21 January, 2012
Legal News & Analysis – Hong Kong – Corporate/M&A
Baker & McKenzie is advising ARA Asset Management (Fortune)
Limited, as manager of Fortune Real Estate Investment Trust (“Fortune REIT”), on its proposed acquisition of two retail properties in Hong Kong, namely commercial portions of Belvedere Garden (located in Tsuen Wan, Kowloon) and Provident Centre (located in North Point, Hong Kong Island) for a total consideration of HK$1.9 billion. Baker & McKenzie is also advising Fortune REIT on a new loan facility of HK$1.4 billion that will be used to partly fund the acquisition.
The Baker & McKenzie team was led by partner Milton Cheng, co-leader of the Firm’s Corporate practice in Hong Kong/China and head of the Hong Kong REIT practice, who advised on corporate and regulatory aspects, and Debbie Cheung, partner in the real estate group in Hong Kong who advised on property aspects.
They were supported by a team of lawyers from the Corporate, Property, Finance and Tax groups.
Commenting on the transaction, Milton Cheng said, “We are delighted to be able to assist Fortune REIT, our long-standing client, on its continued growth and development. Given Fortune REIT’s status as the only REIT that is dual-listed in Hong Kong and Singapore, the deal was structured and executed with both Hong Kong and Singapore regulatory requirements and processes in mind, and required close coordination with the regulators and advisers in both jurisdictions.”
Fortune REIT currently holds a portfolio of fourteen retail properties in Hong Kong, spread across Kowloon and the New Territories, comprising approximately 2.0 million square feet of retail space and 1,660 car parking lots. They house tenants from diverse trade sectors such as supermarkets, food and beverage outlets, banks, real estate agencies and education providers. Fortune REIT was listed on the Singapore Exchange Securities Trading Limited and The Stock Exchange of Hong Kong Limited on 12 August 2003 and 20 April 2010 respectively.
Baker & McKenzie’s Asia-Pacific REIT Group has been at the forefront of ground-breaking REIT transactions in Asia. The team has been involved in almost all of the significant transactions to date involving REITs listed or with assets in Hong Kong – including Fortune REIT’s dual primary listing in Hong Kong by way of introduction; Fortune REIT’s IPO and follow-on acquisitions; Hui Xian REIT’s IPO, being the first RMB denominated REIT to be listed in Hong Kong; Prosperity REIT’s IPO and follow-on acquisitions; Champion REIT’s IPO and follow-on acquisitions; GZI REIT’s IPO; Sunlight REIT’s IPO; RREEF China Commercial Trust’s IPO; Regal REIT’s follow-on acquisitions and The Link REIT’s medium-term note programme and more recently its first and second property acquisitions in Hong Kong.
The team has also advised on numerous other significant REIT-related deals in the Asia-Pacific – Prospect REIT Investment Corporation on its merger with Japan Rental Housing Investments Inc., Tower REIT’s IPO, Fubon No. 1 REIT’s and Fubon No. 2 REIT’s IPOs, MacarthurCook Industrial REIT’s IPO, Tokyo Growth J-REIT’s IPO, ARA Asset Management’s IPO, YTL Corporation’s acquisition of interests in Macquarie Prime REIT (now known as Starhill Global REIT) and Starhill Global REIT’s first acquisition in Australia.
For further information, please contact:
Jamie Kar, Senior Public Relations Coordinator, Baker & Mckenzie