,000 square meters in retail space and 79,000 car park spaces, representing 13.7% of the total commercial parking spaces in Hong Kong.

Commenting on the launch, the Permanent Secretary for Housing, Planning & Lands (Housing), Mr. Leung Chin-man noted: "It is an important milestone in the development of Hong Kong real estate and financial markets as the launching of the first REIT in Hong Kong would not only help enhance the status of Hong Kong as a global financial centre, but would also bring a new dimension to the real estate market not seen before in our city.”

The REIT offering has already generated interest from international investors and reports indicate that financial services firm American International Group plans to buy HK$4.45 billion (US$573 million) worth of shares in the trust, representing an 18.8% stake.

The government has also revealed that a number of other global firms will buy into the REIT, including Bermuda-based American International Insurance, AMP Capital Investors, Capital Research and Management, Fidelity Investments Management (Hong Kong), First State Investments (Hong Kong), Henderson Global Investors, ING Clarion Real Estate Securities, Prudential Asset Management (Hong Kong), and Stichting Pensioenfonds PGGM.

The trust, which is being managed by The Link Management Limited, commences trading on the Hong Kong Stock Exchange on December 16.

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