Link REIT in Guangzhou mall revampFinance | Dominique Nguy 14 Aug 2017
The Link Real Estate Investment Trust (0823) expects to generate a higher rental revenue and occupancy rate at Metropolitan Plaza after it reshuffles the tenant mix in its newly acquired shopping mall in Guangzhou.
"About 60 percent of the mall's tenancies are approaching the end of the first leasing cycle and will expire in three years. This provides us with room to refine the tenant mix," said Gary Fok Yip- sang, Link Asset Management director of asset management for China.
In April, Link REIT announced the acquisition for 4.07 billion yuan (HK$4.78 billion) of Metropolitan Plaza, which provides 88,726 square meters of retail premises. The transaction was completed in May.
As of February 28, the mall's occupancy rate stood at 94.1 percent and the monthly rental income was about 16.06 million yuan. Since Link REIT completed the acquisition, the occupancy rate has gone up further to 97 percent, he said.
"The mall is positioned in the mid- market segment and it targets young people and young families in Guangzhou," said Fok.
He said Link REIT is looking to improve the mix of food and beverage retailers and will inject more children's elements into the mall.
"The average daily foot traffic at the mall is about 90,000 to 100,000," said Fok, adding "since it is located at the intersection of two metro lines, about 73 percent of the shoppers arrive at the mall by metro."
He said Hong Kong and Guangzhou are very closely connected and there could be synergy between the two cities.
Many Hong Kong retailers want to set up stores at Metropolitan Plaza, he said.