Link Reit, the largest real estate investment trust in Asia, on Tuesday announced the sale of a portfolio of properties that includes 17 Hong Kong shopping centres for HK$23 billion (US$2.94 billion) – the biggest sale of its kind in the city – despite criticism from activist groups that this could lead to a rise in rents. Link Reit said it would sell commercial property totalling 2.2 million square feet to a consortium led by Hong Kong-based private equity fund Gaw Capital Partners, confirming an earlier report by the South China Morning Post . US-based investment bank Goldman Sachs is part of the consortium. Chinese bad-debt firm emerges as second-biggest partner among buyers of Link Reit’s 17 HK malls The shopping centres are located in Kowloon and the New Territories close to subway stations and also includes more than 8,000 car parking spaces. Some of the properties included in the deal are: Cheung Hang in Lions Rise, Kai Yip in Kwai Shing East, Kam Tai in Lai Kok and Lei Chen Uk in Lee On. George Hongchoy, chief executive of Link Asset Management, the manager of Link Reit, said the sale attracted overwhelming interest from international investors. “The competitive bids and final sale price signify a vote of confidence in Hong Kong’s economy and retail sector,” Hongchoy said. The deal, the biggest by the trust since its formation in 2004, immediately triggered criticism from activist groups, who said that the trust, which owns 125 shopping centres in public housing estates across Hong Kong, was using public assets for speculation and profits. This would lead to a surge in shop rents and could damage neighbouring communities, they said. The Link Reit has already sold 28 of its shopping malls in public housing estates for HK$11.96 billion over the past three years. Sophia So Lok-yee, chairwoman of watchdog group Link Watch, said the sale represented a shift in Link Reit’s strategy. She said the 28 shopping centres that Link had sold previously were mostly located in remote areas with few tenants and visitors, as well as little investment from the investment trust to improve the malls. But the current batch included some popular properties such as Kwai Fong Plaza, as well as malls bought from the private market such as the Lions Rise Mall. “These malls are not just commodities,” she said. “There are real people living around them and rely on them, and their interests are being sacrificed.” Goodwin Gaw, chairman of Gaw Capital, said that the malls would continue to serve local communities. “We hope to utilise our experience to evolve these malls into refreshed and renewed centres of local life,” Gaw said. Read: How tycoon Goodwin Gaw revived the fortunes of the iconic Hollywood Roosevelt Last year, Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor, then chief secretary, said the Link was one of three “mountains”, or contentious issues, which the government aimed to tackle. Link, which took over government-owned malls and markets, has been accused of adopting a business practice that pushes up rents and drives small businesses out. Lam said she would discuss possible solutions and these may include a government-led legal battle against Link Reit. The new owner Gaw Capital’s property portfolio includes 133 Wai Yip Street in Hong Kong, a former 12-storey industrial building that has been turned into creative office space. It also owns the Sanlitun Village in Beijing jointly developed with Hong Kong-listed Swire Properties. The winning consortium trumped competing bids by Blackstone, KKR and mainland Chinese investors. Link Asset Management said in July it intended to conduct a strategic review of its property portfolio to maximise its value. It appointed HSBC, UBS and Cushman & Wakefield to assess its strategic options.