Mapletree Pan Asia Commercial Trust said on Wednesday it is offloading the office tower at Hong Kong’s Festival Walk mall for HK$1.96 billion ($251.89 million), as part of its portfolio optimization amid a sluggish Greater China office market.
The Singapore-listed REIT, backed by Singapore’s state investment firm Temasek Holdings, agreed to sell the Festival Walk Tower to an undisclosed buyer at a price matching its latest independent valuation. The deal, fully settled in cash, is slated to close by February.
Temasek holds about 56.7% stake in the company, according to data from LSEG.
The divestment follows two commercial office exits in Japan in August, amid the real estate manager’s push to streamline the portfolio and shore up balance sheet flexibility.
Proceeds will be used to pare debt, trimming the firm’s leverage to about 36.5% from 37.6%.
Landlords across Greater China face economic uncertainty and softening office demand, with Hong Kong particularly strained by prolonged volatility and shifting corporate footprints, prompting owners to reconsider capital allocation.
The REIT will retain full ownership of Festival Walk’s retail mall, which is almost fully occupied and valued at HK$21.78 billion.
MPACT’s portfolio will shrink to 15 commercial assets across Singapore, Hong Kong, China, Japan and South Korea after the sale. Singapore remains its anchor market, contributing nearly two-thirds of net property income.
($1 = 7.7813 Hong Kong dollars)
Reuters
