The beckoning call of Hong Kong's lucrative real estate markets prompted government officials to cobble together Asia's single largest real estate investment trust, The Wall Street Journal reports.
The pending launch of Hong Kong's REIT, which is comprised largely of state-controlled shopping, has been valued at $2.8 billion to $4.5 billion and is capturing the attention of Western investors hungry for exposure in prime real estate one of Asia's financial capitals.
Properties in the REIT, Hong Kong's first publicly traded security, will be managed by CapitaLand Ltd, a real estate specialist headquartered in Singapore, and are expected to a 6.8% yield next year. CapitaLand owns a $180 million stake in the deal, which is scheduled to launch next month.
Western investors view the project as a new opportunity to purchase diversified real estate holdings in Asian financial capitals outside of Japan, South Korea and Singapore, which has been slow to organize REITs. Hong Kong is on an upswing after a lengthy economic period marked by deflation.