Chinachem to set up two property trusts
Chinachem Group plans to set up two real estate investment trusts consisting of offices, retail shops and car parks despite waning appetites for such investments.
Sales manager Ng Shung-mo said yesterday that one of the planned reits would group together the company's retail properties.
Chinachem, controlled by Hong Kong's richest woman, Nina Wang, has appointed an investment bank to arrange for the launch by the end of this year.
Mr Ng declined to disclose the investment bank.
The retail portfolio includes retail and parking spaces at Hilton Plaza in Sha Tin, Sheung Shui Town Centre, Fanling Town, Ho Shun Fuk in Yuen Long, Hong Lai Garden in Tuen Mun and retail shops in Sha Tin and Sai Kung.
Mr Ng said rental income from the retail properties was about $30 million a month, with an annual growth of 4 per cent to 5 per cent. Fanling Town generates the biggest rental income that ranges from $100 to $300 per square foot.
The other planned reit will include Chinachem's office portfolio, but the company has not appointed a bookrunner for the deal.
UBS Investment research director Eric Wong cited difficulties in luring investors into property trusts: 'The interest rate of Hong Kong is higher than other cities in Asia [while] the rental yield of Hong Kong property is lower than in Singapore and the mainland.'
