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Report: Blackstone in talks to buy over HK$10B Hong Kong malls from Link REIT

Blackstone Group LP is interested in purchasing more than 10 shopping centers from Link Real Estate Investment Trust in an over HK$10 billion deal, the Nikkei Asian Review reported Oct. 10, citing Chinese-language newspaper Ming Pao.

The parties are said to be undergoing discussions for the transaction, which is understood to be part of the portfolio review that was announced by the Hong Kong real estate investment trust Sept. 24. The REIT said in a same-day filing that its manager, Link Asset Management Ltd., had entered into exclusive deals with independent third parties that are exploring non-binding investment opportunities that may involve the potential divestment and/or purchase of assets.

Link REIT declined to comment on the reported negotiations, while Blackstone did not immediately respond to a request for comment, according to a separate Oct. 11 report by The (Hong Kong) Standard.

The latest talks center around properties that are mainly located in public housing estates in Hong Kong, the report added. The over 120,000-square-foot Shan King Commercial Centre in the city's Tuen Mun district is the largest property in the portfolio under consideration, with a valuation of roughly HK$1.39 billion as of March.

Aside from Shan King, other malls that could be on offer are the 85,000-square-foot Lei Tung Commercial Centre in Ap Lei Chau and the 61,000-square-foot Chun Shek Commercial Complex in Sha Tin, which are respectively valued at HK$1.14 billion and HK$770 million.

Earlier in 2018, Link REIT divested 17 malls in the special administrative region to a Gaw Capital Partners-led consortium for HK$23 billion. Following the sale, several watch groups called on the Hong Kong government to buy back the shopping center-focused REIT, citing the role the trust plays in forcing small shops out of business and its general mall mismanagement.