Fortune Real Estate Investment Trust (Reit), Li Ka-shing's Singapore-listed property fund, will sell 318.79 million shares at $6.23 each to raise $1.98 billion in its first fund-raising exercise since listing in August 2003. The new shares will be placed at a discount of 4.93 per cent to the volume-weighted average of $6.5528 of all shares traded on Tuesday. The proceeds will be used to finance the acquisition, announced in March, of six retail properties in Hong Kong for $3.4 billion, which will almost double the value of Fortune Reit's portfolio. The properties are all wholly or partly owned by Cheung Kong (Holdings). Fortune yesterday said the deal would enhance its asset value to $7.8 billion from $4.2 billion, adding that the property values were about $200 million more than their purchase price. When the deal was completed, annualised yield would improve to 5.35 per cent from 5.03 per cent, it said. DBS Bank, HSBC, JP Morgan and UBS are the joint bookrunners and underwriters of the placement, which will close on Tuesday. Fortune also plans to acquire Hong Kong retail properties that are not yet in Cheung Kong's portfolio and has already been in talks over possible sites. But no deals have been signed so far. 'We would be interested in properties with an annualised yield of more that 5 per cent,' said Yung Yu-ming, a fund manager with Ara Asset Management (Singapore), which manages Fortune. 'Our acquisitions don't necessarily come from Cheung Kong. What we are looking for are assets with the right price and the right yield.' Fortune now owns five shopping centres in Hong Kong, all bought from Cheung Kong, which has a 27 per cent stake in the fund. Mr Li's conglomerate flagship, Hutchison Whampoa, has a 13 per cent stake in the fund while Singapore's DBS Group Holdings owns 9.9 per cent. Mr Yung said Cheung Kong had confirmed that it would subscribe to the new shares to maintain its shareholding level while Hutchison had yet to declare its intentions. Hutchison's stake in Fortune would be diluted by half if it did not subscribe to the offer, he said. Hong Kong's retail property sector is booming after 21 consecutive months of retail sales growth fuelled by swelling mainland tourism numbers. Some developers are keen to sell off their retail property holdings, which are commanding record high prices. 'We have been looking to dispose of some of our non-core investment properties when the prices are right,' said a spokesperson for Wheelock, the largest retail landlord in Tsim Sha Tsui. Analysts said Wheelock might look to sell its 562,000 square foot Plaza Hollywood shopping centre in Diamond Hill and the 125,343 sq ft Fitfort mall in North Point. Hysan Development, the biggest landlord operating in Causeway Bay, said it had no plans to sell any of its property assets for the time being.