Singapore investor first to bear the brunt of Hong Kong’s radical protests as vandals laid waste to Festival Walk mall in Kowloon

Extensive damage to Festival Walk in Kowloon adds to casualties including a WeWork venture and vandalism at bank branches

Temasek has about 10 per cent of its S$313 billion of assets denominated in Hong Kong dollar, third-largest by currency exposure

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A Christmas tree burns after protesters set fire to it at Festival Walk shopping centre in Kowloon Tong, Hong Kong, on November 13, 2019. Photo: EPA-EFE

Published: 8:00am, 19 Nov 2019Updated: 10:06am, 20 Nov 2019

When anti-government protesters rampaged through the Festival Walk in Kowloon on November 12, they smashed glass panels and some of the 200-odd stores in the sprawling mall. They also inadvertently dented one of Singapore’s biggest investments in the region.

Acquired by Temasek Holdings’ wholly owned Mapletree Investments unit in 2011 for HK$18.8 billion, the retail and office property is now part of the assets in Mapletree North Asia Commercial Trust after a reorganisation in 2013. The real estate investment trust tumbled to a 10-month low in Singapore after the news.

The “extensive damage” reflects how the situation has taken a turn for the worst as violence escalates after more than five months of anti-government protests, deepening the slump in retail sales and crashing property values. It is also turning Hong Kong into an investment landmine for investors as the Kowloon district became the latest fiery battleground.

“What is happening in Hong Kong at the moment is that we haven’t seen the end of the tunnel yet,” said Louis Tse Ming-kwong, managing director of VC Asset Management in Hong Kong. “We now, inter alia, have to take the state of the local economy into our consideration and that it’s a bit of a challenge. Investors have too many variables at play to evaluate now to get a satisfactory return, not just for us but for others like Temasek.”

Like other global money managers, Temasek has raised its stake in the region in recent years to latch on to China’s economic boom. About 10 per cent of Temasek’s S$313 billion of assets is denominated in the local dollar, the third largest by currency exposure, according to its 2019 annual review.