Link REIT accepts HKD1.24bn in bids for 4 malls

It will boost REIT’s liquidity.

According to Moody’s, Link Real Estate Investment Trust (A2 stable) said that it had accepted bids totaling HKD1.24 billion for four Hong Kong malls that it had put up for private tender.

The total price equals a 38% premium to the properties’ appraised value as of 31 March 2014.

Here’s more from Moody’s:

The sales are credit positive because they will boost the real estate investment trust’s (REIT) liquidity and support its expansion plans inside and outside Hong Kong. Link said the sales will be completed by the end of July.

The net sales proceeds equal around 48% of Link’s cash balance of HKD2.55 billion at the end of September 2013. Link’s maintenance capex on these sold assets will be eliminated.

These benefits will outweigh the properties’ lost recurring income. The asset disposal will help Link streamline its operations and allocate its resources more effectively.

The disposed assets are among those whose value Link has had difficulty increasing.