The Hong Kong Housing Authority plans to sell the territory’s first real estate investment trust (REIT) to be issued since the passing of new regulations allowing the securities last year.
Facing a cash squeeze because the government no longer allows it to sell housing, the Housing Authority is planning to sell 130 shopping malls (around 11% of the city’s retail space), and around 100,000, or 60%, of the city’s car parking spaces in a deal that analysts expect to be worth some $2.5 billion.
Leung Chin-man, Hong Kong's permanent secretary for Housing, told Reuters on the sidelines of a property conference in Singapore that the authority hoped to launch a REIT around the end of this year or the beginning of next year.
"This will be a milestone in the development of a real estate financial market," Leung was quoted as announcing.
The REIT market in Hong Kong has struggled to get off the ground since new rules were introduced in 2003, which analysts have attributed mainly to a lack of tax incentives and rules prohibiting REIT investment overseas.
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